Bellway changes bonus policy amid £50m loss

Apr 1 2009 by Peter McCusker, The Journal

Mr Watson said these measures would cut its debt to £100m by the end of the financial year in July, which would leave it ample room for manoeuvre with bank lending facilities of more than £400m available.

Bellway said visitor numbers and reservation rates were up in the first 11 weeks of 2009 compared with the final five months of last year. But it said it had yet to see any “consistent and prolonged” improvement in consumer confidence. It sold 2,014 properties compared with 3,252 in the six months to January 2008.

Completed sales on its homes in the North were badly hit, plunging 59% to 728 sales. In the South, it sold 1,286 houses, a dip of 14% compared with the same period last year.

Average selling prices were down almost 11% from £174,800 in the first half last year to £156,100 this time around as Bellway cut prices to tempt buyers. A quarter of deals struck in the six months were then cancelled.

Mr Watson said: “Since Christmas, there has been a big pick-up for us. The sales rate has virtually doubled compared with the sales rate prior to Christmas. It is encouraging, but we are still giving away discounts on every deal. It is a spring bounce. The question is how long it will continue, will it be sustained? I don’t know, but I can’t see it really improving until mortgage liquidity improves, and there are also the dark clouds of unemployment. There is a long way to go.”

Broker Panmure Gordon said Bellway’s performance was in line with its expectations, saying: “Trading conditions remain tough, but with low levels of gearing and a well-run business model, we believe that the group will exit the current slowdown in excellent shape.” Shares finished the day 29p up at 677.5.