Partner Article

Bellway laments uncertain spending future

NORTH East housebuilding giant Bellway said concerns over public spending cuts had hit sales rates while proposed reform to the planning system is expected to be a further obstacle to recovery.

The Newcastle firm said it made 100 sales per week in the 18 weeks to June 15, with a dip in visitor levels and weekly sales in recent weeks.

A company statement said: “Since the general election, uncertainty concerning anticipated government fiscal policy and spending reviews has resulted in a slight reduction in both site visitor levels and weekly sales rates.”

The average selling price of reservations taken in the period was 10% ahead of last year as a result of changes in mix, and an increasing exposure to the southern market, the group said.

The company’s original annual sales target of achieving last year’s volume is secure, the company said, and it is confident that legal completions for the year ending 31 July 2010 will exceed those achieved last year by around 200 units.

In addition, some 1,800 reservations have now been taken for 2010/11.

The firm’s interim statement said: “The group’s land teams continue to be active in the market, especially in the southern half of the country, albeit using a very disciplined approach with regard to margin, return on capital and achievable selling prices.

“To date, £ 151m has been unconditionally committed representing 2,475 plots, with heads of terms or conditional contracts agreed on a further 5,275 plots.

“Possible changes surrounding the planning system could pose new challenges to the business. Nevertheless, with a strong forward order book, net cash in the bank of £55m and expected future margin improvement, Bellway remains well positioned to continue to deliver earnings growth.”

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