Results round-up: Hammerson, Bovis Homes, BGEO Group

Retail property group Hammerson said full year pre-tax profits slumped by more than half to £322.8m from £731.6m as it booked a £24m revaluation loss on properties compared with a £245m gain a year earlier.

Net revaluation losses on the group's shopping centres and retail parks were £13.4m compared with a net gain of £367.5 million in 2015. Basic earnings per share fell to 40.2p from 92.8p.

In the UK, shopping centre values fell by £6m and retail parks by £118m, with £39m of this adverse movement due to the increase in stamp duty land tax in April 2016

Despite the fall in profits, the final dividend was lifted 8.6% to 13.9p a share.

Hammerson said the retail market was "polarising" with the growth in online shopping, adding that international tourists arriving with specific plans to shop were increasing.

"The key trend is the growth of multichannel retail which leads retailers to use both physical space and online platforms together to drive sales. As a result, the experience of the retail journey and the convenience of shopping for goods are more important than ever," it said.

Despite the fall in profits, the final dividend was lifted 8.6% to 13.9p a share.

Bovis Homes

Housebuilder Bovis Homes reported a 3% drop in pre-tax profit as the company was forced to compensate customers for poorly built homes, and said it had begun a strategic review.

Pre-tax profit fell to £154.7m from £160.1m, missing analysts’ expectations of £170m and the company’s guidance of between £160m and £170m.

Bovis said weaknesses in its production process and a high level of customer service issues led to a one-off £7m customer care provision.

The company said customer service standards "fell significantly" in 2016 and homes were completed, in particular at the year end, "which fell materially short of the high standard expected". Bovis said it has a customer service task force in place to address these issues and the customer care provision will cover the cost of the required remedial work and appropriate compensation for affected customers.

Meanwhile, revenue rose 11% to £1.05bn, while legal completions nudged up 1% to 3,977 and the company declared a dividend per share of 45p, up from 40p in 2015.

Bovis said it is focused on making 2017 the year when it re-sets the business and delivers on its operational priorities. As a result, it is slowing its rate of production and targeting completion volumes for 2017 to be around 10% to 15% below the 2016 level, before a return to normal industry production levels.

The average selling price is expected to increase again, reflecting the mix coming through the company’s landbank and Bovis said it continues to see market inflation impacting both the cost of subcontract labour and material supplies.

BGEO Group

BGEO Group, the Georgian banking and healthcare group, revealed 2016 profits and earnings rose strongly even though they were held back by a decline in the fourth-quarter.

Results were affected by a 10.5% devaluation of the Georgian Lari compared to the US dollar over the year, particularly in the fourth quarter of the year when it devalued by over 13%.

But the Georgian parliament has approved a change in the corporate taxation model, with changes applicable from 1 January 2017, apart from certain financial institutions, which Bgeo has recognised as a GEL 63.8m income tax benefit for the group.

Profit for the final three months of the year, the group generated revenue of 305.5m Georgian lari (£93m), up 13.3% on the third quarter, but that post-tax profit of GEL88.7m fell 7.2% year-on-year and 37.3% quarter-on-quarter.

The FTSE 250-listed group said this decline reflected the absence of some net positive one-off benefits in the

third quarter and a higher cost of credit risk as a result of additional impairment provisioning following the Lari devaluation.

Despite this, for the full year group revenue increased 17.8% to GEL 1.01bn, profits were up 37.8% to GEL 428.6m, and earnings per share increased by 31.3% to GEL 10.41.

A number of other one-off items affected the annual numbers, including gains from sale of shares, negative goodwill and accounting charges, which together with the tax changes, resulted in a net benefit of GEL 60.5mln in 2016.

On the banking side, the loan book increased 25%, driven by very strong growth from retail banking, and the profit from the bank was GEL309m.

The investment business generated a stronger than expected profit of GEL88m.