Housebuilder Bellway reported a jump in full-year profit on Tuesday amid record revenues and completions, but cautioned that demand was moderating.
In the year to 31 July, underlying pre-tax profit rose 22.5% to £650.4m, with revenue up 12% to a record £3.54bn and housing completions 10.5% higher at a record 11,198 homes – ahead of the group’s target. Bellway cited strong underlying demand, with a 6.9% increase in the overall reservation rate to 218 per week.
On a reported basis, however, pre-tax profit was down 36.5% in the year to £304.2m, as the net legacy building safety expense surged 568.3% to £346.2m.
Bellway said customer demand was supported by low unemployment, and welcomed the recent positive changes to stamp duty thresholds, which it said will help customers saving to buy a new home.
The company did also warn, however, that elevated demand since the start of the pandemic has moderated. In the nine weeks since 1 August, weekly reservations were 191 per week, down 12.4% from the same period a year earlier.
Chief executive Jason Honeyman said: “Bellway has delivered another strong performance. Our strengthened land bank and resilient balance sheet provide a platform for long-term growth and, importantly, during a period of economic uncertainty, they enable the group to take a more cautious approach to land investment in the year ahead.
“Our long-term model is our strength and is supported by an underlying demand for new homes. Bellway’s growth will continue to be disciplined as we maintain a clear focus on the high standard of our product, margin, quality of profit and value creation.”
