Trading Update

Bellway p.l.c. Trading Update Tuesday 10 February 2015 Bellway p.l.c. is today issuing a trading update for the six months ended 31January 2015 ahead of its interim results announcement on Wednesday 25 March2015. Highlights - Further volume growth with a 15.7% increase in the number of housing completions to 3,754 (2014 - 3,245). - Strong forward sales position with growth of 24.5% in the value of the forward order book to £975 million (2014 - £783 million). - Operating margin expected to approach 20% for the period ended 31 January 2015 (2014 - 15.6%). - Significant investment in land with around £355 million expended on land and land creditors (2014 - £240 million). - Plans to open a sixteenth operating division in the current financial year. Ted Ayres, Chief Executive, commented: "The Group's strategy of delivering volume growth, with a strong focus onreturn on capital employed has resulted in a further significant rise inprofitability. With advanced plans to open a sixteenth division in the secondhalf of the financial year, Bellway is well positioned to deliver furtherearnings growth." Market conditions and trading Market conditions remain favourable with continued demand for new homes acrossthe country. Accordingly, the Group has taken an average of 139 reservationsper week (2014 - 137 per week), a slight increase compared with the same periodlast year. As expected, the rate of private reservations has slowed comparedwith the first half of the previous financial year, which benefited fromparticularly strong sales demand due to the initial surge in activity followingthe introduction of Help to Buy. Results The Group has completed the sale of 3,754 homes (2014 - 3,245 homes), anincrease of 15.7% compared with the same period last year. As previouslyreported, the Board expects that the rate of volume growth will be more heavilyweighted to the first half of the current financial year. The growth in volume in the north of the country was particularly strong, withthe Group completing the sale of 1,822 homes (2014 - 1,474 homes) across itsseven northern divisions. This represents an increase of 23.6% compared tolast year, with significant land investment resulting in a strong performancein Scotland and the North East, where our divisions completed the sale of 327and 431 homes respectively. The Group's southern divisions also performed well, completing the sale of1,932 homes (2014 - 1,771), a rise of 9.1% compared with last year and demandfor our homes in London remains strong. The average selling price of homes sold has risen by 3% to around £219,000(2014 - £212,071) and the average selling price of private homes sold has risenby 7% to around £240,000. The improvement has been driven by the strongpricing environment and greater investment in primary locations over recentyears. Whilst the pricing environment remains favourable, the rate of houseprice growth has moderated, particularly in and around London, resulting inonly modest but sustainable pricing improvements on certain sites. Housing revenue has risen by approximately 19% to over £820 million (2014 - £688.2 million) and the operating margin for the first half of the year isexpected to approach 20% (2014 - 15.6%). Land buying and financial position The Group continues to identify attractive land opportunities, having spentaround £355 million on land and land creditors (2014 - £240 million). Recentland acquisitions at Kempshott Park in Basingstoke, Stokesley Road inGuisborough and Kings Hill in West Malling are all expected to be released forsale in the next 12 months. The Group's ability to continue investing in highquality development opportunities such as these should help to ensure thatBellway is well placed to continue delivering attractive rates of return in theyears ahead. Notwithstanding this significant investment in land, the Group ended the periodwith modest net bank debt of £93 million (31 July 2014 - net cash of £3.6million [1]). Outlook The order book at 31 January stood at £975 million (2014 - £783 million),representing 4,213 homes (2014 - 3,836 homes). Plans are well advanced to opena sixteenth division in the second half of the financial year and this,together with the strong order book and significant, disciplined investment inland should ensure that the Group is well placed to deliver further volume andprofit growth in the current financial year. 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. -------------------------- [1] Restated following the introduction of IFRS 10 'Consolidated FinancialStatements' and IFRS 11 'Joint Arrangements'.