Bellway pre-tax profits rocket up to £140.9m

Housebuilder Bellway has reported another strong performance with pre-tax profits rocketing by a third to £140.9m for the year ended July 2013

A Bellway construction site worker
A Bellway construction site worker

Growing consumer confidence, more favourable mortgage conditions and a continued programme of site openings have contributed to another strong year from home builder, Bellway.

In preliminary results for the year ended July 31, 2013, the Seaton Burn-headquartered group reported a 33.8% rise in profit before tax, which jumped from £105.3m in 2012 to £140.9m. Gross profit also leapt 25.4%, operating profit 31.8% and revenue 10.6%, going from £1,004m to £1,110.7m.

Finance director Keith Adey: “We are really pleased with the results. It has been another strong year for us and it has enabled us to increase the total dividend for the year by 50% to 30p. We are also now well positioned for further growth in the year ahead.”

Bellway employs between 1,700 and 1,800 people throughout 15 UK sites. A statement accompanying the latest results said the company’s growth had been influenced by a mixture of increased consumer confidence and a significant improvement in trading conditions during the year.

This had been further stimulated by Government schemes in the form of NewBuy and Help to Buy, the latter of which had been used in 29% of reservations in the period since its launch up to July 31. During the year, 5,652 homes were sold compared to 5,226 in 2012, while the average selling price increased 3.4% from £186,648 to £193,025. The group also increased its land bank from 31,136 plots to 32,991 plots. It ended the financial year with net bank debt of £5.8m.

Chairman John Watson said: “This balance sheet strength, compounded by a limited exposure to historic shared equity schemes and a relatively insignificant pension deficit, ensures the group retains its ability to continue investing in land. This should support the further growth of the business, where favourable opportunities can be sourced by our land teams.”

The group, which has an order book of over £644m, has also opened two new divisions, in Manchester and the Thames Valley. Chief executive Ted Ayres said: “The investment in these new divisions has increased operational capacity to 7,500 homes and beyond per annum and this, together with the strong order book and growing customer demand, could enable the group to achieve volume growth of up to 15% in the current financial year.”

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