Bellway profits hit hard
FALLING house prices, fewer sales and exceptional charges of more than £66m pushed housebuilder Bellway into a pre-tax loss for the six months to the end of January.
The Newcastle builder - Britain’s third biggest - made a pre-tax loss of £48.6m after the exceptional charges which resulted from a review of the land it owns.
Without the charges, Bellway would be in the black with underlying profits of £17.7m for the six months to the end of January, a slump from £96.9m in the same period last year.
Both the cost of a Bellway home and the number of people buying them have dropped dramatically and the group’s revenue fell to £320.2m from £581.5m.
It sold 2,014 properties compared to 3,252 in the six months to January 2008, with average house prices falling from £174,800 to £156,100.
Completed sales on its homes in the North were particularly badly hit, plunging by 59% to 728 sales. In the South, it sold 1,286 houses, a dip of 14% compared to the same period last year.
Chairman Howard Dawe said: “Virtually every private reservation since last summer has been achieved using a variety of incentives, notably part exchange and Bellway's own shared equity scheme, Opening Doors.
“A combination of low levels of mortgage lending, high deposit requirements and the caution adopted by most valuers on behalf of lenders has not helped consumer confidence. As a consequence, we are experiencing historically high levels of cancellations of around 26%.”
But he added that the number of people reserving a Bellway home had improved since the start of the year.
Mr Dawe said: “These reservations are currently running at only 13% below the same period last year, generating optimism that our current year end target is achievable.”
Bellway, which last year axed 850 of its 2,500 UK staff including 160 in the North East, recently came under fire from shareholders after paying out £632,500 in bonuses to three top executives, even though the company failed to meet its performance targets.
