Bellway profits slump but sees brighter outlook as reservations rise

15th Oct 2024 07:04

(Sharecast News) - UK housebuilder Bellway on Tuesday reported a slump in annual profits, reflecting weaker demand due to higher mortgage rates, but said its forward order book had increased as economic conditions eased.

The company said pre-tax profit for the year to July 31 fell 62% to £183.7m as completions slumped by a third to 7,654 homes.

Its forward order book at the end of September was 5,109 homes, up from 4,636 a year ago and had a value of £1.43bn compared with £1.23m in 2023.

"While a lower order book at the beginning of the financial year drove the reduction in the number of housing completions, customer demand through the second half benefited from a moderation in mortgage interest rates which has eased affordability pressures and supported an increase in reservations, said chief executive Jason Honeyman.

"The combination of these improving trading conditions and our strong outlet opening programme has generated a healthy increase in the year end order book. As a result, we are well-placed to deliver a material increase in volume output in financial year 2025."

Honeyman also welcomed the new Labour government's plans to reform the planning system, "which in time is expected to unlock land supply and support an increase in new housing across the country"

In the nine weeks since 1 August - against a weak comparative - Bellway's private reservation rate rose by 48.5% to 147 per week, he added.

Reporting by Frank Prenesti for Sharecast.com