Record revenues of £1.48bn for housebuilders Bellway

Newcastle housebuilders Bellway are toasting record revenues and profits, triggered by the strong customer demand

Bellway Homes, Jameson Fields development in Ponteland
Bellway Homes, Jameson Fields development in Ponteland

North East property developer Bellway expects to create scores of jobs in the coming year as it accelerates building plans to meet demand in a buoyant house buyers’ market.

The Newcastle-headquartered firm last year swelled its ranks by more than 10%, taking UK headcount to more than 2,000 employees.

As it strives to meet forward order book targets with value of £924.3m in its new financial year, finance director Keith Adey said further job creation is on the horizon.

“We’ve put in an extra £300m, which includes an extra £100m into the land bank, to try to meet demand. In the last year we increased the number of employees by 10 to 15% to around 2,000 across the UK and in the year coming that figure will go up by around 10% again to meet production targets.

“It’s difficult to give a figure because each division around the UK has its own production requirements so we don’t have a top-down plan, but I’m sure there will be an increase in numbers.”

The positive job news comes after the firm announced an “exceptional” trading period which has seen the firm deliver record revenue and profit, with turnover topping £1.48bn for the year ended July 2014.

Returning consumer confidence triggered huge growth in the number of homes sold by the business, from 5,652 to 6,851 – a rise of 21.2%.

Operating profit has also soared, by 69.5% from £151.1m to £256.1m.

The group’s owned and controlled land bank has risen to 35,434 plots in the period and the firm also has net cash of £5.1m – a reversal of the previous 12 months’ net bank debt of £5.8m, providing ample operational and balance sheet capacity for future growth.

Mr Adey said: “We’re really pleased with the results – we’ve taken the opportunity presented by the market to deliver volume growth of 21%.

“All in all it’s been a record year for us driven by market demand and our significant investments in land.”

“Going forward, how long will this continue? I don’t think we can expect a similar rate of growth in the new financial year but where we see opportunities that tick all the right boxes we will invest in land. We think we’ll see growth of around 10% in this financial year.”

Mr Adey said Bellway’s strong presence in the North East, where it employs 50 in its offices and a further 400 to 500 in direct labour, has driven strong performance over the year, selling more than 700 homes and bucking national trends which has seen higher sales volumes in London and the South East compared to the regions.

He said: “The North East is a very strong division, partly because our roots are there and because we have a well-established presence. People know and trust the name so for us it’s one of the best performing areas.

“We sold more than 700 homes from the Team Valley operation and it’s up there with the south, which is out of kilter with national trends.”

The strong figures have led to the firm increasing the total proposed dividend by 73.3%, from 30p per share to 52p, which is also a new record.

Chairman John Watson added: “Bellway has an unbroken record of paying a dividend every year, including throughout the downturn, thereby providing certainty of return to shareholders.

“The proposed final dividend will mean that the Group has returned over £220m to shareholders since July 2007.

“The group’s dividend policy, whilst providing certainty of return, also ensures that sufficient cash can be re-invested in land and work in progress in order to deliver further, sustainable growth.

“This approach enables Bellway to remain flexible, with the ability to respond to growth opportunities or changes in market conditions as they arise.”

Bellway’s buoyant year comes after Durham-based Esh Group, which develops commercial and residential properties, also announced 10% turnover growth to £192.5m.

Heavy investments in land also triggered a strong set of finals results for housebuilder Barratt Developments, which recorded a 103% rise in pre-tax profits to £390.6m for the year ended June 30 2014.

Meanwhile, latest accounts for Newcastle-headquartered estate agents Your Move show a doubling in operating profit in 2013 to £4.9m.

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