Bovis Homes profit swells to record; says talks with Galliford Try to combine housing businesses at early stage

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Bovis Homes and Galliford Try said they were engaged in early stage talks to combine Bovis Homes and Galliford Try's housing businesses. Bovis also said it was 'very well' positioned for the second half of the year after profit rose to a record in the first.

If the potential transaction proceeded, it is expected to value the Galiford Try's housing businesses at £1.075bn.

Galliford Try shareholders would receive 0.57406 Bovis Homes shares per Galliford Try share, which would equate to 63,739,385 Bovis Homes shares valued at £675m. Bovis would also pay Galliford Try £300m in cash and take on the latter's 10-year private debt placement of £100m.

On completion of the transaction, Galliford Try shareholders would own in aggregate approximately 29.3% of the enlarged Bovis Homes entity.

Bovis said it would fund the £300m cash payment through an equity placing of 9.99% of total shares outstanding, a debt placing and the utilisation of its existing balance sheet resources.

Also, it was anticipated that Bovis Homes' 2019 final dividend would be replaced by a second interim dividend which would be paid in cash to Bovis Homes shareholders only, the company said.

'The Bovis Homes and Galliford Try boards believe that the Potential Transaction will provide Bovis Homes with an enhanced housebuilding platform to compete more effectively in the UK housebuilding market, accelerate Bovis Homes' move into the higher growth partnerships and regeneration markets and provide Bovis Homes with a complementary geographical footprint and strategic land bank,' Bovis said.

In a separate statement, Bovis Homes said pre-tax profit swelled to a record in the first half of the year on higher completions and margin growth.

For the six months ended 30 June 2019, pre-tax profit jumped 20% to £72.4m as revenue increased 9% to £472.3m.

Completions were up 4% to 1,647 in the half and the company reported a 'strong' sales position with 96% of 2019 total completions and about 10% of 2020 private units secured.


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