HOUSEBUILDER Bovis Homes said annual profits were set to beat forecasts after sales and selling prices rose in 2010.
The group reported a 4% rise in average selling prices to £160,700 over last year as sales completions rose by 5%.
It now expects full-year profits to exceed City predictions of £16.3m – and will resume paying shareholder dividends for the first time in two-and-a-half years.
Bovis is the second builder to deliver profits cheer this week after Charles Church owner Persimmon upped its profit guidance as the sector benefited from a shift in sales towards houses and better margins on land bought at cheap prices.
But Bovis said conditions in 2011 would remain “subdued” amid spending cuts and mortgage lending constraints.
Bovis said the 2010 selling price hike was driven by private sales, which logged 1,592 completions against 309 for social homes.
The group has a forward order book of 420 homes for 2011, which it said had held firm against underlying orders seen at the start of 2010.
But it said: “The group continues to expect trading conditions in 2011 to be subdued relative to historical levels, with ongoing economic uncertainty.
“Mortgage approval volumes remain weak, with mortgage providers requiring high levels of deposit, particularly from first time buyers.”
“This all said, the long term imbalance between the demand and supply of housing remains positive for the housebuilding sector.”
Bovis will pay a dividend for 2010 in May – its first since the financial crisis struck in 2008.
Last year was a resurgent one for Bovis after it returned to profit with a £3.5m surplus for the six months to June 30.
It is confident of further growth as it snaps up land at attractive prices, having bought about 3,700 plots in 2010 and agreed terms on a further 2,500 plots.
