Just to be clear, i'd heard similar quality/timing stories in this region during 2016 not just at Xmas, and had sold out my SIPP holdings in January and May in this housebuilder, and switched into two others. I suspect one problem is sufficient, decent artisans to do all the final fixings (when your salary gets 20% less Euros > home).
Yep that's my read also Pendil. i.e. Management have been quite rubbish, but its end markets are still very strong (indeed even Bovis avg selling prices were up 10%, which is encouraging when it delivers the delayed sales next month).
I think the management need to be changed and shareholder return prioritised properly - Compared to the great returns all other housebuilders Bovis needs to be keeping up with its competitions performance much better -- OR it should be bought out by them.
(at only a PE of 8, a yield of around 6% and is valued around its book value --- it certainly would make a very good buyout for a proper housebuilder) IMHO ...
Main negative seems to be "slower than expected build production ... during December". Any idea what "build production" means? Does it just mean they didn't build the houses they expected to. i.e. management incompetence rather than any softening in demand?
Bovis has tended to underperform most of the sector and not the strongest player, and yet is still reporting plenty of positive data and outlook. Main negative -Cost moderating but still increasing.
Some key points :-
"Another year of both growth in volume and increase in average sales price is expected to deliver record revenues for the Group in 2016. As a result, we are on track to deliver increased profit and a further improvement in return on capital employed, in line with our expectations.
The backdrop for housebuilding in the UK continues to be positive with demand for new homes running ahead of housing supply. Political support remains in place as evidenced by the improved planning regime and the continuation of the Help to Buy equity loan scheme. At the same time unemployment continues to be low and the mortgage market remains competitive.
Aside from the weeks immediately after the EU referendum, the Group's sales during the year to date have followed a normal seasonal pattern..
We have reservations in place to achieve over 5% growth in legal completion volume in the year and sales prices remain robust as we continue to sell homes at prices in line with our expectations. The average sales price for 2016 is expected to be around 10% ahead of last year, driven by improving mix and increased underlying market pricing.
The availability of labour remains a constraint on activity across the sector and whilst our sub-contract cost inflation rate has moderated since the second half of 2015, we continue to see market cost increases.
Our balance sheet remains robust and we anticipate a net cash position at the end of the year.
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