January 9, 2017 / 7:18 AM / 6 months ago

Bovis Homes chief executive pays price for profit warning

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A Bovis homes flag flies at a housing development near Bolton, northern England, July 9, 2008.Phil Noble

LONDON (Reuters) - Bovis Homes (BVS.L) said its chief executive David Ritchie had quit just days after the British housebuilder warned on profit because it failed to complete the number of homes it expected at the end of 2016.

Ritchie, who has been chief executive since 2008, will be replaced by Finance Director Earl Sibley on an interim basis while it seeks a permanent replacement.

The company had said on Dec. 28 that it would not hand over 180 largely built and sold private homes to buyers before the end of the year, resulting in a likely shortfall in full-year profit against market expectations.

The statement came on the first trading day after the Christmas break, adding to the element of surprise.

Shares in the FTSE 250-listed builder fell as much as 6 percent on the day of the profit warning, as analysts said the problem was self-inflicted rather than linked to demand.

The stock, which has been the worse performing British housebuilder since the June Brexit vote, rose 2 percent to trade at 827 pence at 1022 GMT on Monday. reut.rs/2i9O9Qp

The shares, however, are still 19 percent below the level they traded at before the referendum.

The British property market has been generally resilient since the EU vote, defying predictions from economists of a downturn, and the average price of the homes Bovis completed in 2016 was up about 10 percent on a year earlier.

Ritchie said the company had doubled in size and had delivered record profits under his tenure, but it was "now the right for someone new to lead the group into its next phase of development".

Broker Liberum, which rates Bovis a "hold", said: "Management change could be positive for the Group in due course if the building of homes can be improved, so that the Group can exploit a decent landbank more effectively."

(This story fixes grammar in headline.)

Reporting by Paul Sandle, Graphic by Alistair Smout; editing by Sarah Young/Keith Weir

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