Homebuilder Bovis (BVS) said improved house prices and build cost savings meant full-year profit was on track to outperform market expectations of £16.3 million.

In line with management expectations, the group completed 1,901 homes in 2010 compared to 1,803 in 2009. The average sale price for the group was £160,700, which was 4% higher than the average sale price of £154,600 in the previous year.

With overheads also in line with expectations, the FTSE 250-listed firm said it expected the operating profit margin for 2010 to be at least 7%.

As at 1 January, the group held a forward sales order book for delivery in 2011 of 420 homes, this is lower than the forward sales order book at the start of 2010, which had 643 homes for delivery.

The cash position of the group at the end of 2010 was also strong, with net cash of £52 million. During 2010, around £138 million was invested in land to contribute to the growth strategy of the group.

As a demonstration of its confidence in the group’s position, the board has decided to recommence payment of dividends to shareholders, the value of which will be announced at the next AGM.

David Ritchie, chief executive officer of Bovis Homes, said: “We are pleased with the positive group performance in 2010 and remain confident in our growth strategy through the acquisition of good quality residential land at attractive rates.”