Bellway to reinstate dividend as strong demand lifts revenue

Bellway forecasting sale of 10,000 homes for coming year

Bellway (LON:BWY), the homebuilder, has reinstated its dividend after completing a record number of homes in the first half of the year.

The FTSE 250 company posted an 11.6% rise in revenue from the year before to £1.7bn, while operating profit remained flat at £297.7m.

Bellway is forecasting sales of 10,000 homes for the full year up to 31 July 2021, which would be a substantial increase on the 7,522 sold in the 12 months prior.

Having been cancelled last year on account of the pandemic, the company reinstated its dividend at 35p per share.

The homebuilder confirmed in a statement alongside its results that the average sale price of its homes jumped to £303,206, as well as saying there was strong underlying demand in the housing market.

Bellway has also made a “significant investment in land, with a record 8,848 plots contracted.”

The Newcastle-based homebuilder has also put aside £20m to deal with cladding related issues in apartment blocks following the Grenfell disaster.

Commenting on the results, chairman, Paul Hampden Smith, said:

“Bellway has delivered a good first half trading performance, achieving record first half revenue because of its strong brought forward sales position and investment in work-in-progress. We have delivered this growth, while retaining our core focus on quality and customer care and have been recognised as a five-star homebuilder for the fifth consecutive year.”

“We have acted cautiously and responsibly throughout the COVID-19 pandemic, ensuring safe working practices across all our construction sites, sales centres, and divisional offices. In addition, we continue to offer support to our colleagues, whose ongoing efforts have been crucial in helping Bellway emerge strongly from this global crisis, with ongoing mental health and wellbeing campaigns.”

“As a responsible developer, Bellway recognises concerns with regards to fire safety in apartment buildings.  As part of our efforts to help building owners of legacy apartment schemes, we have recognised an additional net legacy building safety expense of £20.3 million in the period.”

“The brings the total amount provided by the Group since 2017, in relation to fire safety, to £131.6 million. This is a substantial sum which demonstrates Bellway’s responsible approach to supporting customers with regards to this issue.”