Bovis Homes Group

Bovis Homes Group plc

Type	Public (LSE: BVS)
Industry	Housebuilding
Founded	1965
Headquarters	Kings Hill, West Malling, UK
Key people	Ian Tyler, Chairman Greg Fitzgerald, CEO
Revenue	£1,028.2 million (2017)[1]
Operating income	£121.2 million (2017)[1]
Net income	£91.3 million (2017)[1]
Website	www.bovishomesgroup.co.uk/

Bovis Homes Group plc is a second tier national British housebuilding company based in Kings Hill, West Malling, Kent. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

History

Bovis Homes’ origins lay in the early post-war housing operations of Bovis Holdings (see also Bovis Construction). Bovis had been acquiring housing land in the early 1950s but the level of housebuilding was modest until 1967 when it acquired Frank Sanderson’s Malcolm Sanderson Developments and the much larger RT Warren.^[2] Frank Sanderson rapidly expanded Bovis’s housing through acquisition including the quoted Page-Johnson and Varney Holdings; by 1973 Bovis was probably the country’s second or third largest housebuilder, with sales of over 2,600.^[3]

The secondary banking crisis adversely affected Bovis Holdings’ banking subsidiary and the Group had to be rescued by P&O in March 1974.^[4] Frank Sanderson left Bovis in 1973 and Philip Warner was appointed managing director of Bovis Homes, a position he held for 25 years.^[5] During the 1970s Bovis reduced its housing volumes as it concentrated on rebuilding profitability, but it began to expand again in the 1980s.^[3]

The Company was demerged from P&O and was floated on the London Stock Exchange as Bovis Homes in 1997.^[4] On 9 January 2017, the company announced that its chief executive David Ritchie, who had been at the company for 18 years, had stepped down with immediate effect; he was quoted to have said that it was time for someone new to lead the group.^[6][7] Greg Fitzgerald took over as chief executive on 18 April 2017.^[8]

Operations

A Bovis Homes development near Southampton

Bovis Homes operates seven regional businesses and builds a wide range of properties from one-bedroom apartments up to six-bedroom executive houses. It has offices in Kings Hill, Basingstoke, Reading, Exeter, Bishops Cleeve, Stafford, Coleshill and Milton Keynes.^[9]

Controversies

Following the resignation of David Ritchie as the CEO on 9 January 2017,^[6][7] shortly after the company had issued a profit warning following a slow down in sales in December 2016,^[10] the company was at the centre of controversy when news reports appeared that it had tried to issue cash incentives to customers in order for them to complete purchases and move into unfinished new homes.^[11]

After a troubled period of increased press coverage of complaints from customers about perceived shortcuts of quality of homes built by the company as well as the formation of a Facebook group by unhappy customers called "Bovis Homes Victims Group",^[12] which also had a You Tube channel,^{[13][14][15][16]} Bovis Homes interim CEO Earl Sibley acknowledged that their customer service levels had failed to meet the expected standards. He announced that the company would set aside £7m, to compensate customers who had been affected by finding problems with their new homes.^[17][18] In the directors' statement, the company acknowledged that their customer service standard had been "declining for some time which combined with the delay in production, had caused them to start the year 2017 with a high level of customer service issues".

On 19 April 2018 The Times,^[19] the Daily Mail,^[20] and The Sun,^[21] reported Bovis Homes were hit with fresh accusations of continued quality issues and poor customer service, misleading buyers, "deliberately" delaying essential repairs,failing adequately to repair defects and engaging in "underhand behaviour" to limit bad publicity. The Times reported that the previous year Bovis were forced to apologise to customers for poor workmanship after the newspaper revealed that hundreds of buyers had complained of bouncing and vibrating floors, leaks, missing insulation panels, poor drainage and unfinished gardens.

The Times reported that the company set aside more than £10 million to deal with the complaints, but customers said service standards remained appalling. A whistleblower who worked as a customer service manager said he feared that construction problems were so common that the company might need to spend significantly more. The problems contributed to Bovis becoming the only national builder to be awarded a two-star rating out of five in the Home Builders Federation’s (HBF) annual customer satisfaction survey for the year ending September 2017. A two-star rating means that between 30 and 40 per cent of customers would not recommend the company to a friend. The newspaper reported that when The Times did a mystery shop on eight Bovis developments, all bar one claimed to have a star rating of three or above. Half claimed the company had four or five stars. HBF rules say companies must use only their current star rating for marketing. The whistleblower, who did not want to be named, said: "I am amazed they got two stars to be honest. It should probably have been one. Some of the houses I came across were terrible. Don’t get me wrong, they look lovely but when you start looking around from a construction perspective some were a shambles. Pipes were not fitted properly, air bricks were half buried, walls were not sound, and the ground not level. In one case I saw a soil pipe that was not capped so excrement started filling up behind kitchen cabinets." He believed the commission structure employed by Bovis encourages sales staff to exaggerate. He said: "I don’t know how they sleep at night with what they say, but all that money under the mattress probably helps." Almost 3,000 people have joined the Bovis Homes victims’ group on Facebook. The company has sold 17,000 homes in the past five years. Members report problems from leaking shower trays to serious structural faults. Several have complained about finding bottles of urine behind bath panels or in loft insulation. The whistleblower said it felt to him like delays were a deliberate strategy to make customers give up on complaints. The victims group is building a website. However, Bovis has already registered the web address bovishomesvictimsgroup.com. The company says this is standard practice for big business.^[22]

