Shares in troubled housebuilder Bovis Homes rose this morning after it said it had set aside another £3.5m to improve customer service after a rash of complaints about the quality of its homes.
Bovis, which last year said it was slowing down production, said trading in the six months to the end of June were in-line with expectations, with 1,512 new homes completed, although that was, as it had warned, between 10 per cent and 15 per cent below last year's level.
Average selling price rose nine per cent, to £277,000, while it increased its consented land bank by 2,337 plots.
However, net debt swelled from £7.6m last year to £33m.
Finally, it said including its latest £3.5m provision, it expected one-off costs related to those quality complaints to hit £10.5m.
Shares rose 1.4 per cent to 983p in early trading.
Why it's interesting
Although all the listed housebuilders took a knock after the Brexit vote, most have staged a glorious recovery. Bovis is an exception: its shares are still hovering below the 1,023p peak they hit at the end of last May.
The first sign something was up came between Christmas and New Year, when it admitted it was pushing some completions into 2017. By mid-January, chief executive David Ritchie had fallen on his sword and in March it became the subject of a half-hearted bidding war between Redrow and Galliford Try, which was abandoned after a couple of weeks.
Still, there are signs of light at the end of the tunnel: not only does Bovis have a new chief executive who is so confident in its potential he has so far spent £3.4m of his own money on shares, but it looks like it is addressing those customer service concerns, with a slowdown in production and promises it will fix those problems "as swiftly as possible". Onwards and upwards.
What Bovis said
Greg Fitzgerald, Bovis' new chief executive, said:
The trading performance in the first half of our financial year is in-line with management expectations. In the past 11 weeks I have spent a good amount of time with each of our operating regions, visited 85 sites and met the vast majority of our people.
We continue to identify and implement operational improvements and I am very confident we can deliver a successful turnaround, returning Bovis Homes to being a leading UK housebuilder.
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