Bovis Homes has elevated its dividend and stated there was a “step change” in the caliber of its homes because it predicted more powerful buying and selling in 2018, just annually after its former boss resigned carrying out a surprise profit warning.
The housebuilder finished 3,645 homes in 2017, 9pc less than in the last year, but emphasised it was completed in a “controlled and disciplined manner”. It’d faced critique for low quality homes with electrical and plumbing problems.
Boss David Richie stepped down from the housebuilder annually ago after a slowdown within the rate of creating and purchasers in December 2016 motivated the organization to issue an unexpected profit warning, sending shares tumbling.
Greg Fitzgerald, the previous leader of Galliford Try who required over as boss in May, stated: “The audience were built with a very disciplined year finish and delivered against all its financial and operational targets for 2017.”
He added that there was a “step-change in the caliber of our homes delivered on completion”, that they stated had been reflected within the company’s degree of client satisfaction, “which is constantly on the improve”.
Bovis lifted its final dividend by 8pc to 32.5p and stated it likely to increase ordinary dividends by 20pc in 2018 and pay a unique dividend for the finish of the season, “reflecting the strong outlook”.
Analysts hailed Mr Fitzgerald’s turnaround inside a short time, even though they noted the market was very favourable for housebuilders.
Neil Wilson, of ETX Capital, stated: “Yet more encouraging is a result of Bovis Homes today confirm what we should always suspected – the issues with quality and contractors might be easily fixed and Greg Fitzgerald was the person to do the job.”
The organization stated it had been “confident of delivering a substantial improvement in financial performance and profitability” this season, having already notched up £417m price of forward sales, 40pc of their revenue forecast for 2018.
George Salmon of Hargreaves Lansdown stated: “After the main problems Bovis had around quality and client satisfaction, the turnaround under industry stalwart Greg Fitzgerald is gathering momentum.”
He stated that Bovis’ full-year results, due in March, were “unlikely to create the planet alight, as they’ll be considered lower by the price of customer redress and also the fact completions happen to be scaled to prioritise operational enhancements”.
But he cautioned that “as the new Chief executive officer has been doing a remarkable job, the issue for investors would be that the housing boom, fuelled by supportive Government policies like Assistance to Buy, can’t continue forever”.
Shares in Bovis were up 3.7pc at £11.91 at the begining of trade.