Partner Article

Bellway plans turnaround

Housebuilder Bellway today said it had snapped up £120 million of land in the past two months as it drew encouragement from signs of stabilisation in the property market.

The Newcastle-based firm, which intends to “selectively” open new outlets, said the land had the potential for more than 3,370 new homes.

Bellway is emerging from a year of “partial hibernation” which saw pre-tax profits slide 82% to £29.8 million in the year to 31 July.

But the firm’s reservations are 58% ahead of a year ago with forward orders representing 61% of the current year’s planned output.

The company warned that the pace of recovery was still “uncertain” due to the lack of mortgage availability and unemployment fears, although it was encouraged by signs of firmer house prices.

Chief executive John Watson said: “This stability, whilst still fragile, is extremely welcome and, consequently, the group is now looking to selectively increase both work in progress expenditure and the number of outlets.”

Bellway, whose turnover plunged 40% to £683 million last year and shed around half of its 2,400 staff, bolstered its balance sheet through slashing debt by £180.9 million to £36.8 million.

The housebuilder began making plans to bunker down more than a year ago “as the ghosts of the last major recession loomed large”.

Chairman Howard Dawe said: “The primary strategy…was simply to repeat the lessons learnt in previous downturns, make cash generation a priority…reduce the opening debt position… and where possible, to sell homes at positive margins.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .