Pre-Close Trading Update

Bellway p.l.c. Pre-Close Trading Update Friday 8 August 2014 Bellway p.l.c. is today issuing a pre-close trading update for the year ended31 July 2014 ahead of its preliminary results announcement on Tuesday 14October 2014. Highlights * Significant volume growth with a 21.2% increase in the number of housing completions to 6,851 (2013 - 5,652). * Further increase in average selling price to c. £213,000 (2013 - £193,025) as a result of ongoing changes in product and geographic mix, together with pricing improvements. * Excellent forward sales position with a substantial 36% growth in the value of the forward order book to a new record of £924.3 million (2013 - £679.5 million). * Around £460 million expended on land and land creditors (2013 - £300 million), securing sites that meet or exceed the Group's minimum acquisition criteria. * Balance sheet strength maintained with net cash of £5 million (2013 - net bank debt of £5.8 million) thereby providing significant capacity for future investment. Ted Ayres, Chief Executive, commented: "The Group has reacted positively to the continued strength of the UK housingmarket, significantly increasing output to satisfy customer demand. Thefavourable trading environment, together with the Group's national presence andstrong balance sheet, ensures that Bellway is well positioned to continue itsgrowth strategy and this, together with a strong focus on return on capitalemployed, should lead to further enhancements to shareholder value." Market Conditions and Trading Customer demand has remained strong throughout the year, supported by animproving economic outlook and positive mortgage market conditions. Theannouncement in April 2014 that the Help to Buy shared equity loan scheme willbe extended to March 2020 should help sustain demand. This provides welcomesupport to purchasers, primarily first time buyers, wishing to access thehousing market with a 5% deposit. The Group has taken an average of 148 reservations per week (2013 - 128) duringthe financial year, an increase of 15.6% compared to last year. Trading isfollowing the traditional seasonal pattern, with a strong performance in springfollowed by a gradual slow down in the private reservation rate over the summermonths. The Mortgage Market Review (`MMR') and the recent announcement by the Bank ofEngland to restrict the availability of higher loan to income multiplemortgages should help ensure a long-term sustainable supply of mortgagefinance. There have been minor delays in processing some mortgage applicationsbut the MMR has not had a material effect on the reservation rate. Results The Group has responded positively to the strong market conditions, havingcompleted the sale of 6,851 homes (2013 - 5,652), an increase of 21.2% comparedwith last year. All geographic regions have performed well, particularly the London boroughs,where significant land investment over recent years has enabled the Group tocomplete the sale of 1,236 homes (2013 - 865). In addition, new divisions whichopened in Manchester and the Thames Valley on 1 August 2013 are gainingmomentum, having contributed 98 and 101 completions respectively. The average selling price of homes sold increased by some 10% to £213,000,primarily due to changes in product and geographic mix. The Group alsobenefited from some net pricing improvements as a result of a reduction in thecost of incentives, with the average selling price of private homes sold havingincreased by some 11% to £231,000 (2013 - £207,322). Furthermore, on certainnew, recently opened London sites, prices achieved have generally been inexcess of expectations at acquisition. The strong growth in both volume and average selling price has led to anoverall increase in housing revenue to around £1,460 million (2013 - £1,091million), a rise of over 33% and a new record for the Group. Land Buying and Financial Position The Group's land buying teams have continued to identify and acquire attractiveopportunities that meet or exceed minimum acquisition criteria in respect ofboth gross margin and return on capital employed. Whilst adopting this selective and disciplined approach, Bellway has spentaround £460 million on land and land creditors (2013 - £300 million), a recordfor the Group. The significant investment in land ensures that Bellway is wellpositioned to deliver further growth in volume, having secured all of its landrequirements for the year ahead. This robust position, together with a nationalpresence through its 15 operating divisions, ensures that Bellway can continueto be selective in its approach to land buying. The Group retains a strong balance sheet, having ended the year with net cashof £5 million (2013 - net bank debt of £5.8 million), thereby maintaining itsability to respond to future opportunities in the land market. Outlook The strength in demand has enabled the Group to increase the value of itsforward order book by 36% to £924.3 million at 31 July (2013 - £679.5 million),representing 4,363 plots (2013 - 3,525 plots). This record forward sales position, together with continuing consumer demandfor new homes, allows the Group to continue its strategy of sustainable volumegrowth at attractive rates of return, thereby resulting in further enhancementsto shareholder value. FOR FURTHER INFORMATION PLEASE CONTACT: TED AYRES, CHIEF EXECUTIVE AND KEITH ADEY, FINANCE DIRECTOR FROM 7:00 AMONWARDS ON 0191 217 0717. Certain statements in this announcement are forward-looking statements whichare based on Bellway p.l.c.'s expectations, intentions and projectionsregarding its future performance, anticipated events or trends and othermatters that are not historical facts. Such forward-looking statements can beidentified by the fact that they do not relate only to historical or currentfacts. Forward-looking statements sometimes use words such as `aim',`anticipate', `target', `expect', `estimate', `intend', `plan', `goal',`believe', or other words of similar meaning. These statements are notguarantees of future performance and are subject to known and unknown risks,uncertainties and other factors that could cause actual results to differmaterially from those expressed or implied by such forward-looking statements.Given these risks and uncertainties, prospective investors are cautioned not toplace undue reliance on forward-looking statements. Forward-looking statementsspeak only as of the date of such statements and, except as required byapplicable law, Bellway p.l.c. undertakes no obligation to update or revisepublicly any forward-looking statements, whether as a result of newinformation, future events or otherwise.