Ash4781 Posted September 10, 2007 Share Posted September 10, 2007 (edited) http://www.bloomberg.com/apps/news?pid=206...EE&refer=uk Bovis Profit Rises 3.4% After Accelerating Land Sales (Update3) Sept. 10 (Bloomberg) -- Bovis Homes Group Plc, this year's worst-performing European homebuilding stock, said first-half profit rose 3.4 percent after it took advantage of soaring land values to sell some of its estate. Revenue from land disposals helped Bovis counter a slowdown in the U.K.'s housing market. Higher interest rates have scared away home seekers, who are now taking longer to decide on purchases, Bovis said today. First-half volumes, reservations and prices were almost static after the Bank of England raised borrowing costs five times in the past 13 months. ``Downgrades are likely following the first-half figures, with the main culprit being volumes,'' said Alastair Stewart, an analyst at Dresdner Kleinwort in London. After gaining for four straight years through 2006, Bovis shares have fallen 32 percent this year, making the company the worst-performing member of the Bloomberg Europe Home Builders Index of leading homebuilders stocks in the region. Land sales generated 19.1 million pounds in revenue during the first half, almost double the year-earlier total. Bovis is expecting an increase in unit sales of 10 percent in 2008. To help capture customers, a new range of incentives will be introduced to help counter the extra financial burden of higher borrowing costs. Those will include subsidized mortgages for the first three years and offering shared-ownership purchases. Sorry for the cut and paste. Builders giving a warning ? Edited September 10, 2007 by Ash4781 Quote Link to comment Share on other sites More sharing options...
Timil Posted September 10, 2007 Share Posted September 10, 2007 Builder selling their land bank its like a baker going into their store and flogging flour out the backdoor, must be getting grim. Quote Link to comment Share on other sites More sharing options...
Griptool Posted September 10, 2007 Share Posted September 10, 2007 This is big news, large developers cherish their land banks and covet the land banks of their competitors, a large developer selling land to balance the books means the writing's on the wall. Its like Tesco selling supermarkets Quote Link to comment Share on other sites More sharing options...
REP013 Posted September 10, 2007 Share Posted September 10, 2007 To help capture customers, a new range of incentives will be introduced to help counter the extra financial burden of higher borrowing costs. Those will include subsidized mortgages for the first three years and offering shared-ownership purchases. Why not just drop the prices? Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted September 10, 2007 Author Share Posted September 10, 2007 http://news.bbc.co.uk/1/hi/business/6986620.stm BBC report Quote Link to comment Share on other sites More sharing options...
DoctorJ Posted September 10, 2007 Share Posted September 10, 2007 http://news.bbc.co.uk/1/hi/business/6986620.stmBBC report "The group continues to anticipate an increase in volume ahead of that delivered in 2006," he added.That prediction is in contrast to figures in Monday's Financial Times. It says that housebuilders started work on 86,269 new homes in the first six months of this year, down 9% on the same period of 2006. telling porkies. naughty piggy Quote Link to comment Share on other sites More sharing options...
Frank Hovis Posted September 10, 2007 Share Posted September 10, 2007 Builder selling their land bank its like a baker going into their store and flogging flour out the backdoor, must be getting grim. Selling off the landbank is officially the end of the boom. The bust has started. Quote Link to comment Share on other sites More sharing options...
DoctorJ Posted September 10, 2007 Share Posted September 10, 2007 Selling off the landbank is officially the end of the boom. The bust has started. True. This is the news I have been waiting for. HPC here we come! Quote Link to comment Share on other sites More sharing options...
Guest KingCharles1st Posted September 10, 2007 Share Posted September 10, 2007 (edited) Why not just drop the prices? BLASPHEMER- STONE HIM STONE HIM!!! Edited September 10, 2007 by KingCharles1st Quote Link to comment Share on other sites More sharing options...
