Bellway takes cost pressures in stride as revenue hits £3.5bn

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HOMEBUILDER Bellway reported a record year for home completions, sales prices and revenues amid strong demand “against the backdrop of a challenging operating environment and macroeconomic uncertainty.”

But the builder, which unveiled a 13% rise in revenue to £3.5billion and a 10.5% growth in completions to 11,198 in the financial year to the end of July, above of his target of 11,100 homes, said he expected his average sale price to fall to just over £300,000 in the year to the end of July next year , reflecting “expected changes in geographic and product mix.”

In a business update ahead of the announcement of its preliminary results on October 18, the Newcastle-based company, which has extensive developments across Glasgow and the west of Scotland, Edinburgh and the east and Fife, said predicts a strong 2023 despite the cost of living. crisis as rising property prices offset skyrocketing energy and building costs.

One of Britain’s biggest homebuilders, it has confirmed it has committed to acquiring 19,089 plots in 2022 across 107 sites.

Bellway Chief Executive Jason Honeyman said: “Bellway delivered another strong performance, with volume production and housing income reaching record highs for the group amid challenging operating conditions and macroeconomic uncertainty. .

Mr. Honeyman noted that “Bellway’s strong forward order book and continued significant land investments position the group in an excellent position to deliver another record year of volume production, despite the current challenges in the system. plan and the upcoming end of the purchase assistance scheme”.

“A strong balance sheet continues to provide strategic flexibility and a platform for our long-term strategic priorities of volume growth and value creation,” he added.

The builder said it has an order book comprising 7,223 homes (7,082 in 2021) worth £2,114.3 million.

“This underpins our previously announced ambition to deliver annual production of approximately 12,200 homes for the year ending July 31, 2023, representing volume growth of approximately 20% over a two-year period.” , he noted.

Underlying operating margin for 2022 is expected to be approximately 18.5%, compared to 17% in 2020, driven by improved operating efficiencies and deliveries of more recently acquired land.

Bellway said: “Strong business disciplines, forward buying and value engineering initiatives have helped to alleviate these upward cost pressures which overall have been offset by price inflation. real estate.”

He said he continues to “focus on acquiring land in desirable, high-demand locations where the product is affordable within the context of localized market conditions.”

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