Having taken a plunge many house builders are now possibly on the up again.

Speculative interest in BKG acquiring Bovis:

Shore Capital comment:
· Why buy a business in this cycle? – there is little obvious appeal to buying another quoted house builder in this cycle primarily because there is too much land available in the open market. This means that a house builder can buy sites only where it wants to build and that it feels sit well with its brand. The changes to the planning regime under the NPPF means that there are more than 500,000 more plots of land available today than would have been in a previous cycle. New land can be bought at historically low prices and there is ample opportunity to defer payment using land creditors. None of that is possible if buying another business.
· Fighting the damage already done – Bovis has had a tough time recently in the media and could have material reputational damage that could become an albatross around the neck of any bidder.
· Relationships – there appear to be deep rooted problems with sub-contractors that have been pivotal in Bovis being unable to manage build costs or deliver expected unit sales, the reason for the December profit warning. The problem with sub-contrators may also extend to professional posts across the group. If there are fractured relationships, these would be inherited by any buyer and could take a long time to unwind.

Bovis profits fall after difficult year

StockMarketWire.com

Bovis Homes posts a pre-tax profits of �154.7m for the year to the end of December - down from �160.1m last time.

Bovis said it was a difficult year for the group following a period of ambitious growth and weaknesses in its production process and a high level of customer service issues led to a one-off �7m customer care provision.

Revenues rose by 11% to �1,054.8m and the dividend of 45.0p per share is up 13%.

The group said it has embarked on a programme to deliver significant and urgent improvement in underlying processes across the business, focused on the delivery of the highest quality of product and service to customers.

The group says it aims to return to being a top quartile industry performer in customer service, product quality and production efficiency.

Chairman Ian Tyler said: "Despite the difficulties of 2016, the board remains confident in the group's abilities to deliver improved returns to shareholders.

"The process of transformation is already under way under Earl Sibley's interim leadership and I am confident the plans in place will address the operational weaknesses we have seen in our business, and focus us once again on delivering high quality product and service to our customers.

"Further, we are undertaking a strategic and structural review of the business to ensure we meet our commitment to deliver the highest possible returns from our valuable land assets."







Story provided by StockMarketWire.com

hammered on vile results and forecast
i've got them in my sipp and now have to decide whether to ditch or hang on in the hope that they become a target

The rush to get homes on the market has led to shoddy workmanship. Cheaper to spend a few extra days making good. Costs less in the long run.

Manuel,

It depends on how long you expect to live for.

I would think and hope for an early slight rebound.

---

I have the misfortune of holding IRV as well.

C'est la vie.

quite so :-)
balanced out in that sector by TW. and RMV

Peel Hunt comment today:
"Full-year results. Full-year PBT of c£155m missed the revised guidance of £160m-170m and compares with £160m in 2015. Operating margins slip 210bp to 15.2%, leaving them 350bp behind the sector average. Revenue was slightly better than expected at £1,055m, although the volumes and ASP were only marginally better, indicating higher other sales than expected. The dividend has been increased 13% to 45p (vs 44p est)
Balance sheet and land bank. The group finished the year with net cash of £39m vs our estimate of £18m. However, the land held in the land bank shrunk by 6% to 18,700, well short of our estimate of over 21,000. The land bank has now shrunk to 4.7 years from 5.0 years and compares with the sector average of over 5.2. On top of this, the group has c25,500 strategic plots.
Outlook and forecasts. Guidance for 2017 has been cut hard with volumes now expected to be 10-15% below this year's level (which implies a 15-20% reduction on our estimates) as the business sorts itself out. We struggle to see how margins can move forward, whilst this process of rectifying the problems is going on, which means PBT forecasts are likely to come back 15-20%. Management has committed to paying the same level of dividend (45p) in 2017.
Performance and valuation. Until today, the shares hadn’t performed that badly vs the sector due to bid speculation offsetting the profit warnings. In our view, the likelihood of the company being bought by any other industry players looks remote giving 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 CEO will be to lead this charge, we see no need to get involved especially given the wide choice of other attractive housebuilders.

Manuel.

I am lucky sometimes and hold TW and CRST RDW and a few other "builders".

CRST is interesting with nice forecast yield.

Must remember to inflate my life buoy.

Sorry for anyone in this. I have CTO, NMD, TW. and PSN in this sector and really don't want any more as I'm very overweight.

I think there's money to be made here at the right price. I'll do some math and share my views over the next few days

Bovis to pay £7m to compensate customers for poorly built homes.

SP drops roughly 10% as builder talks about slower buidling speeds so as to to improve quality.

Beaufort Securities today reaffirms its buy investment rating on Bovis Homes Group PLC (LON:BVS) and cut its price target to 840p (from 925p).

Brave call from Beaufort.

This company are going to have trouble selling at the fantasy prices after this faux pas.

Pictures don't look good.

:)

That 'half a sleep' fish looks as though it's just about to take a juicy morsel.

:-)

The Pru go above their 5% on the dip.

Buy on the bad News / Dips....still a good dividend...Sector is rising, Houses still in demand....keep buying a few & average out.....Management certainly tightening their belts.....looks a fair punt to me & with a possible "take-over"

expect a decent jump in sp in the morning with Redrow now being firmly in the picture - see ST front page biz section
Berkeley Homes were approached to make an offer several weeks ago

one way or another, it looks that BVS's days as a separate entity are numbered ..... phew, puffs my sipp holding :-)

BBC Business News reports thar Redrow rejected out of hand, Galliford Tty also rejected but talks will continue

rejection is expected, but that now looks like 3 are in the ring and i'ld be surprised if BVS have either the firepower or the support of their institutional investors to stay independent