On 10 May 2018, The Independent^[23] reported fresh allegations of home buyers being offered cash for positive feedback. The newspaper reported that Bovis Homes is at the centre of a new row after an investigation by The Independent found that some customers had allegedly been offered rewards in return for completing positive satisfaction surveys. Last year the company was awarded a 2-star rating by the House Builders Federation after a well-documented series of failings that left customers living in faulty homes. Five customers say the incentives were offered in return for positive feedback, something Bovis adamantly denies. Now, nine homebuyers have said that Bovis representatives offered them rewards if they agreed to fill in the HBF customer satisfaction form, the results of which are used to inform the annual ratings.

Another couple said a Bovis employee offered free turf and John Lewis vouchers in December 2017 if they gave good feedback on the HBF survey or if they let the Bovis sales representatives fill in the form themselves. In a further example, a homebuyer who bought her property in Oxfordshire in January 2017, said she was offered vouchers if she gave a positive response to the question of whether she would recommend Bovis to a friend. She said: "We filled out the [HBF/NHBC] survey, gave 1 star at most, but we were told we would be given £500 worth of vouchers if we recommended Bovis to a friend." Another homebuyer, who wished to remain anonymous, said her site manager told her in February 2017 he would extend her patio for her if she gave him a good review. She told The Independent: "I was advised by the site manager that the feedback form was very important and if you scratch my back, I'll scratch yours … he intimated that he would contribute towards turning a side garden into an extra parking spot if we looked after each other …". In another instance, in February this year, a Bovis site manager sent a customer an email – seen by The Independent – confirming that the company would pay a month's worth of household bills but appeared to require her to complete the HBF survey before sending copies of her bills. The buyer was sent a cheque for more than £1,000 after she completed the survey. The homebuyers spoken to by The Independent bought their properties at different Bovis developments between 2016 and 2018. The newspaper reported that one couple said their site manager offered them high street vouchers in return for positive feedback. "He said it was directly linked to his bonus so if we were happy with the sales process we should give him 5 stars and he could ‘make it worth our while'", they said. Four other homebuyers, who have spoken to The Independent on condition of anonymity, were allegedly offered bottles of champagne, chocolates or contributions towards remedial work if they agreed to complete the survey. Five of the nine homebuyers spoken to by The Independent say they were offered incentives after Bovis told its representatives to change the policy. HBF's national survey of housebuilders was launched in 2005 in response to recommendations in the Barker Review of Housing in 2004 and results determine a house builder's annual rating. Since 2013, ratings are based on just the one question: 'Would you recommend your builder to a friend?' In relation to the case in which £1,000 of a homebuyer’s bills had been paid, Bovis said it was investigating the claim that payment had been conditional on the customer completing her feedback form. A spokesman said: "On this point, we are currently investigating one claim made by a customer to The Independent, where it appears that our processes and procedures have not been followed and the colleague involved has been removed from site while we make further enquiries."

When new CEO Greg Fitzgerald took charge of Bovis – after the resignation of David Ritchie in January 2017 – he promised to ensure that the house builder was no longer "handing over crap or incomplete houses to customers". However, The Independent has been told by several homebuyers that problems with quality remain. One customer said that her hi-spec washing machine was broken on the day she moved into her property on a development in April 2017. When Bovis later replaced it, she claimed the whole house vibrated when was the washing machine was on. She told The Independent: "I am living in a Bovis nightmare. I wish I could walk away." Another, who bought their property in January 2017, said they had experienced problems immediately. But when they approached Bovis, the house builder allegedly told them the house being situated on a corner caused the issues. They told The Independent: "We raised the issue again with Bovis and yet again we were told every excuse possible." Buyers across the UK claim the house builder sells properties that are "not fit for purpose", with some residents reporting issues relating to insulation, flooding, structural issues and rendering. A number of disgruntled homeowners have reached settlements with Bovis, the terms of which are sometimes protected by non-disclosure agreements.

On 9 December 2017 The Guardian reported that Bovis faces a potential class-action lawsuit by the group which now has over 3000 members. ^[24]

References

External links

• Corporate site
• Customer site