Restructuring costs hit Bovis Homes’ pre-tax profits

Bovis Homes pre-tax profits have taken a 31% hit by what the group describes as “legacy customer service costs, an overweight operating structure, investment to change the business, and defence costs.”

The group posted a pre-tax profit of £42.7m, down from £61.7m the previous year. There was a modest growth of 4% in group revenue, from £412.8m to £427.8m. Dividend per share remained unchanged at 15p.

Greg Fitzgerald, Chief Executive said, “The first half of 2017 has been a period of stabilisation and strategic reorganisation for Bovis Homes Group.  Since joining the business in April 2017 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.  The Group’s strong balance sheet and valuable land bank mean we are well set to provide the stable returns to shareholders that their patience and support have deserved.”

Nonetheless, Bovis Homes has cut its headcount by around 120. The total restructuring cost of the business is expected to be approximately £4 million which will be incurred as an exceptional item in the second half of this year.

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