Is Bovis Homes Group plc a stronger investment opportunity than Persimmon plc, Barratt Developments Plc and Bellway plc after trading update?

Does Bovis Homes Group plc (LON:BVS) (BVS.L) have more investment potential than Persimmon plc (LON:PSN) (PSN.L), Barratt Developments Plc (LON:BDEV) (BDEV.L) and Bellway plc (LON:BWY) (BWY.L)?


Bovis Homes Group plc (LON:BVS) (BVS.L) has released a trading update today for the period from 1 July to 10 November. The company seems to be making progress with its strategy. It is fully sold for its FY2017 completions, with the average sales rate over the period being 0.52 versus 0.48 for the same period of last year.

Pricing remains robust, and Bovis expects to deliver an increase in the average selling price for FY2017. This has largely been driven by changes in mix, with a modest increase in underlying prices.

The company continues to seek to deliver a higher level of customer satisfaction. Its HBF Customer Satisfaction rating on completions since 1 February 2017 has averaged 75%, which is equivalent to a 3-star rating. The company continues to be confident in its ability to achieve a 4-star rating over the medium term.

Initiatives to simplify and streamline the company’s operating structure have continued. It is on track to deliver its target of overheads being a maximum of 5% of revenue from FY2018 onwards. There is also a programme of balance sheet optimisation ahead which is targeting a minimum of £180 million additional cash flow into the business by December 2018.

In the last 6 months the Bovis share price has gained 24%. That’s a better performance than sector peers such as Persimmon plc (LON:PSN) (PSN.L), Barratt Developments Plc (LON:BDEV) (BDEV.L) and Bellway plc (LON:BWY) (BWY.L). The Persimmon share price is up 14%, Bellway has gained 19% and Barratt is up 3% during the same time period.

In my view, Bovis has investment appeal. Although there is some way to go with its turnaround plan, it seems to be making good progress judging by today’s update. Therefore, within what I view as an appealing sector at the moment, it could perform relatively well in future.

About Robert Stephens 2856 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email or use one of the other contact methods available on the 'Contact Us' page