* Some home buyers have complained of poor quality
* Bovis fails to capitalise on growth seen by rivals
* Expects to build 10-15 pct fewer homes this year
(Adds comments, details)
By Costas Pitas and Esha Vaish
LONDON, Feb 20 British builder Bovis
said it will slow construction this year as it moves to improve
the quality of its homes, after a backlash from some buyers
helped push down profits in 2016 with a further fall expected
Some buyers of Bovis homes have complained about issues
ranging from a lack of sealant in bathrooms to the heads of
nails poking through some walls.
Late completions and perceived shortcuts on quality prompted
some buyers to go public, including through the Facebook group
'Bovis Homes Victims' which has over 1,400 members, harming the
The company, which is looking for a new CEO after David
Ritchie quit in January following a profit warning and has
become the subject of takeover speculation, failed to complete
around 180 homes last year.
Interim CEO Earl Sibley said that some properties not
finished last year had yet to be handed over to buyers, leading
to delays for customers and potential costs for the firm.
Bovis's shares tumbled 10 percent as it reported a 3 percent
drop in 2016 annual pretax profit and warned that profits would
fall again this year as it builds fewer homes.
That puts it at odd with rivals who have posted bumper
profits in recent months as housing demand outstrips supply
across much of Britain.
Bovis built nearly 4,000 homes last year but said it
expected volumes to fall between 10 and 15 percent in 2017.
It said it had spent 7 million pounds to fix substandard
work on existing houses, denting its annual pretax profit, which
came in at 155 million pounds ($193 million), below its forecast
of between 160 million and 170 million pounds.
Last month, Bovis shareholder Schroders wrote to
London builder Berkeley asking it to consider a merger,
but sources told Reuters they saw little logic in such a tie-up.
Asked about whether the firm was involved in any M&A
activity, Sibley said he was focused on improving quality to
turn the business around.
"If there was something to say, we would have to say it
publicly in the normal way, following the rules."
The company announced other measures on Monday, including
additional staff to deal with customer enquiries, more ground
operatives and plans to recruit a customer services director to
oversee a wide-ranging overhaul.
"Through the beginning of 2017, we've done a thorough review
across the business to make sure we've captured those issues and
captured the cost in 2016," Sibley told Reuters.
"We are extending some of our development programmes ... to
ensure that we do have sufficient time from the final
certification that we get to deliver a quality home to our
($1 = 0.8046 pounds)
(Reporting by Costas Pitas and Esha Vaish; Editing by Keith
Weir and Susan Fenton)