Preliminary Results - Part 1

Bovis Homes Group PLC
12 March 2001


Part 1 
                        BOVIS HOMES GROUP PLC
                          PRELIMINARY RESULTS
                  FOR THE YEAR ENDED 31 DECEMBER 2000
                         Issued 12 March 2001

  The Board of Bovis Homes Group PLC today announced its preliminary
                           results for 2000.
                                   
*  Pre tax profit increased by 21% to £67.1 million (1999: £55.4
   million)
   
*  Earnings per share increased by 23% to 42.0p (1999: 34.2p)
   
*  Operating margin increased to 23.2% (1999: 20.5%)
   
*  Return on average capital employed increased to 23.2% (1999: 23.1%)
   
*  Plots with planning consent at 10,133 plots (4.3 years' supply on
   2000 completions)
   
*  Strategic land holdings of 18,016 potential plots (1999: 17,003
   potential plots)
   
*  Final dividend of 7.8p net per ordinary share making 11.7p for the
   year, an increase of 8.3% (3.6 times covered)
   
*  Year end net borrowings of £61.0 million (21% gearing)
   

Commenting on the results, Malcolm Harris, the Chief Executive of Bovis
Homes Group PLC said: 

'The Group continued to enhance shareholder value by delivering
improvements in profits, operating margins and return on capital
employed.

We enter the current year in a strong position with excellent land
holdings, products and improved processes.  Housing profit margins are
running ahead of budget and cumulative sales reservations are above
the comparative period last year.  To effectively manage costs during
the exceptional weather conditions experienced over the winter period,
building works on a number of sites have been delayed.  This may
result in the split of profits between the first and second half years
being more weighted towards the latter six months.  However, based on
the current economic outlook the Board is confident of another
successful year.'

Enquiries: Malcolm Harris, Chief Executive
           Bovis Homes Group PLC
           Tel: [phone]
           on Monday 12 March
           Tel: [phone]
           Thereafter
         
Results    Andrew Best / Emily Bruning
issued     Shared Value Limited
by:        Tel: [phone]
           on Monday 12 March
           Tel: [phone]
           thereafter


Chairman's Statement

The Group had another very successful year, with basic earnings per
share increasing by 23% in 2000 to 42.0 pence.

The strong start to the year was followed by a more constrained market
over the summer period with improved activity in the autumn.  Over the
year as a whole the operating margin was increased to 23.2% of turnover
and the return of operating profit on capital employed also amounted to
23.2%.

Results

Profit on ordinary activities before taxation for the year ended 31
December 2000 rose by 21% to £67.1 million, compared with £55.4 million
in 1999.  This result was achieved from total turnover of £305.0
million, which was approximately 10% higher than the previous year
notwithstanding slightly lower unit volume.  The average size of unit
completed in the year was greater than in 1999 and this together with
improved specification and new product types raised the average sales
price from £109,400 to £123,300.

Dividend

The Board proposes a final dividend for the year ended 31 December 2000
of 7.8 pence to be paid on 25 May 2001 to shareholders on the register
at the close of business on 27 April 2001.  This dividend when added to
the interim dividend of 3.9 pence paid on 24 November 2000 totals 11.7
pence for the year and is covered 3.6 times by the basic earnings per
share of 42.0 pence.  The total dividend per share for the year
represents an increase of 8.3% over the total dividend for 1999.

Market conditions

Mortgage rate rises between September 1999 and February 2000 together
with the abolition of mortgage interest tax relief and increases in
rates of stamp duty in April were assimilated into the market place and
had a negative impact on demand during the summer months.  This
contributed to slowing the annual rate of growth in house prices to a
level more in line with earnings growth.  In January 2001 the Halifax
reported that the annual house price growth had declined to 3.1% at
December 2000.  The Group's trading activities demonstrated a return to
normal seasonal market conditions in the last quarter of the year.

Strategy

In order to maximise total shareholder return the Group has continued
to vigorously apply its key strategies with due recognition of an
appropriate level of risk.  It is relevant to restate these strategies
which are:

*  a consistent land investment and holding policy relating to short,
   medium and long term supply;
   
*  a continuous evaluation of all products and processes to ensure the
   highest levels of efficiency and profitability;
   
*  the minimisation of risk by ensuring wide spread of product range
   and geographic coverage;
   
*  the maintenance of a highly effective and competitive management and
   overhead structure;
   
*  the maintenance of clear progressive policies on health, safety and
   environmental matters including training.
   


Industry consolidation

In recent months the house-building sector has seen some consolidation
as a result of merger and acquisition activity.  It has been suggested
that such action may increase the advantages of bulk purchasing of
materials and larger sites.  Your Board has reviewed these activities
and believes that Bovis Homes already has the capabilities to secure
such benefits.  The Group continues to be successful in its land
acquisition strategy and buys materials at keen prices using bulk
purchasing and partnering to mutual benefit.  It has a continuous
improvement programme and is developing new ideas to improve its
production methods.  The Board will continue to monitor the sector and
assess whether we can gain advantage from acquisitions in the future.

