Bovis Homes Group BVS is being forced into taking a one off £7m hit because of claims arising from its poor build quality and it is brazen faced enough not to issue an apology either to the shareholders or even more importantly, to its customers. In fact in 2016 it imposed a rise of 10% in its average selling price for those who were unfortunate to buy one of its shoddily built houses but it does make a promise to those who buy one of its homes in 2017 – it will put prices up even higher.
For the year to the 31st December revenue rose by 11% but profit before tax was by 3% and basic earnings per share by 5%. As ever where management does not want the shareholders to get angry and seek revenge, it is hiking the dividend by 11% as the best means of self protection and promises that this years dividend will not be cut. It is also changing its priorities and customers are going to be put first which makes the mind boggle as to where they came in the pecking order, last year. It is also going to build fewer houses and sell off some of its land.
What makes it even worse is that Bovis lied in a trading update which it issued on the 28th December, only 3 days before its year end. It lied in postitive manner by claiming that its problem was that in December build production had been lower than expected. It deceived by omission, in failing to even hint at serious customer care and quality issues which it then must have known were going to cost it millions. Rarely has a major UK company gone to such lengths to hide its true state of affairs from shareholders and potential investors. Only a few days later when the CEO of some 8 years standing suddenly announced his departure with immediate effect, did it become apparent that the company was in serious trouble.
The resignation was notified purely as a Change in Directorate, with thanks given to the outgoing CEO for his years of service. Again Bovis kept its problems under wraps. The company behaved as if it was hoping it could get away with a cover up. Should the stock market not have been notified that the Board was keeping secret material facts of which it knew and which were bound to affecting the share price of the company ? Are those who were in the know and responsible for deceit, fit to be Directors of a public company.watch Live by Night movie now
So far this morning the share price, which had been attempting something of a rally recently, fell by just short of 10%.