House­builder Bo­vis al­lo­cates £3.5m in ex­tra fund­ing to cover re­me­dial work

● Firm says it has made good progress ad­dress­ing ‘high level of cus­tomer is­sues’

The Scotsman - - Business - By RAVENDER SEMBHY busi­ness­desk@scots­ @BOVISHOMES

Bo­vis Homes is to set aside a fur­ther £3.5 mil­lion to deal with cus­tomer com­plaints over the qual­ity of its homes.

The house builder has al­ready set aside £7m to cover re­me­dial work and com­pen­sa­tion for af­fected cus­tomers after the firm was dogged by com­plaints over homes that were sold un­fin­ished and had elec­tri­cal and plumb­ing faults.

In a trad­ing up­date yes­ter­day, Bo­vis said the ex­tra pro­vi­sion is to en­sure it is “fully re­sourced” to com­plete work quickly. The firm said: “We have made good progress ad­dress­ing a high level of cus­tomer is­sues in the first half.

“Fol­low­ing the CEO’S review of the busi­ness, the group has taken a fur­ther £3.5m of pro­vi­sion in the first half, tak­ing the to­tal one-off costs re­lated to these legacy is­sues to £10.5m.

“This fur­ther pro­vi­sion will en­sure we are fully re­sourced to com­plete the works iden­ti­fied as swiftly as pos­si­ble whilst at the same time de­liv­er­ing the ap­pro­pri­ate high level of ser­vice to our new cus­tomers.” In Fe­bru­ary, Bo­vis an­nounced a raft of im­prove­ment mea­sures, in­clud­ing hav­ing more staff to deal with com­plaints, the cre­ation of a ded­i­cated home­buy­ers’ panel and an im­proved qual­ity as­sur­ance process.

The firm also said it would slow the rate at which it builds homes in 2017 as part of a “re­set” and now ex­pects to de­liver com­ple­tion vol­umes for the full year at around 10 per cent to 15 per cent below the 2016 level.

In its up­date, the group said it de­liv­ered 1,512 com­ple­tions com­pared to 1,601 in the same pe­riod in 2016 as de­mand “con­tin­ues to be ro­bust”.

Bo­vis noted first half prof­itabil­ity has been im­pacted by in­creased build costs and an in­creased level of in­vest­ment to ad­dress legacy is­sues. The av­er­age sell­ing price of its homes rose 9 per cent to £277,000, driven by “changes in mix and a mod­est in­crease in av­er­age un­der­ly­ing prices”.

Chief ex­ec­u­tive Greg Fitzger­ald said: “The trad­ing per­for­mance in the first half of our fi­nan­cial year is in-line with man­age­ment ex­pec­ta­tions.

“We con­tinue to iden­tify and im­ple­ment op­er­a­tional im­prove­ments and I am very con­fi­dent we can de­liver a suc­cess­ful turn­around, re­turn­ing Bo­vis Homes to be­ing a lead­ing UK house­builder.”

Har­g­reaves Lans­down an­a­lyst Ge­orge Salmon said: “Re­pair­ing the dam­age done to the group’s rep­u­ta­tion might well take some time, but with in­dus­try vet­eran Greg Fitzger­ald in­stalled as CEO, the group has at least got an ex­pe­ri­enced cam­paigner to lead the re­build­ing project.”

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