Bovis Homes ousts boss David Ritchie after latest profit blow for builderComments Off on Bovis Homes ousts boss David Ritchie after latest profit blow for builder
The boss of one of the UK’s biggest housebuilders, Bovis Homes, paid the price for a shock Christmas profit warning today after he was ousted by the board.
David Ritchie, who has led the £1.1 billion builder for eight years, is stepping down immediately as chief executive. He will stay with the company until the end of next month to help hand the business over to interim boss and current finance director Earl Sibley.
Doubts over Ritchie’s position are understood to have come to a head in recent days culminating in a board meeting at which he offered his resignation to chairman Ian Tyler, who accepted.
Ritchie, who earned £1.54 million in 2015, is understood to have received a payoff and has no other job to go to.
His abrupt departure comes against the backdrop of a housebuilding industry which has so far largely shrugged off the effects of last year’s Brexit vote and uncertainty around the 2015 general election.
But in a climate where the Government’s Help to Buy deposit scheme is also supporting buyers and mortgage rates are at record lows, Bovis has suffered its own issues.
In late December the firm warned of “slower than expected” production across its sites, resulting in the delayed sale of 180 largely built homes due to complete in 2016.
That followed problems in 2015 with planning delays to sites as well as rising subcontractor costs, which squeezed its margins.
Analysts also reported “cultural” issues within Bovis. Shore Capital’s Robin Hardy said: “We have long been concerned that there was something structurally wrong at Bovis and that — for reasons which were not wholly clear from the outside — Bovis was struggling to keep hold of key resources necessary to execute its growth plans.
“It has long been suspected there were cultural issues that ran right to the top of the organisation and that the business was less able to function freely and take best advantage of market conditions because of too much control.”
Ritchie said: “I believe now is the right time for someone new to lead the group into its next phase of development.”
Shares rose 16.5p to 827.5p.
The company’s history can be traced back to 1885 when Charles William Bovis founded a general building business. Bovis Homes was set up in 1965, becoming the UK’s second-largest housebuilder in the early Seventies before floating in 1997 and severing links with the old construction arm.
The firm, headquartered in Kent, has more than 1200 employees.