House builder Bellway has boosted turnover and profit in its latest results – but is worried that confidence among home buyers has “ebbed away” over the summer.
The group's turnover grew by 12.4% from £683.8m to £768.3m in the year to 31 July 2010.
It posted a profit before tax of £44.4m compared to a loss of £36.6m last year. The 2009 result was hit by a £66.3m write down.
Bellway has net cash of £66m despite spending £208m on land during the year.
It sold 4,595 homes, an increase of almost 5% over last year, at an average selling price of £163,175, an increase of almost 6%.
Margin has been boosted by a change in product mix and driving down supplier costs.
During the downturn, the group made a conscious decision to move away from apartments and town houses to two-storey family housing. As a consequence, homes sold for over £250,000 have, for the first time, accounted for more than 10% of output.
Reductions in build costs have been achieved in plastering, foundations, plus road and sewer works, though Bellway said some materials, mainly timber and steel, have increased in price. The house builder said it delivered cost savings of around £2,400 per unit on sites that had been redesigned.
Chairman Howard Dawe said: “Bellway has seen reservations in 2010 return to a more normal selling pattern with a strong spring selling season. However, following the change of government in May and the emergency budget in June, buyer confidence slowly ebbed away during the summer as increasing media coverage was given to the new policies of the coalition Government to tackle the deficit.
“Sales in the early part of what is traditionally an active autumn selling period have picked up, albeit only slightly, following the usual summer lull and it seems that potential homebuyers are awaiting the outcome of the Comprehensive Spending Review.
“Whilst the board's desire to increase volumes annually remains, it is ever mindful of past experiences, however, the Group currently has a strong land bank, a forward order book of £397m and with £59m of net cash, the capacity to grow the business should market conditions allow.
“The board therefore remains confident as to the Group's ability to respond effectively to whatever market conditions prevail over the coming months.”