Bovis has also taken a one-off ‘customer care provision’ of £7m to sort out all the problems it has with unhappy home buyers.
“Our production rate in early January has been slowed to support our priority focus on customer service, and current production programmes have been extended to allow sufficient time to ensure each home is delivered to the high standard of quality that we and our customers expect,” the company has revealed.
Bovis Homes has faced a barrage of well-publicised customer complaints for allowing – encouraging – customers to move into their new homes before snagging had been undertaken.
A Facebook group called Bovis Homes Victims has more than 1400 members.
Chief executive David Ritchie has now left the company and finance director Earl Sibley is in temporary charge.
Reporting its 2016 annual results today, Bovis Homes said: “The group is focused on making 2017 the year when we re-set the business and deliver on our operational priorities. Reflecting this we are slowing our rate of production and targeting completion volumes for 2017 to be c. 10% to 15% below the 2016 level, before a return to normal industry production levels.”
For the year to 31st December 2016 Bovis Homes Group plc increased its revenue by 11% to £1,054.8m but pre-tax profit dipped 3% to £154.7m. The push to get residents into incomplete new homes before the end of the year meant that legal completions were indeed up by 1%, to 3,977, at an average sale price of £254,900.
However, 2017 is unlikely to look so good. “There will inevitably be an impact on our earnings and cashflow from the actions we are taking in 2017,” the company admitted.
Chairman Ian Tyler said: "Despite the difficulties of 2016, the board remains confident in the group's abilities to deliver improved returns to shareholders. The process of transformation is already underway under Earl Sibley's interim leadership and I am confident the plans in place will address the operational weaknesses we have seen in our business, and focus us once again on delivering high quality product and service to our customers. Further, we are undertaking a strategic and structural review of the business to ensure we meet our commitment to deliver the highest possible returns from our valuable land assets."
Interim chief executive Earl Sibley said: “We have a clear set of operational priorities for 2017 and are fully committed to improving our levels of customer service and delivering high quality homes this year and in the future. The fundamentals of the business remain strong with a robust financial position and high quality land bank. With our focus on higher levels of customer service, improved build efficiency, and a refreshed culture, we are confident we will generate enhanced shareholder returns over the medium term.”
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