Housebuilder Bovis Homes has posted falling profit for 2016, impacted by a £7 million hit linked to a big jump in customer complaints about the state of houses it sold.
Bovis admitted customer service standards “fell significantly” in the year after being dogged by complaints over homes that were sold unfinished and had electrical and plumbing faults.
Our customer service standards have been declining for some timeBovis Homes
It said: “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. Our customer service proposition has failed to ensure that all of our customers receive the expected high standard.”
In what the group said was a “difficult” year, there was a 3 per cent year-on-year drop in pre-tax profits to £154.7m. However, revenue rose 11 per cent to £1.1 billion and its average sales price rose 10 per cent to £254,900.
Bovis’s shares tumbled on the back of the results, closing down 10.2 per cent at 755p.
The £7m provision will cover remedial work plus compensation for affected customers and the company has announced measures to improve service, such as more staff to deal with complaints.
The group also said it would slow the rate at which it builds homes in 2017 as it focuses on “re-setting the business”.
George Salmon, equity analyst at Hargreaves Lansdown, said: “While Bovis has its own issues to deal with, a chunky 10 per cent increase in average prices and continued strong demand from buyers show the sector as a whole is proving resilient despite fears over the effect of the UK’s withdrawal from the EU, though it is still of course early days in the process.”