Housebuilder returns to profit but cautions on “uncertain” outlook
Housebuilder Bellway has warned volume is likely to remain flat this year, as it reported pre-tax profits of £44.4m for 2010, turning around last year’s £36.6m loss.
The housebuilder increased its dividend in response to the profits, which were achieved on the back of sale of £768m, a rise of over 12% from the previous year. The number of homes sold also increased, to 4,595 from 4,380.
However chief executive John Watson warned that the second half of the year, since the general election, had been much more uncertain, and that the autumn selling season had seen sales pick up only slightly.
He said that previous guidance to the market that the number of homes built could reach as high as 5,000 next year now looked optimistic. “It’s a difficult call, but we think probably sales of homes are likely to remain flat. We’ve a mindset to do more if we possibly can, but there’s a fog of uncertainty there.”
Watson said the firm had spent £200m on land in the last year, the majority of which was in London and the south east, and said market conditions looked set to remain stronger in the south.
Bellway chair Howard Dawe said: “Buyer confidence slowly ebbed away during the summer. Sales in the early part of what is traditionally an active autumn selling period have picked up, albeit only slightly, following the usual summer lull and it seems that potential homebuyers are awaiting the outcome of the Comprehensive Spending Review.”
The group currently has a forward order book of £397m and £59m of net cash. Dawe said the cash pile gave it the ability to respond effectively to any changes in market conditions.
The firm changed the mix of the homes built in 2010, from 48% being apartments to just 39%, enabling it to sharply increase the average selling price, to £163,000 from £154,000.