Housebuilder warns of a 16% drop in sales for first half of 2005.
Housebuilder Bovis Homes Group says that expects pre-tax profits to drop by more than £1m for the first six months of 2005. It blames the "considerable uncertainty over the robustness of the UK housing market," for the fall.
It says that gross margins for the same period are likely to be 33%, almost 2% lower than for the corresponding period last year. The group completed sales on 1,089 homes in the six months to June 30 this year, down from 1,302 in the first half of 2004 (a drop of 16%). The average sale price fell to £179,000 from £201,000.
The 2005 interim results, which will be announced on September 12, will be the group’s first results to be reported under IFRS. Bovis says that while the impact of this change to be limited for the end of year results, it is another factor which has led to the drop in pre-tax profits for the first half of the year.
Bovis said in a statement that "there has been no discernable improvement in transaction activity in the housing market since the general election.”
It admitted that current trading conditions were likely to affect its planned level of volume expansion this year. It expects its overall gross margin to fall by around 2% for the year.
