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Britain's strong property market helped construction firm Bovis Homes achieve a 13.7 per cent pre-tax profit growth during 2006.

The construction firm, which floated on the stock exchange in 1997 112 years after originally being formed, saw its operating margin fall from 24 per cent in 2005 to 23.1 per cent a year later.

But chief executive Malcolm Harris said the company's shift towards medium-range properties within the market was already helping the overall success of the business.

"2006 was a year of excellent progress, with good growth in pre-tax profits, a high return on capital employed and strong cash management," Mr Harris commented.

"Future sustainable growth is underpinned by enhanced land holdings and an excellent forward sales position which is over 15 per cent ahead of the comparable position in 2006."

Describing the overall UK economy as "benign", he described recent retail price rises as being "affected by high international energy and base material prices" but said "these commodities have now moderated in value which should feed through to lower prices over the next 12 months".

Although Britain's residential housing market has begun to experience a slight slowdown in activity the construction sector remains firm; rising property values have boosted the portfolios of building firms' strategic landbanks. Bovis said its land holdings had increased in area during 2006.

Shares in Bovis fell by 1.1 per cent on early morning trading.