Trading Statement

Bovis Homes Group PLC Bovis Homes Group PLC Trading update 14 July 2005 Bovis Homes Group PLC is pleased to be able to issue a trading update ahead of its interim results for the six months ended 30 June 2005 which will be announced on 12 September 2005. As previously announced, the 2005 interim results will be the first results reported under International Financial Reporting Standards ('IFRS'). The UK housing market has remained steady during the second quarter of 2005 after a weak fourth quarter of 2004 and a quiet start to 2005. Consumers are showing caution, contributing to property transactions in England and Wales in the first quarter of 2005 being 24% lower than the corresponding period in 2004. In the Group's Annual General Meeting statement issued on 11 May 2005, the Group reported that due to the slowing of the second hand housing market, legal completions for the first half of 2005 would be lower than the comparable period in 2004. The Group legally completed 1,089 homes in the first half of 2005 compared with 1,302 legal completions in the first half of 2004, of which 246 were social legal completions (22.6% of total legal completions) compared with 138 social legal completions in the first half of 2004 (10.6% of total legal completions). The average sales price achieved during the first six months was £179,800 (average size: 1,060 square feet) compared with £201,100 in the corresponding period in 2004 (average size: 1,167 square feet). Average sales price per square foot decreased, year on year, by 1.6%. For private development units, the average sales price per square foot increased, year on year, by 3.3%. The Group's gross margins for the first half of 2005 were approximately 33% compared with 2004's half year gross margin of 34.7% (restated for IFRS). The Group achieved, in the first half of 2005, land sale profits, net of option write downs, of £8.8 million. Administrative expenses for the six months ended 30 June 2005 are expected to be broadly in line with the same period in 2004. The Group believes that the full year impact of IFRS on the 2005 results will be limited. However, due to the timing of a number of transactions requiring adjustment under IFRS, the impact on the 2005 interim results is more marked, reducing pre tax profits by in excess of £1 million. The corresponding impact on the 2004 interim results was less material. Net borrowings at 30 June 2005 were in line with the Group's internal expectations and gearing stood at about 10%. The Group ended the half year to 30 June 2005 with approximately 12,000 plots in its consented land bank. The Group has remained cautious in respect of purchasing land with outline planning consent as land prices remain high. The Group has continued to focus on conversion of strategic land. During the first half of 2005, the Group secured planning consent on an estimated 1,300 plots at Brockworth Airfield, near Gloucester, at a significant discount to market value. Against the backdrop of a challenging housing market, Bovis Homes ended the half year to 30 June 2005 with a cumulative reservations total of 2,038 homes (excluding forward sales for 2006), a 3% reduction compared to the corresponding period in 2004. Social housing has grown as part of the Group's business with 639 social housing reservations achieved in the first half of 2005 compared with 295 social housing reservations in the comparable period of 2004. Looking forward to the second half of 2005, there remains considerable uncertainty over the robustness of the UK housing market. There has been no discernable improvement in transaction activity in the housing market since the General Election. Whilst the Group still aims to achieve around 3,150 legal completions for the full year, and is well placed in terms of production activity to construct the homes required, the current short term trading conditions are likely to impact the Group's target for over 1,100 further home reservations, for 2005 legal completion, in the second half of the year. Unless there is a notable increase in reservation levels during the period August to October, it is unlikely that the Group will achieve the planned level of volume expansion this year. The Group will benefit from a larger availability in the second half of 2005 of smaller, more affordable properties which are more readily saleable in the quieter housing market in which the Group expects to operate. Whilst this will support the Group's aims in terms of volumes, the Group anticipates that the average sales price for the full year 2005 will be lower than in 2004. This is largely due to the average size of unit which, dependent on mix, may fall by circa 10% year on year. Based on the Group's current expectations the overall gross margin for the full year 2005 is likely to fall by circa 2% compared to 2004. The Group believes that the medium to long term prospects are good, founded upon the Group's strategic land bank and ability to deliver needs-driven homes into a supply constrained housing market. The conversion of a number of large strategic sites will provide the Group with the opportunity to expand its regional structure and facilitate the planned expansion. Based on the good progress being made, the Group has launched two new regions with effect from 1 July 2005. These new regions, Wessex and South Midlands, currently have only a limited number of staff and much of the service provision required is delivered from existing staff, systems and assets in the more established South West and Central regions. New housing represents a credible choice for house purchasers with low maintenance, well specified properties; however, it is a challenge for housebuilders to sell into a marketplace where purchasers are lacking in confidence. Bovis Homes, in common with other housebuilders, faces that challenge and the second half of 2005 is likely to be a difficult trading period. The Board remains content with the previously advised statement in respect of future dividends. It intends, conditional on any necessary approvals required at future general meetings, to increase the full year dividend over the next four years by 5.0 pence per annum. This commitment, which is subject to a stable business environment, will double the full year dividend over the four year period to 40.0 pence per share from its 2004 base of 20.0 pence. Enquiries: Malcolm Harris, Chief Executive Emily Bruning Bovis Homes Group PLC Shared Value Limited Tel: 01474 876200 Tel: 020 7321 5027 A conference call for analysts and investors, hosted by Malcolm Harris, Chief Executive, will be held at 8.00am on Thursday 14th July 2005. To participate in this conference call please dial: +44 (0)20 7365 1844. A replay of the call will be available for 7 days following the call. To access the replay please dial: +44 (0)20 7784 1024 and passcode: 1469116#.

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