Its time to buy Posted September 10, 2007 Share Posted September 10, 2007 profits are up though er..... through selling its land rather than its houses [core business] the ceefax p201 headlines makes it sound good - but readers tend not to break the article down like you have done here. Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted September 10, 2007 Share Posted September 10, 2007 Why not just drop the prices? Too sensible for the madness that the UK housing market has become. Besides, prices only ever go up. Quote Link to comment Share on other sites More sharing options...
Bearfacts Posted September 10, 2007 Share Posted September 10, 2007 Why not just drop the prices? Because if the builder gives the buyer 20k to help them buy the property to all intents and purposes the price has not fallen but if they just cut the price by 20k instead then that price cut will register in the housing data and people will start to realise that prices are falling. They pulled this stunt during the 2004 - 2005 dip , if they hadnt then I expect the price falls would have been transparent and the market would have gone down a lot further possibly beyond teh point of rescue by Flash Gordon. Quote Link to comment Share on other sites More sharing options...
29929BlackTuesday Posted September 10, 2007 Share Posted September 10, 2007 profits are up though er..... through selling its land rather than its houses [core business]the ceefax p201 headlines makes it sound good - but readers tend not to break the article down like you have done here. "Local cobbler sells tools - Cobbler's profits up month-on-month" Quote Link to comment Share on other sites More sharing options...
Sonic the Hedge Fund Posted September 10, 2007 Share Posted September 10, 2007 This is big news, large developers cherish their land banks and covet the land banks of their competitors, a large developer selling land to balance the books means the writing's on the wall. Its like Tesco selling supermarkets Erm....they are! http://thescotsman.scotsman.com/business.cfm?id=442822007 Looks like Tesco have called the top for UK property Quote Link to comment Share on other sites More sharing options...
Dead Spider Posted September 11, 2007 Share Posted September 11, 2007 But for every seller there must be an anticipant buyer . So who's buying the land ? Quote Link to comment Share on other sites More sharing options...
needle Posted September 11, 2007 Share Posted September 11, 2007 But for every seller there must be an anticipant buyer .So who's buying the land ? Depends on the price and how badly the vendor needs to sell, doesnt it? Quote Link to comment Share on other sites More sharing options...
nohpc Posted September 11, 2007 Share Posted September 11, 2007 I am confused here. Who the hell is buying the land? If bovis don't think they can build on it and make money then why would anybody else want to take a chance? Quote Link to comment Share on other sites More sharing options...
Minesapint Posted September 11, 2007 Share Posted September 11, 2007 I am confused here. Who the hell is buying the land? If bovis don't think they can build on it and make money then why would anybody else want to take a chance? If youre a builder with surplus cash then you buy up land for future years - builders can have land banks stretching back many years or it might be a builder with very little land bank who needs something to build even in a downturn. Quote Link to comment Share on other sites More sharing options...
EmpiricalBear Posted September 11, 2007 Share Posted September 11, 2007 Who is buying the land? There are a lot of possibilities including housing associations well off people who now view land as an investment. If this land has planning it could be sold to smaller developers. It might even be possible to split it and sell it to self-builders. Quote Link to comment Share on other sites More sharing options...
canny man Posted September 11, 2007 Share Posted September 11, 2007 Some if the landbank will be very old and have a book value close to zero (if they haven't carried out any revaluations in the past). Therefore a relatively weak, BMV, private sale can deliver a big accounting profit and flatter the figures. Quote Link to comment Share on other sites More sharing options...
Guest grumpy-old-man Posted September 11, 2007 Share Posted September 11, 2007 I am confused here. Who the hell is buying the land? If bovis don't think they can build on it and make money then why would anybody else want to take a chance? because for every person who thinks the crash is here, there will be 1000 that don't know. So they are selling to people who don't know imo. They are selling because they know the value of that land wil drop in the coming years & it will boost there "profits" for the year. That's why a lot of companies have been showning profits for 2007 imo, they have done so by downsizing, cutting operating costs & then that looks like a profit. Quote Link to comment Share on other sites More sharing options...
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