Strong demand helps Bellway build its profits

Construction: Housebuilder posts record sales, profits and margin as it is helped by the continued low interest rate and Government’s Help to Buy scheme

Strong demand, low interest rates and the Government’s Help to Buy scheme has helped major housebuilder Bellway achieve record results this year.

The builder’s revenue, profit and margin all reached record highs for the year ending July 31.

Bellway is investing millions into a development at Charlotte Gate in Perth and also has interests in Fife.

Revenues increased by 14% to £2.6 billion in a year where it completed 9,644 homes. Pre-tax profit increased from £498 million to £561m.

Executive chairman John Watson said: “The parameters supporting growth are strong as there continues to be an imbalance between the supply and demand for high quality new homes.

“Interest rates are low, with the Bank of England base rate reducing to 0.25% at the start of the year, ensuring that financing a new home remains affordable.

“The availability of sustainable mortgage finance is also good, supported by a responsible lending environment and the Government’s Help to Buy scheme.”

The average sale price increased by 3% to £260,354 during the year.

The company invested heavily in land during the year, entering into land contracts worth £767m to acquire 11,613 plots across 97 sites.

Bellway has a stock of 37,855 plots, which represents a notional land supply of 3.9 years.

The company employed an average 2,544 staff during the year, an increase of 7.5% and created a set of structured apprenticeship programmes which will launch this year to address a skills shortage in the sector.

The group entered the current financial year with an order book of 4,749 homes with a value of £1.3bn.

Chief operating officer Jason Honeyman said: “This strong forward sales position, together with investment in land and work in progress and plans to open a new, 20th trading division in the north of the country this financial year, should enable Bellway to deliver further growth in volume in the year ahead.

“The board therefore expects that subject to market conditions, the group will grow volume by at least 5 per cent and complete the sale of around an additional 500 homes, equivalent to the output of an established operating division.”

Shares in the company yesterday rose 60.28 to close at 3,563.28.

rmclaren@thecourier.co.uk

Picture: Steven Brown.