11th Aug 2020 09:47
(Alliance News) - Bellway PLC on Tuesday said housing completions were down sharply in its most recent financial year due to the Covid-19 lockdown but customer interest is on the rise and its forward order book is strong.
The Newcastle-based residential property developer reported a 31% drop in housing completions in its financial year ended July 31 to 7,522 from 10,892 the year before. This was "a result of temporary groupwide site closures during the 'lockdown' period."
Bellway explained that reservation from August 2019 until the lockdown announcement in March averaged 211 per week, up 5% from a year before, but the reservation rate "rapidly declined" in the lockdown when the company's sales presence was limited to telephone and online interactions only.
However, customer interest is recovering now, with recent private reservations at 140 per week throughout July compared to 162 per week in July 2019. Demand has been supported by the UK government's Help-to-Buy scheme and the temporary stamp duty holiday.
Bellway's forward order book comprises 6,588 homes with a value of GBP1.76 billion, up from 4,878 homes at a value of GBP1.22 billion.
The company's balance sheet has net cash of GBP1 million, compared to GBP201,2 million a year before, as well as committed bank facilities of GBP545 million.
Land creditors have stayed low at around GBP345 million from GBP297.9 million year-on-year.
Bellway said its board is "keen to resume dividend payments as soon as there is more certainty with regards to the economic outlook" but will not be paying an interim dividend, having deferred the interim dividend decision in March.
Chief Executive Jason Honeyman said: "Our attention now turns to the trading year ahead. Whilst the economic outlook is uncertain, sales demand is encouraging, and the group has built a strong forward sales position. With our resilient balance sheet, we will proceed cautiously along the road to recovery, determined to return the group to its strategy of delivering long-term and sustainable growth."
Bellway will issue its annual results on October 20.
Shares in Bellway were down 0.7% at 2,548.00 pence in London on Tuesday morning.
By Anna Farley; [email protected]
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