The Board

The composition of the Board and the individual responsibility of Board
members did not change during the year and comprised seven executive
directors led by the Chief Executive, Malcolm Harris, and three
independent non-executive directors including myself as Chairman.  By
agreement with the Company JE Ditheridge is to retire from office on 31
March 2001.  On behalf of the Board I would like to express my thanks
to Jim Ditheridge for his long service with the Group and his
contribution to the Board.

Authority to purchase shares

It is proposed to renew the authority of the Company to purchase up to
10% of its own shares at the forthcoming AGM.  At the present time, the
directors have no wish to exercise the authority to purchase any of the
shares of the Company but consider that it is appropriate to have the
flexibility to do so.

Employees

These results could not have been achieved without a great deal of hard
work and effort from our employees, for which the Board expresses
thanks.  Such dedication provides great confidence for the future.

Prospects

According to recent economic comment, the UK economy is forecast to
slow over the course of 2001, with many forecasting GDP circa 2.5% as
against 3.0% assessed for 2000.  On this basis there are real prospects
for further reductions in interest rates and ongoing underlying
inflation below the Government's target of 2.5%.  With earnings growth
projected at rates over 4.0%, affordability in the housing market is
forecast to remain positive.

Given the Group's trading experience to date and assuming there are no
significant fluctuations from the above economic scenario or other
unforeseen circumstances the Board is confident of another successful
year.


Nigel Mobbs
Chairman

Chief Executive's operational review

Trading environment

The new millennium started well with high levels of employment and
underlying inflation below the Government's target of 2.5% which
continued throughout 2000.  Actions taken by the Bank of England's
Monetary Policy Committee up to February 2000 assisted economic
stability and despite the interest rate increases the standard mortgage
rate level was still low compared with the last twenty five years.  The
Chancellor's budget in March 2000 affected affordability through
withdrawal of tax relief on mortgages and added further tax burdens in
the form of stamp duty increases which had a marked constraining effect
on sales through the summer months.  Despite the budget changes,
affordability remained positive due to increases in average earnings
during the year of approximately 4.3% and a very competitive mortgage
market.  The strong economic base assisted house sales to return to a
more normal seasonal pattern in the autumn.  The average house price
increase for the year was reported at 3.1% by the Halifax with new
house prices increasing by 6.4%.  There were, however, significant
regional variations in price levels.  The overall number of property
transactions recorded in the year fell by 2.5%.

Performance

Operating in a constrained market, Bovis Homes achieved all of its key
objectives with particular emphasis upon investment to provide long
term shareholder value.  The Group's focus upon product development and
process efficiency continues to deliver excellent returns.  New designs
introduced during the year have been well received and will provide a
strong platform to expand the business.

The Group's average sales price increased to £123,300, a 12.7% increase
compared with 1999.  Sales price per square foot, net of incentives,
increased by 11.4%.  Building costs per square foot increased by 7.7%
including specification upgrades.  The Group's operating margin
improved to 23.2% from 20.5% in 1999 reflecting the combined benefits
of new products, specification upgrades and process improvements.

Regional performances

Operating margins

Year ended 31 December                                 2000        1999
                                                          %           %
                                                   --------    --------
South East                                             26.4        23.1
South West                                             18.1        15.1
Central                                                22.7        20.1
Retirement Homes                                       25.8        23.1
                                                   --------    --------
Group                                                  23.2        20.5
                                                   --------    --------


All regions in the business significantly increased their operating
margins which are substantially above the average for the industry.

The Group continued to pursue opportunities to trade its commercial
land holdings during 2000 and successfully completed sales of its
Swindon commercial land in South West region and Cambourne commercial
land in Central region.

Unit completions and average sales price

Year ended 31 December                         2000                1999
                                   Units    Average    Units    Average
                                              sales               sales
                                              price               price
                                                  £                   £
South East                           931    124,600    1,062    110,900
South West                           645    103,800      604     95,500
Central                              650    135,200      641    114,700
Retirement Homes                     134    150,200      122    137,900
                                  ------    -------  -------    -------
Group                              2,360    123,300    2,429    109,400
                                  ------    -------  -------    -------


The Central region result included 120 unit completions in the Northern
area, which contributed £3.2 million of gross profit.

