Interim Management Statement

Interim Management Statement

Bovis Homes Group PLC

Bovis Homes Group PLC

Interim Management Statement

8 November 2010

Bovis Homes Group PLC is today issuing its 2010 Interim Management Statement for the period from 1 July 2010 in accordance with the UK Listing Authority’s Disclosure and Transparency Rules. In addition, the Group is hosting a presentation for investors and analysts between 4:00pm and 6:30pm today at RBS Hoare Govett’s offices at Bishopsgate, London. Presentation slides will be available immediately following the presentation on the Group’s web site www.bovishomesgroup.co.uk.

The Group has maintained a solid sales rate against the backdrop of a market which continues to be challenging, particularly with regard to the low availability of high loan to value mortgage finance. To 5 November, the Group has achieved 1,900 home sales which are anticipated to legally complete during 2010, split c1,600 private homes and c300 social homes. The Group currently has over 250 forward sales for legal completion during 2011, a total which will grow through the remaining eight weeks of 2010. Based on the Group’s average number of active sales outlets of 66 for 2010 to date, the Group has achieved an average sales rate per outlet per week of 0.42 homes as compared to 0.37 sales per outlet per week in the same period of 2009, representing an improvement of 14%.

The Group has succeeded in achieving sales prices above its internal target levels during 2010. The Group expects the average sales price of legal completions in 2010 will be approximately £160,000, some 3% ahead of 2009’s average sales price of £154,600. This, when combined with the initial benefits of construction cost savings, has generated improvement in both gross profit margin and operating profit margin. As previously guided, the Group anticipates that its 2010 operating margin will exceed the previous year’s level of 6.2%.

The Group has made significant progress with its stated near term strategy of acquiring land with residential planning consent, after a period of significant residential land price falls; the Department for Communities and Local Government indicating that residential land with planning consent in England has now stabilised at a value some 40% below its peak in late 2007. These land acquisitions provide the Group with the opportunity for strong financial returns through their development based on current market conditions.

Having announced the addition to its consented land bank of 1,874 plots in the first half of 2010, the Group has acquired a further 1,381 consented plots, of which 92% are located in the south of England, in the second half of the year to date. In total, the Group has now added 3,255 consented plots during 2010 at a cost of £182 million. The land additions to date are anticipated to generate returns in line with the Group’s investment hurdle rates, with revenue of £628 million and gross profit of £158 million during their development period, based on current prices and costs. In addition, the Group has agreed terms to acquire a further c2,500 plots with many now at an advanced stage in the acquisition process.

The Group continues to hold a net cash position, with £14 million of net cash at the end of October, after land cash payments in 2010 to date of c£106 million. The Group anticipates generating net cash inflows during the balance of 2010 based on the remaining trading activity in the year. Total land cash payments for the 2010 year are expected to be c£147 million.

Assisted by the level of land investment achieved to date, the Group anticipates that its average number of sales outlets during 2011 will be 76, representing an increase of 15% over 2010, which will, subject to current market conditions continuing, provide the Group with the opportunity to grow volumes in 2011 compared to 2010, notwithstanding that the 2011 opening sales position will be less strong than in 2010.

Looking ahead, it is expected that market conditions will remain challenging over the coming months. However, the Group is confident, based on these market conditions, that with an increase in active sales outlets it can increase its output capacity and sell a greater number of new homes in 2011. Whilst there remains uncertainty concerning the near term direction of house prices, the fundamental demand and supply drivers of the housing market remain positive which should support volume and prices in the medium term. The strategy executed by the Group this year has prepared it well to take advantage of such an environment with a strong balance sheet and enhanced consented land bank delivering an increased number of sites on which to trade.

Conference Call for Analysts and Investors

David Ritchie, Chief Executive and Jonathan Hill, Group Finance Director of Bovis Homes will host a conference call at 09:00am today, Monday 8 November 2010, to discuss the interim management statement.

To access the call please dial 0207 138 0821 and quote passcode: 4113547#. Please dial in 5 minutes prior to the start of the conference call to allow time for registration. A recording of the conference call will be available until midnight on 15 November 2010 on 0207 111 1244, accessible with the same passcode.

Certain statements may be forward looking statements. Forward looking statements involve evaluating a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends, results or activities should not be taken as a representation that such trends, results or activities will continue in the future. Undue reliance should not be placed on forward looking statements.

Enquiries:

David Ritchie, Chief Executive	Â	Andrew Best / Peter Edsinger
Jonathan Hill, Group Finance Director		Shared Value Limited
Bovis Homes Group PLC		Tel: [phone]
Tel: [phone]