Bovis Warns Of Building Delays Knock To Profits

Bovis Warns Of Building Delays Knock To Profits
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Housebuilder Bovis Homes warned over profits as it said that build delays in the run-up to Christmas would hit sales.

Kent-based Bovis blamed "slower-than-expected build production" in December for a year-end knock to its sales rate, with completions on around 180 homes set to be delayed into early 2017.

It now expects to complete between 3,950 and 4,000 homes in 2016, which will leave it nursing lower profits than previously forecast.

Bovis, which is focused on the South of England, is pencilling in pre-tax profits for 2016 of between £160 million and £170.1 million.

This is down from previous City expectations of around £183 million and will mark a sharp slowdown on earnings growth seen in 2015, when bottom-line profits surged 20% to £160.1 million.

But the group said it was in a good position for 2017, with 900 forward sales against 840 a year earlier, while it said 2016 shareholder dividend payouts were not expected to be impacted by the sales and profit blow.

Shares in FTSE 250-listed Bovis dropped 5% after the profit alert.

The group's profit warning comes just over a month after it said it was on track for record annual revenues.

It has shrugged off Brexit uncertainty in recent months, with the housebuilding sector overcoming a brief slowdown in the property market in the weeks surrounding the EU referendum in June.

Bovis said in November that, apart from a blip after the Brexit vote, sales had followed the ''normal seasonal pattern''.

But Bovis has slashed the number of sales outlets in 2016, with more site closures than site openings.

Despite the year-end production delays, it has built around 7% more homes in 2016, at 4,200, while average selling prices are up around 10%.

It also starts the new year with more homes in production and detailed planning secured for all houses expected to be sold over 2017, which it said was an improvement on a year earlier.