08 February 2022
If you are covering Bellway’s latest results, please find below a comment from Oli Creasey, property research analyst at Quilter Cheviot:
“For the second half of the year and up to January this year Bellway has set a company record for completed homes, while maintaining discipline over other key metrics.
“Completed homes may have only risen marginally compared to the same period last year (+0.7%), but this was comparable to a highwater mark and took some beating, which is all the more impressive. Crucially, the company believes it is on target to deliver volume growth of c.10% for the full year and the same again in 2022/23.
“This growth has occurred despite Bellway having 12% fewer outlets than the prior half year, and has not come at a cost to profitability with the average sale price up +3%, and the company has improved full year guidance to an average above £300k when it was expected to moderate.
“Bellway have, like other housebuilders, experienced inflationary pressure throughout the supply chain, but have managed to keep a lid on costs, and improved the company’s operating margin to 18%, with guidance for further improvement to profitability in H2.
“It has also made comment on the legacy fire safety issues surrounding the sector. The company notes that it has already set aside £165m to deal with legacy issues which it may be responsible for, including those below 18 metres tall. The firm is already undertaking, or has already completed, the remediation work on relevant buildings. We welcome this news and approach by Bellway, although we note that while the comments are broadly supportive of likely government interventions, there is still a significant gap between what the building industry is willing to pay and funds the government hopes to raise.”
