North East housebuilder Bellway says strong demand for housing has pushed revenues up to near pre-pandemic levels, with its full year figure set to rise 41% to more than £3.1bn.
The Newcastle based firm, now based at AirView Park, posted a bullish trading update saying strong recovery has placed revenues just 2.5% below the 2019 level, as the number of housing completions rose by 34.8% to 10,138.
In a trading update for the year ended July 31 2021 the firm said it had seen good underlying demand across the country, with a private reservation rate of 169 per week – higher than last year’s 141 and the 2019 rate of 160.
It also has a record forward sales position, with an order book of 7,082 homes valued at £2.022bn, giving it a strong platform for growth in the year ahead.
Bellway also says it expects to set aside a further sum of money to deal with legacy issues relating to cladding on apartment blocks in the aftermath of the Grenfell disaster. In March it added £20m to the amount it had set aside, taking the total to £131.6m.
It said: “This is a complex area where cost estimates are subject to change as on-site works progress and further investigative works are undertaken, or, if the scope of Government legislation further widens. Before taking any additional amounts into consideration, Bellway has already set aside £131.6 million since 2017 in relation to fire safety, demonstrating our commitment to act responsibly to this issue.
“Bellway continues to actively pursue recoveries from suppliers, subcontractors, and professional advisors where they have fallen short of the standards required.”
Meanwhile, it said the pricing environment remains positive, with house price inflation generally offsetting build cost pressures.
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Bellway said it was also dealing with short-term constraints in the supply chain, as well as intermittent labour shortages across the sector as colleagues, subcontractors and suppliers are subject to self-isolation requirements to stop the spread of Covid-19.
Chief executive Jason Honeyman cited the firm’s “front-footed, yet disciplined approach” to land acquisition which has led to a record investment in new sites since getting back into the market early last summer.
The group has contracted to purchase 19,819 plots – a marked increase on the 12,124 it snapped up last year and the 13,284 plots in 2019 – across 109 sites, targeting areas in desirable locations with high demand, where housing is affordable in local markets.
Bellway said it is also continuing to invest in its strategic land portfolio and is further strengthening its strategic land team to pursue longer-term opportunities.
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Mr Honeyman said: “Bellway has delivered a strong performance, with volume output once again above 10,000 homes and housing revenue approaching 2019 levels.
"This positive recovery has been achieved through the hard work and dedication of our colleagues, subcontractors, and supply chain partners, while maintaining the high quality of our product and making further improvements in the service we offer our customers.
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“Going forward, we are in an excellent position to continue our long-term growth strategy. The Group benefits from a substantial order book and a robust balance sheet.
"In addition, our record investment in land and the resultant strengthened land bank provides a strong platform for both volume growth and further margin recovery in the years ahead.”