Bellway: Revenue drops but housing market on the up
Housebuilder Bellway’s revenue has dipped by more than £1bn as “challenging operating conditions” have continued to hit the group.
The London-listed company, headquartered in Newcastle upon Tyne, brought in revenue of £2.3bn in the year ending July 30, 2024, down from just under £3.4bn in the 12 months before.
Revenue fell as the number of homes built and sold during in the period dropped from 7,654 compared to 10,945 in the year prior.
Its average selling price also declined from £310,306 to £308,000, although Bellway said this figure was “slightly ahead of guidance”.
Despite ongoing challenges in the construction sector, the group said it was starting to see improved customer confidence thanks to lower mortgage interest rates and an increase in wages, which had helped to bolster its forward order book by the end of the year.
By July 31, 2024, the forward order book stood at 5,144 homes compared with 4,411 in the year before, with a value of £1.4bn, up from £1.2bn in the 12 months prior.
Jason Honeyman, group chief executive, commented: “Bellway has delivered another resilient performance despite the continuation of challenging operating conditions during the year.
“This result has been achieved due to the dedication of our colleagues, subcontractors and supply chain partners.
“While a lower starting forward order book drove a reduction in volume output, customer demand during the year has benefited from a moderation in mortgage interest rates which has helped to ease affordability constraints and supported an increase in reservations.
“The improving trading backdrop, combined with the strength of our outlet opening programme, has generated healthy growth in the year-end order book.
“As a result, we are in a strong position to return to growth in financial year 2025, as previously guided.
Anthony Codling, the managing director of RBC Capital Markets, said these latest results from Bellway were encouraging, and added: “Bellway delivered a positive full-year trading update selling more homes at a slightly higher price than we had expected as falling mortgage rates, easing cost of living pressures and rising wages are encouraging households to buy homes.
“Not only did Bellway end its financial year well, but it started its next one firmly on the front foot with an orderbook up 16 per cent in terms of number of homes.
“With the Bellway engine firing on all cylinders, we question whether it needs to buy the misfiring Crest Nicholson – if it ain’t broke, don’t fix it.”