Bovis Homes Group plc (LON:BVS) (BVS.L) has issued a trading update for the year to 31 December 2017. It has seen a marked improvement in customer satisfaction, and has been able to deliver a continued improvement in HBF scores.
It delivered 3,645 completions in the year, which is down on 2016’s figure of 3,977. The average selling price on completions in the year increased by 7% to £272k.
The company has driven sales from older, lower margin sites and in doing so has reduced its levels of both stock and part-exchange properties. Alongside investment in process change and customer service, this has adversely impacted the company’s operating margin in 2017.
Additionally, and also previously disclosed, exceptional and one-off items in the year comprised of £3.5 million in customer care costs, £2.8 million in advisory fees and a £4 million restructuring charge. However, profit before tax will be in line with management expectations.
Bovis has completed the disposals of its shared equity portfolio, a number of part exchange properties, five pieces of land and three owned offices. Together, they had a positive impact on its balance sheet, with its net cash position now being £145 million.
In the last year the Bovis share price has risen 45%. That’s a better performance than other housebuilders such as Berkeley Group Holdings PLC (LON:BKG) (BKG.L), Barratt Developments Plc (LON:BDEV) (BDEV.L) and Bellway plc (LON:BWY) (BWY.L). Berkeley Group is up 44%, Barratt has gained 24% and the Bellway share price is up 38% during the same time period.
In my view, Bovis is making good progress with its strategy. It found itself in a difficult position in recent years, with customer satisfaction levels being relatively low. However, it is making improvements in this area and with a focus on sustainable growth as well as improvements to its financial standing, it seems to have a bright future.