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Sun November 17 2019

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Bellway reports rises in revenue and profits

15 Oct House-builder Bellway's preliminary results for the year to the end of July show 8.6% growth in revenue and a 3.4% rise in operating profit, though its margins are now dropping.

The development at Nine Elms in Battersea has an average selling price of £820,467
The development at Nine Elms in Battersea has an average selling price of £820,467

The number of homes completed was a company record of 10,892, up 5.7% on last year's 10,307.

Revenue was £3,213.2m, representing a rise of 8.6% from last year's £2,957.7m.

Profit before taxation rose by 3.4% to £662.6m. The operating margin was 21%, which the company described as continuing to moderate towards a more normal level from last year's 22.1%.

The group's flagship, high-gross-margin development at Nine Elms in Battersea contributed 214 completions (2018 - 132), at an average selling price of £820,467 (2018 - £705,567).  The company said that, notwithstanding the reducing proportion of revenue generated in London, the group should achieve an average selling price in the year ahead in excess of £285,000 (2019 - £291,968).

Elsewhere, the company is seeking to cut costs, including through last year’s introduction of the 'Artisan Collection'. The range of 43 standard house types is designed for ready compliance with local authority planning requirements and to reduce costs through standardisation. The 'Artisan Collection' is currently planned for about 12,000 plots at 97 developments, with the first completion due later this month at Kings Norton, Birmingham.

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Chairman Paul Hampden Smith said: "The Group, now comprising 22 operating divisions, delivered another positive set of results, consistent with its long-term growth strategy and in doing so, achieved record volume, revenue and profit.  In this tenth consecutive year of volume growth, Bellway completed the sale of 10,892 homes (2018 - 10,307), thereby making another substantial contribution to addressing the housing shortage in the UK."

He added that the ongoing imbalance between supply and demand for affordably priced, good quality housing remains across many parts of the country. Strong demand for new homes has continued to be supported by the ongoing availability of Help to Buy, together with an environment of low interest rates, he said.

"The land market remains attractive and the planning environment favourable, he added. "Whilst a shortage of skilled labour remains a challenge for the wider construction sector, this did not prevent Bellway from delivering a record number of new homes in the year.

"Bellway continues to draw upon these favourable market conditions, retaining its clear strategy to deliver long term and disciplined volume growth.  This, together with the continued focus on quality and customer care, enables all stakeholders to benefit from our continued success."

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