Housebuilder Bellway has announced a major growth strategy after a 40% rise in revenues saw its performance return close to pre-pandemic levels.
Though it flagged how supply chain issues were holding back construction activity, the Newcastle firm posted preliminary results for the year ending July 31 that showed revenue of 拢3.1m and operating profit of 拢531.5m, up 65% on last year.
That rise in revenue put Bellway only 2.8% below the record turnover it saw in 2019, and has led the firm to more than double its proposed dividend to shareholders.
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Bellway said it had seen its number of housing completions top 10,000, having dipped to 7,500 last year, and had strengthened its land bank to more than 86,000 plots to sure it had the capacity for future growth.
The company is now targetting the building of between 16,000 and 18,000 homes each year, saying that would provide 鈥渁ttractive, long-term returns for shareholders.鈥
Bellway鈥檚 average selling price fell slightly during the year to around 拢295,000, with the reduction attributed in part to changes in the Government鈥檚 Help-to-Buy rules.
Chairman Paul Hampden Smith said: 鈥淏ellway has delivered a strong set of results and, despite the ongoing global pandemic, is well on the road to recovery.
鈥淭he positive response and actions from our colleagues, subcontractors and suppliers have helped the group complete the sale of 10,138 homes (2020 鈥 7,522, 2019 鈥 10,892), restore housing revenue to just 2.3% below the pre-pandemic level and increase earnings per share by 102.4% to 316.9p (2020 鈥 156.6p, 2019 鈥 437.8p).
鈥淚t is the hard work, dedication, and efforts of those who have worked for, and with, Bellway over the past year, that have enabled us to achieve this strong performance. On behalf of the board, I would like to express our gratitude to all those who have contributed to this result, for their resilience, ongoing commitment, and their support for the continuous evolution in working practices.鈥
Having benefitted from a buoyant housing market supported by low interest rates and Government support schemes, Bellway and other major housebuilders have enjoyed soaring revenues and profits in recent years.
Though the pandemic disrupted construction activities, housebuilders are bouncing back quickly and Bellway said it was targetting 拢1.25bn in cumulative profit over the next two years, one third of which would be returned to shareholders.
The company said it had a strong balance sheet, with year-end net cash of 拢330.3m and committed debt facilities of 拢500m.
But it said it had set aside a further 拢51.8m for fire safety measures on apartment schemes following the Grenfell disaster, taking its total commitment in that area to 拢164.7m.
The company flagged the impact of ongoing supply chain disruption, which is pushing up prices of materials such as steel, timber and MDF, though it said there were some signs that recent soaring prices are 鈥渂eginning to subside鈥.
It added that lorry driver shortages and the recent fuel crisis has also impacted materials availability while it is further battling amid wider labour shortages.
Bellway said: 鈥淚n general, these constraints are manageable by adopting good procurement disciplines and forward planning.
鈥淭hey will, however, mean that construction output in the first half of financial year 2022 is likely to remain similar to that achieved in the first half of financial year 2021.鈥
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