House-builder Bellway has unveiled record financial results on the back of a 21% increase in the number of new homes sold.
For the year to 31 July 2014, Bellway had revenues of £1,486.4m, up 34% from the previous year’s £1,110.7m.
Despite rising costs, particularly in the southeast, pre-tax profit was up 75% to £245.9m (2013: £140.9m).
During the year Bellway sold 6,851 homes, compared to 5,652 the previous year.
"This has been an exceptional year of progress for the group in which we have delivered record revenue and profit,” said chairman John Watson.
"There has been a significant improvement in customer confidence during the year and this has enabled Bellway to accelerate the construction and delivery of much needed new homes. The outlook remains positive with a record forward order book and this should enable the group to deliver volume growth of around 10% in the current financial year."
Chief executive Ted Ayres was equally optimistic. “The group's strong balance sheet and widespread national presence ensures that Bellway has the ability to invest in a wide range of locations and a variety of land opportunities,” he said. “Our existing structure of 15 operating divisions provides capacity for growth and beyond that, the group is well positioned to open new divisions whilst maintaining strict investment criteria.”
He continued: “There continues to be good availability of high quality land that either meets or exceeds our minimum acquisition criteria in respect of gross margin and return on capital employed. This availability, together with a more positive planning environment, is providing the group with attractive opportunities for investment.”
He said that while there had been shortages of materials and skilled labour, they were manageable.
Mr Ayres said: “The supply of bricks and blocks reduced towards the latter part of 2013, but the shortage has become more manageable, easing as the year has progressed. The Group mitigates material cost pressure through centrally procured, national arrangements with suppliers.
“There has also been reduced availability with regard to certain subcontract trades, in particular bricklayers and ground workers, with these challenges being most pronounced in and around the southeast of the country where there have been inevitable cost increases.
“Our divisions seek to foster strong relationships with locally sourced subcontractors, encouraging a culture of fairness in our dealings. In addition, we became signatories to the Prompt Payment Code during the year, which reflects our commitment to ensure that all subcontractors are paid within agreed timescales for work performed. This collaborative approach helps to create a sense of loyalty, with around 4,500 subcontractors and suppliers having worked with Bellway for at least three consecutive years.”
