Bellway's trading update revealed good underlying demand across the country, with a private reservation rate of 169 per week and “a front-footed, yet disciplined approach to land investment, with a record 19,819 plots (inc JVs) contracted in desirable locations, with a total contract value of £1,066.0 million.”
Jason Honeyman, Bellway CEO, said: "Bellway has delivered a strong performance, with volume output once again above 10,000 homes and housing revenue approaching 2019 levels. This positive recovery has been achieved through the hard work and dedication of our colleagues, subcontractors, and supply chain partners while maintaining the high quality of our product and making further improvements in the service we offer our customers.
“Going forward, we are in an excellent position to continue our long-term growth strategy. The group benefits from a substantial order book and a robust balance sheet. In addition, our record investment in land and the resultant strengthened land bank provides a strong platform for both volume growth and further margin recovery in the years ahead."
The firm said that house price inflation is generally offsetting build cost pressures. “There remain manageable short-term constraints in the supply chain and intermittent labour shortages across the sector as colleagues, subcontractors and suppliers are subject to self-isolation requirements to curtail the spread of Covid-19.”
Bellway’s overall average selling price rose by 4.4% to over £306,000. The firm said: “As previously guided, the average selling price is expected to moderate in the year ending 31 July 2022 to just over £290,000, with this a reflection of changes in product mix."
On building safety, Bellway says it continued to take a proactive and responsible approach to concerns about fire safety in high-rise buildings across the UK. Bellway recognises its responsibilities in its legacy apartment portfolio and continues to review combustion risks, in external wall systems, on past high-rise developments.
Bellway added: "We are working with building owners and warranty providers, who are undertaking their own investigative works, to determine whether the combination of materials used in the construction of whole wall systems adequately prevents the spread of fire.
“As a result of these ongoing reviews, and notwithstanding that all buildings obtained the required regulatory approvals at the time of construction, the board anticipates a further net legacy building safety expense in the second half of the financial year and will provide a further update with the release of the preliminary results.”
Bellway has already set aside £131.6 million since 2017 in relation to fire safety.
Looking ahead Bellway sees wider economic uncertainties because of Brexit and the continuing pandemic: “Notwithstanding these concerns, customer confidence is strong, and the success of the vaccination programme is having a positive impact on the UK's prospective economic performance. The long-term fundamentals remain strong.”
