Troubled housebuilder Bovis Homes will pay customers compensation of £7 million and slash construction targets by 10% to 15% after what directors described as a “difficult year”.

The company revealed a 3% fall in pre-tax profits to £154.7 million in its annual results, well below revised predictions, as it tries to “reset the business” after cutting financial expections and losing its chief executive.

In December it surprised investors with a warning that it had “deferred” the completion of 180 homes until the early part of 2017.

The New Ash Green-based firm said shifting the sales to the new year would reduce pre-tax profits for 2016 to between £160 million to £170 million compared to analysts predictions of £183 million.

Less than a fortnight later, its chief executive of eight years David Ritchie announced he was quitting after 18 years with the business. He was replaced by finance director Earl Sibley.

In its results today, it showed revenues increased 11% to more than £1 billion with its average sale prices up 10% to £254,900.

However, it said it would slow its rate of house building “to support our priority focus on customer service” having come under fire from customers for missing deadlines and paying some to move into incomplete homes.

A Facebook group named Bovis Homes Victim Group has more than 1,400 members and has discussed holding a protest outside the company’s Kent headquarters or during its AGM in Tunbridge Wells in May.

The firm, which mainly builds homes across the South East, said weaknesses in its production process and “a high level of customer service issues” would lead to a one-off £7 million payment on its annual results for “customer care provision”.

Chairman Ian Tyler said: “The process of transformation is already underway 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.

“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.”

Interim chief executive Earl Sibley said: “We have a clear set of operational priorities for 2017 and are fully committed to improving our levels of customer service and delivering high quality homes this year and in the future.

“The fundamentals of the business remain strong with a robust financial position and high quality land bank.”