Sector performances

Product mix and average sales price

Year ended 31 December                         2000                1999
                                   Units    Average    Units    Average
                                              sales               sales
                                              price               price
House type                                        £                   £
Two bedroom                          416     84,700      446     71,700
Three bedroom                        592    105,600      660     92,600
Four bedroom                         890    152,200      912    134,900
Five or more bedroom                  98    249,600       94    234,600
Social Housing                       230     57,600      195     55,100
Retirement Homes                     134    150,200      122    137,900
                                   -----    -------  -------    -------
Group                              2,360    123,300    2,429    109,400
                                   -----    -------  -------    -------


The new range of three storey town houses and room in the roof homes
contributed approximately 4% of the legal completions during the year
with a minimum of 15% forecast for 2001.

Construction

The weather conditions endured, particularly in the second half of the
year, were appalling (with the wettest autumn since 1872 recorded) and
only an excellent performance from our site based employees limited the
adverse effect on the build programme.  Although overall house
production was in line with expectations, build completion dates were
delayed leading to later legal completions and a correspondingly higher
than anticipated level of trade-in property stock at the end of
December.  The re-sale of trade-in stock has been very strong since the
year end with no loss on book value and stocks returning to a more
normal level.

Research and development

Throughout 2000 Bovis Homes operated its continuous improvement
programme trialling and installing a number of new materials and
methods capitalising on pre-fabrication, pre-finishing and latest
available technology, working with many external bodies including the
National House Building Council, Building Research Establishment, House
Builders Federation, Construction Industry Training Board and many
trade suppliers.

The Group continued to undertake the research and development of the
application of autoclaved aerated concrete (aac) in the UK, including
the potential of reinforced units.  Working closely with the
Construction Industry Training Board, preliminary trials commenced in
2000 with the development of the concept of multi-skilled house
building teams with the object of alleviating the severe skills
shortage and recruitment issues facing the industry.

Work is ongoing with leading plant and equipment manufacturers to
further advance mechanical handling techniques on site in line with the
increased use of pre-assembled, pre-finished components.

We continue to work on partnering arrangements with our suppliers and
last year provided finance and technical assistance to assist with
their own research and development.

Land and planning

Severe delays are being experienced in obtaining planning consent
pursuant to the publication of the Government's new planning guideline,
PPG3.  Despite these impositions and intense competition for prime
sites, the Group has managed to maintain its land holdings with consent
at 10,133 plots as at 31 December 2000 which represents approximately
4.3 years' supply based upon 2000 legal completion levels.  The Group's
strategy to invest in prime locations with a wider geographic spread
has been met during the year and a large number of planning
applications are pending resolution which should further strengthen our
consented land bank during 2001.  The average plot cost of land as at
31 December 2000 was £28,500 which
represented 21.9% of the average sales price in the year of £130,400,
excluding social housing.  The plots held with consent at 31 December
2000 are anticipated to generate a higher average sales price as new
products are developed.

With regard to the strategic land, a number of large developments are
at an advanced stage of planning being allocated in Approved Plans or
brownfield sites which should achieve consent
under the Government's new guideline.  The aforementioned planning
delays limited the number of plots transferred from strategic to
consented land bank during the year to 581 plots at a 16% discount to
market value.  As these delays are overcome, we anticipate a
substantial increase in the transfer of plots from strategic land to
consented land in 2001.  Of the closing
consented land bank 45% of the plots held were promoted through the
Group's strategic holdings.  Unit completions originating from
strategic land contributed 49% (1999: 46%) of the Group's development
profit in the year.

31% (1999: 32%) of the unit completions in the year were built on
previously used land.

Consented land bank

Total plots as at 31 December                          2000        1999
                                                      Plots       Plots
                                                    -------     -------
South East                                            3,385       3,252
South West                                            2,083       2,211
Central                                               4,294       4,419
Retirement Homes                                        371         453
                                                    -------     -------
Group                                                10,133      10,335
                                                    -------     -------
Years' supply based upon completions in the             4.3         4.3
year
                                                    -------     -------
     

Strategic land bank

Total potential plots as at 31 December                2000        1999
                                                      Plots       Plots
                                                    -------     -------
South East                                           10,446      10,248
South West                                            4,000       3,657
Central                                               3,495       3,032
Retirement Homes                                         75          66
                                                    -------     -------
Group                                                18,016      17,003
                                                    -------     -------

Total potential plots in 'growth locations' as         2000        1999
at 31 December                                        Plots       Plots
South East                                            5,439       6,440
South West                                            2,014       1,722
Central                                               1,128         999
Retirement Homes                                         75          66
                                                    -------      ------
Group                                                 8,656       9,227
                                                    -------      ------


Pursuant to the publication of PPG3 and recent decisions by a number of
planning authorities, it is probable that a number of sites either
owned or under option may no longer be released within the current plan
period.  One large holding in Hampshire has been part allocated in the
current plan with the balance shown as potential development post 2011.
The Group's potential plots in 'growth locations' reflect the changed
planning position.  Within our strategic holdings there are a number of
investments which are redevelopment sites not allocated for
residential consent in the current plan which we believe will receive
consent in the short to medium term.



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