Bellway reports 29% drop in profits and writedowns of £131m

Housebuilder Bellway announced writedowns of £130.9m as it reported a 29% profit slump in its full-year results.

The writedown, which is equivalent to about 8% of the company’s stock, comes amid the UK’s worst housing crash for a quarter of a century.

The firm said pre-tax profit, excluding exceptionals, fell to £165.7m for the year ended 31 July, down from £234.8m in 2007. Net profit fell 84% to £27m.

Turnover was £1.2bn, down from £1.4bn last year.

Bellway, which said it had “never witnessed such a swift change in the housing market”, sold 6,556 homes in the year, compared with 7,638 in 2007. The average price of its homes fell to £169,700, down from £173,300 last year.

The firm said its order book stood at £342m, 50% of which was work for housing associations.

Chairman Howard Dawe said: “The current state of the housing and mortgage markets has been well documented and the speed of the deterioration is unprecedented.

“The Board has a clear strategy, aimed primarily at conserving cash and reducing the cost base, while maintaining the essential operational fabric and protecting shareholder value so that growth may commence when the market returns to more normal conditions.”