Bovis accused of ‘cash incentives’ to complete on unfinished properties
The Times reported that cash incentives were offered to buyers to complete or move into properties before 23 December, despite a number of issues with them. These included windows that had not yet been installed, gardens that had not been laid, and even holes in the ceilings.
A Bovis spokesman told The Times: “A limited number of customers were offered an incentive to complete before the year end and all homes were habitable with the requisite CML industry certification, with a timetable for outstanding finishing works to be carried out in the new year.”
Analysts have suggested the incentives were offered as Bovis desperately tried to meet its completion targets. They were offered just days before the firm issued a surprise profit warning to investors, in which it blamed “operational issues” for the fact it would complete around 180 fewer homes than expected in this financial year.
As a result, Bovis now expects pre-tax profit for 2016 of between £160m and £170m, compared to analyst forecasts of around £183m. Russ Mould, investment director at AJ Bell, described the profit warning as “another crack in the wall when it comes to the housebuilders sector”.
Following the profit warning, David Ritchie, the chief executive of Bovis Homes, stepped down with immediate effect on Monday, after 18 years at the firm. He said: “I believe now is the right time for someone new to lead the group into its next phase of development.”