Bellway records fall in annual completions, but ends year ahead of expectations

Bellway has finished the year with completions ahead of expectations, but the number was still significantly down on last year.

According to a trading update for the year ended 31 July, the housebuilder completed 7,654 homes in the period, down 30% from 10,945 in 2023 but ahead of the 7,500 guidance it had previously put out.

The firm reported experiencing a similar decline in both its private and social outputs.

“While volume output was slightly ahead of previous guidance, the decline compared to the prior year reflected the lower forward order book at 1 August 2023 and the softer trading conditions,” the update said.

Bellway also recorded falls in revenue, from £3.4bn to £2.4bn, and in its underlying operating margin, from 16% to 10%.

The private reservation rate per outlet per week of 0.51 increased by 10.9% compared to the prior year (0.46).

According to the update, Bellway is “encouraged” by improvements in mortgage affordability, which has led to a reduction in the cancellation rate to a “normalised” level. It also welcomed the new government’s focus on housebuilding.

Jason Honeyman, group chief executive, said Bellway had delivered a “resilient” performance despite challenging conditions.

“While a lower starting forward order book drove a reduction in volume output, customer demand during the year has benefitted from a moderation in mortgage interest rates which has helped to ease affordability constraints and supported an increase in reservations,” he said.

“The improving trading backdrop, combined with the strength of our outlet opening programme, has generated healthy growth in the year-end order book.” 

The group’s order book at 31 July comprised 5,144 homes, with a value of £1.4bn.

Honeyman said the group was in “a strong position to return to growth” in 2025.

The update comes after Bellway was given an extension to its deadline to announce a firm intention to takeover Crest Nicholson.

Bellway now has until 20 August to either announce a firm intention to make an offer by then or rule out making an offer, under merger code rules.

At the start of last month, it submitted a revised non-binding all-share offer to Crest Nicholson worth £720m, which the housebuilder’s board said it was “minded to recommend”.

Crest Nicholson made a £31m pre-tax loss on reduced revenue in the six months to April 2024, compared with a £28m profit the previous year.

A merger of Bellway and Crest Nicholson would create a business with a turnover of £4.3bn, which would make it the second largest according to Building’s annual Top 50 Housebuilders ranking.