Bellway revenues jump to £3.5bn as housebuilder shrugs off inflation

Bellway’s revenues jumped 13 per cent to £3.5billion in the year to 31 July as the housebuilder overcame surging cost pressures.

The figure is up from £3.1billion and £2.2billion in the previous two years respectively, reflecting 10.5 per cent growth in completions as Bellway achieved an annual record of 11,198 new homes.

Ahead of the publication of its preliminary results on 18 October, Bellway highlighted a ‘sizeable forward order book’, which rose 4.5 per cent annually to £2.1billion and 7,223 homes, putting the FTSE 250 builder on course for 12,200 new homes in 2023.

Bellway’s new homes went for an average selling price of £314,000 over the last year, up from £306,479 and £293,054 in 2021 and 2020, respectively. 

However, it expects this to fall over the next year to just over £300,000, as a result of changes to type and location of houses sold. The forecast comes at a time of concerns that the housing market may be cooling. 

Underlying operating margin grew to around 18.5 per cent, up from 17 per cent last year, which Bellway also attributed to improved site operating efficiency and completions from more recently acquired land.

The firm’s balance sheet weakened marginally from net cash of £330million last year to £245million, with Bellway having engaged in ‘further disciplined land investment to support growth plans’ after securing 19,089 plots.

While the firm said it continued to see strong demand across the country, it highlighted ‘upward pressure on build costs’ it expects to persist across the sector throughout the year.

It added: ‘Rising energy prices, global supply chain constraints and increasing wage costs [are] all contributing to the rise.

‘Strong commercial disciplines, forward buying and value engineering initiatives have helped to mitigate these upward cost pressures which overall have been offset by house price inflation.’

Bellway also said it expects to experience ‘ad hoc shortages at a regional level’ in certain materials.

Bellway shares were down 0.7 per cent in early trading to 2,324p, bringing 2022 losses to 31 per cent.

Chief executive Jason Honeyman said: ‘Bellway has delivered another strong performance, with volume output and housing revenue reaching record levels for the group.

‘This result has been achieved through our investment in land and the dedication of our colleagues, subcontractors and supply chain partners, against the backdrop of a challenging operating environment and macroeconomic uncertainty.

‘Looking ahead, our sizeable forward order book and continued strong investment in land puts the group in an excellent position to deliver another record year of volume output, notwithstanding the ongoing challenges in the planning system and upcoming end of the Help-to-Buy scheme.

‘In addition, a robust balance sheet continues to provide strategic flexibility and a platform for our long-term strategic priorities of volume growth and value creation.’