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Sun August 14 2022

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Bellway sounds warning on cost pressures

15 Oct 13 House-builder Bellway saw its pre-tax profits rise a third last year on a 10.6% rise in revenue.

It was the company’s fourth consecutive year of earnings growth.

However, there was a warning sounded about the availability and price of materials and labour.

For the year to 31 July 2013, Bellway made £140.9m pre-tax profit (2012: £105.3m. Revenue was £1,110.7m (2012: £1,004.2m).

Like other major house-builders, Bellway credited the government’s Help to Buy scheme for stimulating sales and helping to promote consumer confidence. There were 5,652 homes sold during the year, up 8.2% on the 5,226 of the previous year.

Since 31 July, reservations have remained ahead of last year and demand remains strong in most areas of the country, the company said.

In August Bellway opened new divisions in Manchester and in the Thames Valley.  This increased operational capacity, coupled with a £644m order book (up from £438m this time last year), indicates even faster growth is to come in the year ahead.

Chief executive Ted Ayres said that Bellway had managed to control its construction costs so far as supply chain contracts are fixed in advance for 12 months or more. However, as these come to an end, that picture was now changing.

“We have encountered some material and subcontractor labour shortages in recent months and as volumes continue to grow in the industry, the group's procurement teams will face inevitable cost pressures,” he said. “We will continue to work closely with the existing supplier and subcontractor base to minimise any cost increases. “

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