Bovis Homes To Declare A Dividend For 2010, Legal Completions +5% To 1,901

Bovis Homes Group PLC (BVS.LN), a U.K. home builder announced Friday for the year ended December 31, 2010, that due success with its growth strategy and confidence in its further delivery, the Group will declare a dividend for 2010.

MAIN FACTS:

-In line with management expectations, the Group legally completed 1,901 homes in 2010 (2009: 1,803 homes), an increase of 5%.

-The Group's average sales price in 2010 was GBP160 700, 4% higher than the equivalent of GBP154,600 in 2009.

-This increase was driven by growth in the Group's average private sales price in 2010 to GBP172,400 from GBP165,500 in 2009.

-Improved sales prices during the year combined with the benefit of build cost savings primarily on second half legal completions have increased the gross margin.

-With overheads in line with expectations, the Group expects the operating profit margin for 2010 to be at least 7%.

-Given the Group's strong performance, it is anticipated that the profit for 2010 will be ahead of consensus expectations as at the date of this trading update.

-At January 1, 2011, the Group held a forward sales order book for 2011 delivery of 420 homes.

-The forward sales position at the start of 2010 was 643 homes, including a non recurring sale of 215 homes sold to a joint venture in which the Group holds a 50% stake.

-The Group has achieved its target of substantially matching production with legal completion volumes in 2010.

-As at December 31, 2010, the Group held housing work in progress equivalent to 1,093 homes (2009: 986 homes).

-This will facilitate the early legal completion of homes reserved in the first half of 2011 and will support the overall growth aspirations of the Group for the year.

-The cash position of the Group as at December 31, 2010 remained strong, with net cash of GBP52 million, having started 2010 with GBP113 million of net cash.

-The overall cash outflow was contributed to by payments during the year of GBP138 million relating to land investment, with strong operating cash inflows pre-land expenditure of GBP93 million.

-The Group has outlined its growth strategy to acquire good quality residential land which will provide an increase in sales outlets to support volume growth, and based on current market conditions will deliver growth in profits and improved financial returns.

-The Group has been successful in 2010 in acquiring consented land, adding 3,700 plots to the land bank at a cost of GBP203 million and with a gross profit potential of GBP181 million.

-Furthermore, the Group has terms agreed for the acquisition of an additional c.2,500 plots.

-The Group continues to expect trading conditions in 2011 to be subdued relative to historical levels, with ongoing economic uncertainty.

-Mortgage approval volumes remain weak, with mortgage providers requiring high levels of deposit, particularly from first time buyers.

-The Group is confident of its ability to deliver on its growth strategy, which will add significantly to future shareholder value.

-Shares closed Thursday at 425.50 pence

-By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; [e-mail]