Battered Bovis eyes sell-offs as profit pain rises

Bovis Homes made a desperate bid to restore its battered reputation with customers today as it hit the City with another profit warning and put parts of the business up for sale.

The housebuilder — which ousted David Ritchie from his eight-year stint as chief executive days after a profit warning in December — has come under heavy fire for offering customers payments of up to £3000 to move into unfinished homes and hit sales targets.

Former finance boss and interim chief executive Earl Sibley today pledged a “reset” of the firm and a £7 million investment in customer service, quality checks and a new “homebuyers’ panel” to monitor progress.

He admitted: “Production processes were not sufficiently robust to deliver the new homes in the timescales we wanted them to, and some of those homes we handed over were absolutely not to the high quality we would expect and that our customers would expect.”

The Bovis Homes Victims Group are in talks with the company over the details.

The boss also warned that sales would fall up to 15% this year while the company carries out a complete “strategic and structural review” of the business. Shares plummeted 61p, or 7%, to 780p.

Sibley said Bovis would “look across the board at how we generate the best value from our asset base” and the firm will appoint external advisers to help with the review. “For some years we have done three or four land sales as a natural part of our business… it is our larger sites that we would target to release capital from and reinvest.”

Schroders fund manager Andrew Brough is said to have urged Berkeley Homes to put Bovis out of its misery with a bid earlier this year, but sources close to Bovis stressed the review was likely to focus on land sales rather than a sale of the overall business.

Clyde Lewis of Peel Hunt said: “In our view, the likelihood of the company being bought by any other industry players looks remote given the liquidity in the land market.

"Therefore, the key to the shares performing better will be the group’s ability to turn itself around operationally. Without knowing who the chief executive will be to lead this charge, we see no need to get involved.”