Wednesday, 23 July 2014

House builder reports leap in profits

Bellway has today reported a 52 per cent increase in pre-tax profit and higher turnover.

The house builder, in its results for the year to 31 July, reported profit before tax of £67.2 million, up from £44.4 million the previous year.

Turnover increased from £768.3 million to £886.1 million and completed sales rose by 327 homes, while the company’s operating margin rose from 6.7 to 8.5 per cent.

The company’s average selling price for properties also rose to £175,613 from £163,175.

Bellway increased its landbank by 5,406 plots, spending £250 million on land. It now owns 18,086 plots with planning permission.

The group has increased its sales outlets from 185 to 205 and is pursuing a strategy of increasing its landbank further and opening more sales outlets to aid growth.

Howard Dawe, chairman of Bellway, said: ‘Bellway aims to continue to increase both volumes and average selling prices, the latter by way of ongoing changes in the product mix. 

‘This, combined with the improvement in the operating margin, should ensure that shareholder value continues to be enhanced.’

Readers' comments (5)

  • F451

    That should all help affordability - well for the shareholders at least.

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  • Jon

    "It now owns 18,086 plots with planning permission."

    Thats the problem, these big companies should have a limited land bank so its more affordable for self builders!!

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  • Jon - Bellway tend to only involve themselves in large plots, they're not in competition with self builders.

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  • HalfCutHero

    ‘Bellway aims to continue to increase both volumes and average selling prices, the latter by way of ongoing changes in the product mix'

    Fantastic news! Add a few £k to that deposit, prospective house-buyer, we're putting up the price (read profit).

    As for 'unaffordability', why does no-one question what landbanking is doing to average house-prices? Surely the lack of affordability is directly linked to ever increasing landbanks.

    Pfft, another market failure.

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  • Running a housebuilding company without a landbank would be like trying to run a supermarket without any stores.

    As Bellway completed nearly 5,000 homes this year that landbank will only provide 3.5 years production, less than this if the newbuild market improved.

    Given the continued uncertainty with the Planning System a landbank of this size is probably essential.

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