Bovis Slumps Most Since June on Forecast Miss, Production CutBy
Bovis Homes Group Plc fell the most in more than seven months in London trading after the homebuilder reported full-year earnings that missed its forecast and said home completions may fall by as much as 15 percent this year.
Pretax profit declined 3 percent to 154.7 million pounds ($193 million), short of a December forecast range of 160 million pounds to 170 million pounds. The shares dropped as much as 10.8 percent, the most since June 27 and was down 9.6 percent at 760 pence as of 11:38 a.m.
Bovis, which delivered 3,977 homes in 2016, said it would slow production and lower completion targets for this year in order to focus on customer service issues.
“Our customer service standards have been declining for some time and. combined with the delays to production towards the year end. We have entered 2017 with a high level of customer-service issues,” said Earl Sibley, the company’s interim chief executive officer. “We are deliberately slowing down to focus on customer service, there is a lot to do but we will certainly be able to fix it.”
Bovis, which had a shortfall of 180 homes in December because of “weakness” in the production process, took a one-off charge of 7 million pounds to cover follow up work, out of pocket expenses and compensation claims from customers. That affected pretax profit, Sibley said.