Bellway’s profit has risen by 10% as revenue hits £1.78bn.
The housebuilder’s pre-tax profit reached £307.6m for the six months to the end of January, up from £280m for the same period the previous year. Revenue, up from £1.72bn the previous year, was bolstered by a strong order book for 7,491 homes worth £2.2bn.
Bellway said it expected to increase volumes by 10% over the year, and was on target to build 12,200 homes next year. In October last year, the housebuilder said it would make £1.2bn in cumulative profit over the two years ending July 2023. Today, it said it was “making good progress towards exceeding this”.
The housebuilder added that it recognised the government’s “ambition” that builders paid for fire safety issues over an extended timespan of 30 years. A spokesperson said: “This is beyond the scope of our existing provision and, if agreed, it would require Bellway to extend the period covered by its assessment by a further 18 to 20 years and would result in a significant, additional provision.” So far the housebuilder has set aside £187m.
However, rising costs could present a challenge. Ross Hindle, senior analyst at Third Bridge said: “Bellway was able to leverage the favourable pricing environment to offset rising costs, boosting operating margins to 18.7%. However, as inflation fears continue to accumulate and the cost of living soars, there is unease around how long the house price party can last. We expect the market to cool off during the course of 2022 as interest rates and consumer confidence dampens.”
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
