Bovis and Persimmon hit autumn numbers

Housebuilders Bovis Homes and Persimmon have reported positive trading in line with expectations, despite concerns that the Eurozone crisis may have impacted on buyers’ confidence.

In its interim management statement to the city Persimmon said that since its half year figures in July, site visitors have been 35% higher than the same period last year. Weekly sales since September are running at 19% higher than for the same period last year.

However, the company admitted it was selling cheaper homes in order to get buyers to purchase, because of “an expected increase in legal completions associated with the pick-up in first time buyer activity that we have recently experienced.” Therefore it now expects that its average selling price to be slightly below the £169k recorded last year, with 9,300 legal completions.

It said it will nonetheless increase it profit margins over the year, in part by squeezing build costs and introducing house designs that are cheaper to build. It’s statement said its strategy of “introducing house designs that increase the efficiency of our build, exercising tight control over build costs and using new replacement land at lower cost is continuing to result in improved profitability.”

Meanwhile rival builder Bovis said private reservations in the 44 weeks to November 4 were up 22% to 1,480, due to an increase in the number of sales outlets, and a 10% increase in the number of net reservations per site week.

In the ten weeks since its half year results, it said it has sold 393 homes, up 29% on the same period last year, with a similar spike in visitor numbers experienced by Persimmon. The firm said it had opened 29 sites in the year and will open four more before Christmas, leaving it with 80 sales outlets by the end of the year.

Bovis said it was confident it will achieve sales of between 5-10% above those achieved in 2010, and that the outlook was more positive in the south of England. It said: “Sales prices achieved to date reflect the general stability of the housing market with small differentials experienced in different locations, prices being generally stronger in the south of England.”

It added it expects to achieve an operating margin of close to 10%.