Bellway confident despite fall in profit
Revenue fell by 30% and pre-tax profit by more than 50%, although the Newcastle-headquartered housebuilder said improved confidence had led to a strong year-end order book.
Reporting preliminary results for the financial year to 31 July 2024, Bellway said that housing completions had fallen year-on-year from 10,945 homes to 7,654, with a corresponding decline in revenue, from £3.4bn to £2.4bn.
Pre-tax profit fell by 62%, going from £483m in 2023 to £183.7m in 2024.
Chief executive Jason Honeyman said that the outlook had improved over the second half of the year, and described the group’s performance as “resilient”.
He said: “Bellway has delivered another resilient performance despite the challenging operating conditions during the year. While a lower order book at the beginning of the financial year drove the reduction in the number of housing completions, customer demand through the second half benefitted from a moderation in mortgage interest rates which has eased affordability pressures and supported an increase in reservations.
“The combination of these improving trading conditions and our strong outlet opening programme has generated a healthy increase in the year end order book. As a result, we are well-placed to deliver a material increase in volume output in financial year 2025.”
The housing market nationally has been in a troubled state, and as recently as August Bellway was close to taking over Crest Nicholson for around £720m, a deal it ultimately walked away from – albeit at a cost of £5m+.
Projects Bellway is advancing in the region include close to 600 homes at Stainton Vale Farm, Middlesbrough, and 135 homes at Easington Lane, south of Sunderland.
Honeyman also welcomed moves by the government to reinvigorate the market: “We welcome the new government’s plans to reform the planning system, which in time is expected to unlock land supply and support an increase in new housing across the country.
“Against this improving backdrop and if market conditions remain stable, our operational strength and robust balance sheet, combined with the depth and quality of our land bank, provide an excellent platform for Bellway to deliver strong multi-year growth and to continue creating long-term value for all our stakeholders.”
Bellway has an owned and controlled land bank of close to 49,000 plots. It opened around 80 new sales outlets at sites over the year, and expects a further 50 to come on-stream this year, with the average at any time expected to remain at around 245.
Overall, during the financial year 2024, the group contracted to purchase 4,621 owned and controlled plots – roughly in line with 2023’s 4,715 plots. These are across 27 sites, with a total contract value of £344.8m.
Bellway last week announced that in December, former Cairn Homes chief financial officer Shane Doherty will become its CFO, replacing group FD Keith Adey, who will step down from that role but remain on the board until March.