The number of homes built by Bellway - and its profits - have risen thanks to lower interest rates and more confidence from buyers.
New half-year results show operating profit at the North East-based housebuilder grew to £154m in the half year to the end of January, compared with £132.5m in the same period the year before. That came as revenue was up to £1.42bn, from £1.27bn in the six months to the end of January 2024.
Bellway saw housing completions grow nearly 12% to 4,577 in that time, and is confident of delivering at least 8,500 this year. That level will be up from the 7,654 completions in 2024, but down on the near 10,950 it achieved in 2023.
Speaking to BusinessLive, Bellway bosses pointed to a "sea change" in the culture across planning authorities since the Labour Government came to power - as well as the firm's own land buying activity over recent years - in helping volume growth. Enhanced sales rates has given the developer hope that it will see 20% volume growth between this year and next, with ambitions to reach 10,000 properties per year by 2027.
To reach that level, Bellway chief commercial officer Simon Scougall said there would need to be changes across social housing. He welcome trailing of an announcement on £2bn of grant funding to create 18,000 social homes in England, ahead of the Chancellor's Spring Statement this week.
Having pointed to a squeeze on affordability for customers that need higher loan-to-value mortgages, the firm's chief financial officer Shane Doherty said he thought interest rates were beginning to stabilise but called for more support for first time buyers to be able to get a bigger deposit. He said there is a more than 1% interest rate gap between first time buyers and those who can get a deposit for a 75% loan to value ratio.
Bellway has previously set itself a goal to use timber frames in about 30% of its houses by 2030. A manufacturing facility for those frames will be opened near Mansfield, Nottinghamshire, where the business has signed a long-term lease agreement for a 134,000 sqft unit that is set to become 'Bellway Home Space'. A management team is in now in place and the factory is set to open this summer with the first frames leaving early next year.
Jason Honeyman, group chief executive, said: "Bellway has delivered a strong first half performance with good growth in volume output and profits. Underlying demand for our homes is healthy and we have been encouraged by the improvement in customer enquiries and reservations since the start of the new calendar year. The group remains on track to deliver volume output of at least 8,500 homes (July 31, 2024 - 7,654) in the full financial year and we currently expect to build the order book through the second half to support further growth in financial year 2026.
"I am confident that, given our operational strengths and land bank depth, we remain very well-positioned to capitalise on the positive long-term fundamentals of the º£½ÇÊÓƵ housebuilding industry, and Bellway will continue delivering the high-quality new homes the country needs."
During the first half, Bellway recorded a net adjusting charge of £9.4m in relation to legacy building safety issues. It means the developer has set aside a total of £665.1m since 2017, and has spent £163m since the start of its remediation programme.
Bellway's interim dividend has increased to 21p per share, up from 16p per share, and underlying dividend cover for the full financial year is expected to be 2.5 times.
