We regularly warn investors that growth for its own sake is not a valid corporate strategy so Bovis Homes’ (BVS) plan to dial back volumes to address customer service and construction issues should be applauded.

Under interim chief executive Earl Sibley the housebuilder is hitting the reset button after a self-acknowledged ‘difficult’ 2016 which led to the departure of his predecessor David Ritchie.

This makes sense but we have reservations over the investment case at the 756p. Conditions for the sector remain helpful at present but there’s no guarantee this will be the case when Bovis looks to return to the front foot in a year or so.

Its problems came to a head with a profit warning in December 2016. In January 2017 it was revealed the group was paying cash incentives to customers to complete on house purchases before the end of the year as the group scrambled to hit growth targets.

Many who accepted the incentives subsequently reported unfinished and defective homes. The company took a one-off charge of £7m alongside full year results (20 Feb) to compensate these customers.

More significant is reduced output guidance for 2017 and beyond. Jefferies cuts its 2017 volume estimate to the low end of this guidance – 15% below 2016 – and assumes a 4% increase in operating costs to £80m. Its pre-tax profit estimates fall by 37% in 2017 and by 29% in 2018.

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