Bellway 'all but recovered from pandemic' as home reservations surge
Bellway’s order book has grown to record levels, but the number of houses built by the group remains shy of pre-pandemic levels.
In a trading update to investors, the group said it completed 10,138 homes in the 12 months to the end of July. That was more than a third higher than in the same period a year earlier as completions were hit by the first 2020 lockdown.
However, the levels are still below the 10,892 homes completed by the firm in the year ending July 2019.
The update showed both a recovery and a hangover from the pandemic. The 12-month period includes several lockdown months, so housing revenue is still 2.5 per cent lower than in 2019. Yet it soared by 41 per cent to more than £3.1 billion compared to 2020.
Sales are going strongly with Bellway’s order book reaching 7,082 homes, an all-time record, and more than 2,200 higher than in 2019.
Land prices were pushed down during long periods of the pandemic, opening up opportunities for companies like Bellway with the cash to spend.
In total, the business put a little under £1.1bn into acquiring nearly 20,000 land plots around the UK. This compared to a £778 million spend in the year ending July 2020, and some £788m a year earlier.
Chief executive Jason Honeyman 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.”
He added: “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.”
Mark Crouch, an analyst at investment platform eToro, noted: “Bellway has all but recovered from the pandemic, with many of its key financial indicators nearly at their pre-pandemic 2019 levels.
“Housing revenue and completions are just 2.5 per cent and 6.9 per cent, respectively, off where they were in 2019, in what has been dramatic return to near normality.
“However, the key figure in Bellway’s latest trading update is the fact buyers are reserving homes at a rate of 169 a week – 19.9 per cent higher than they were a year ago and 5.6 per cent higher than in 2019.
“That proves that, despite the tapering of the stamp duty holiday in July, property demand is still soaring, which should bolster the FTSE 250 builder’s balance sheet as we approach the end of the year.”
Numis analyst Chris Millington said: “Bellway has been one of the most prolific land investors in recent years and this stepped up post the first lockdown and should position the group well to recover strongly from the Covid hit.”
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