Financial Trading Blog
Stock of the day 05/07/2016 – Bovis Homes Group PLC
Although it has been at the mercy of the markets, flitting between £8.30 and £10.30 all the way up until the announcement of the Brexit referendum results, Bovis Homes has spent the year releasing a steady stream of solid updates.
(Source: IT-Finance.com 05/07/2016)
The first came in January, with the company revealing it had seen an 8% rise in homes built across 12 months, with a 10% rise in private reservations and a 7% increase in average selling price to £231,000. The good news kept on coming in February, Bovis Homes posting a huge 14% jump in its annual dividend to 40p following a 20% surge in pre-tax profit to £160 million off a 17% rise in revenue to £946.5 million.
In May the company’s statement was slightly different, Bovis Homes forced to address the pre-Brexit jitters that had begun to arise. Yet the company posted a confident update, dismissing claims that house-buyers had been put off in the run-up to the referendum, instead stating that the then-impending vote ‘had no discernible impact’ on business and that it had seen ‘strong demand across all [its] operating areas’.
It will be interesting to see if Bovis Homes strikes the same tone this Thursday. In terms of its update the company is expected to have completed 1600 units in the last 6 months, an improvement on the 1525 seen at this time last year. Yet the focus may be elsewhere. With Britain opting to leave the EU the stock plunged from £10.23 to £5.69 and then back to a closing price of £7.77 in the space of a day; it sits at a current trading price of £6.69 (IT-Finance.com, 05/07/2016). How investors react to Thursday’s statement, then, will likely be more down to its forecasts for a post-Brexit future than its pre-Brexit successes.
Bovis Homes Group PLC has a consensus rating of ‘Hold’ with an average target price of £11.04.
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