Bovis Homes share price rises as it cuts production by 10 per cent

 
Helen Cahill
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Bovis Homes paid out £1m to unhappy customers (Source: Getty)

Bovis Homes said this morning that it will be cutting production by at least 10 per cent as it tries to avoid a re-run of last year's customer service scandal.

The figures

This morning, Bovis Homes said trading in the first quarter had been in line with expectations. The company opened eight new sites in the period.

Read more: Bovis' new chief executive just spent £1.4m on shares

The housebuilder has been slowing its production, and said volumes will fall by between 10 and 15 per cent this year as a result. In the first six months of this year, the firm plans to complete around 1,500 homes.

Following merger proposals from Redrow and Galliford Try, Bovis Homes has paid out £2.8m to advisers.

Shares in Bovis were up 2.1 per cent by mid-afternoon.

Why it's interesting

Bovis Homes suffered after it emerged it was paying customers to move into unfinished houses to boost sales. The firm responded to a slew of complaints by slowing down its production, and investing in customer services training for all its employees, under the stewardship of new chief executive Greg Fitzgerald.

Read more: Bovis Homes rejects Galliford Try bid - and nabs its ex-boss as chief exec

Anthony Codling, analyst at Jefferies International, said: "Bovis is doing all the things it said it would at the time of its full year results, slowing production and sales rates to focus on customer service.

"The group is catching its breath after a period of high growth and will not move on until it has addressed the production issues which let its customers down."

What Bovis Homes said

Fitzgerald said: "I am confident that Bovis will return to being a leading UK housebuilder and excited by the challenge ahead.

"The clear focus for 2017 is on improving our production processes and efficiency thereby ensuring we deliver quality homes to our customers. By the end of June I will have visited all our developments and met the majority of our people; we have already identified improvements to streamline the business, provide greater focus and be more agile."

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