Bellway takes £20m cladding charge as house sales touch record high
The group said the extra £20.3m set aside brings its total since 2017 for fire safety in the wake of the Grenfell Tower tragedy to £131.6m.
It came as Bellway completed a record 5,656 homes in the first half and now expects to deliver around 100,000 for the full year, helping drive interim revenues up 11.6 per cent to an all time high of £1.7 billion.
The group reported a 4 per cent fall in pre-tax profits to £280.2m for the six months to January 31, though earnings edged 0.2 per cent higher at £297.7m.
It resumed dividends to shareholders with a 35p a share interim payout and hailed “strong” underlying homebuyer demand.
The company said the cladding charges are a “substantial sum which demonstrates Bellway’s responsible approach to supporting customers with regards to this issue”.
It added: “The legal responsibility for ensuring fire safety in buildings usually rests with the current owners or their managing agents, which in most cases for our legacy portfolio is not Bellway.
“As a responsible developer however, Bellway takes apartment safety concerns seriously and has therefore established a fire remediation team to work with building owners to help resolve historical issues.”
Bellway’s cladding charges follow a raft from other housebuilders in recent weeks as the cost of the works ramps up.
The group’s results show house prices rose 5.8 per cent on average to £303,206 in its first half.
Its forward order book stood at 6,028 homes worth £1.6bn on March 14, up 8.4 per cent on a year earlier.
Bellway said in light of its order book, it now expects full-year average selling prices to be more than £295,000.
The housebuilding sector has been boosted by a raft of government incentives, such as Help to Buy and most recently the stamp duty holiday to help the market during the pandemic.
Richard Hunter, head of markets at Interactive Investor, noted: “Bellway has continued to reap the rewards of careful management and a generally supportive housing market.
“Of late, further certainty has come from the UK government in the form of 95 per cent backed mortgages and an extension to the stamp duty holiday. Alongside the existing Help to Buy scheme, an ongoing shortage of housing supply and a low interest rate environment, housebuilders are being swept along by these tailwinds.”
Adam Vettese, an analyst at investment platform eToro, said: “Bellway and other housebuilders are riding the crest of a wave at the moment, with demand for housing strong and expected to remain that way due to further government intervention in the housing market.
“However, while demand for housing remains strong, it’s not all sunlit uplands for housebuilders. Long-term demand will depend on how the economy recovers and how household finances react when government support is withdrawn.”
Meanwhile, Bellway Homes (Scotland East) is celebrating after the company retained its five-star status with the Home Builders Federation for the fifth successive year.
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