Bovis profits down amid customer complaints compensation costs
Profits at Bovis Homes have fallen by almost a third after the housebuilder was stung by costs relating to customer complaints over the poor quality of its homes.
The company saw pre-tax profits for the six months to June 30 plummet 31% to £42.7 million, with the firm also booking exceptional advisory costs linked to defending itself from two aborted takeover attempts from rivals Galliford Try and Redrow.
The group has so far set aside £10.5 million to cover remedial work and compensation for affected customers after the firm was dogged by complaints over homes that were sold unfinished and had electrical and plumbing faults.
Revenue for the period rose 4% to £427.8 million, with the average price of the firm's homes rising 9% to £277,400.
But completions fell 6% to 1,512 following a pledge to slow the rate at which it builds homes in 2017 as part of a "re-set" under new boss Greg Fitzgerald.
Bovis is aiming to build 4,000 homes per year, lower than previous targets of 5,000 to 6,000.
The chief executive described the first half as a "period of stabilisation and strategic reorganisation" as he looks to get the business back on track.
He added: "I have visited all our offices and the vast majority of our developments, and have been hugely impressed by the desire of our dedicated staff to address and rectify the challenges faced by the business.
"As a result I am confident that our new strategy will set the Group on the path to sustainable, profitable growth.
"The new strategy of disciplined volume growth, allied with a renewed focus on customer satisfaction and build quality, will deliver the homes that are required in the locations where people want to live."
As part of Mr Fitzgerald's shake-up, he will reduce headcount at the business, with 120 jobs already axed.
Bovis said that it has seen "a good pick-up in sales" in the traditionally quieter months of July and August and a "significant improvement" in its customer satisfaction score, which has been trending at 74% since the beginning of February.
The group said it is confident of delivering profit in-line with management expectations for 2017 and also announced special dividends totalling £180 million to be paid over three years to 2020.