Bovis Homes completions dip but housebuilder says quality has improved

 
Caitlin Morrison
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Bovis is trying to turn itself around (Source: Bovis Homes)

Bovis Homes has reported a drop in completions during 2017, but said this was part and parcel of a "very disciplined year".

Completions fell from 3,977 to 3,645, "in a controlled and disciplined manner", the group said. Private home completions dropped to 2,573 from 2,903 in 2016, while affordable housing was steady at 1,072, dipping only slightly from 1,074.

The average selling price rose seven per cent to £272,000, from £254,900.

Bovis said it had driven sales from older, lower margin sites and significantly reduced levels of both stock and part-exchange properties, "consistent with plans to re-set the business".

The FTSE 250-listed firm had a tumultuous 2016, with housebuilding slowing and the share price struggling to pick up after the Brexit vote pushed it off a cliff.

Ex-Galliford Try boss Greg Fitzgerald was brought in as chief exec in April last year to lead a turnaround at Bovis, and today he said those plans were on track.

"The group had a very disciplined year end and delivered against all of its financial and operational targets for 2017," said Fitzgerald.

"There has been a step change in the quality of our homes delivered on completion and I'm pleased to see this reflected in our level of customer satisfaction which continues to improve.

"We've made excellent progress with our balance sheet restructuring resulting in a year end cash position significantly ahead of expectations. Our forward order position is strong, and with robust industry fundamentals, we expect the group to deliver a significant improvement in profitability in 2018."

Shares in the group were up 3.3 per cent in early trading, and analysts noted that Bovis has bucked the trend set by rival housebuilders earlier in the week.

"Investors are embracing its Jan trading update, at odds with how they digested this week’s statements from bigger peers Persimmon, Taylor Wimpey and Barratt Developments," Mike van Dulken, head of research at Accendo Markets.

"Bovis completions may have fallen by 8.3 per cent, however, investors are unperturbed. This is thanks to average selling prices per completion climbing an almost offsetting seven per cent. Management’s continued focus under the new chief executive, shifting the sales the mix away from older, lower margin sites is clearly working, and a brand new range will launch this year."

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