Bovis warns operating margin will be only slightly ahead of last year

Shares in Bovis Homes Group slumped almost 10% early on Thursday after the home builder revealed its mix of homes for 2015 will be more weighted to existing sites than previously expected.

The company said this was due to a number of unexpected planning delays attributable to a lack of subcontract labour availability. As a result of delays in delivering increased in production and the impact of higher costs, the FTSE 250 group anticipated its operating profit margin for the year will be just marginally ahead than last year.

However, Bovis added its sales rate has strengthened in the autumn period and its rate of weekly private sales is 20% higher year-on-year and it has sufficient reservations to deliver the planned volume growth of over 8% this year.

Sales prices have continued to be robust, the group added, indicating it expects the average sales price for 2015 to be approximately 7% ahead of last year.

Looking ahead, Bovis said it has made good progress with reservations for next year, which stand at around 1,650 homes, 18% higher than at the same point last year.

Bovis shares were down 11.93% to 871.00p at 0816 GMT on Thursday.