By Joe Hoppe
House builder Bellway has announced a rise in its pretax profit for fiscal 2023, driven by the unwinding of one-off provisions. However, adjusted profit, revenue, and housing completions saw a decline, and the company forecasts lower housing completions for the current fiscal year.
In the year ending July 31, pretax profit reached £483.0 million ($590.1 million), compared to £304.2 million in fiscal 2022. This increase is attributed to the reversal of £346.2 million in legacy building safety expenses from the previous year. When looking at underlying figures, however, the pretax profit for fiscal 2023 declined by 18% to £532.6 million.
Revenue for the year slipped to £3.41 billion from £3.54 billion, with housing completions falling by 2.3% to 10,945. Additionally, the average selling price saw a slight decrease from £314,399 to £310,306.
Although private demand was impacted by higher mortgage interest rates, cost-of-living pressures, and the conclusion of the Help-to-Buy program, Bellway partially offset this with its program to accelerate the construction of social homes.
The board has proposed a total dividend per share of 140.0 pence, remaining unchanged from the previous year.
Chief Executive Jason Honeyman expressed optimism for the future, stating, “The depth of our land bank and robust balance sheet provide ongoing strategic flexibility and scope for outlet growth in the year ahead. Notwithstanding the near-term market challenges, Bellway remains very well-placed to capitalize on future growth opportunities and to continue creating long-term value for all our stakeholders.”
As of October 1, Bellway’s order book stands at £1.23 billion, a decrease from £2.09 billion the previous year. The company anticipates a significant reduction in volume output in the new year, with a target completion of approximately 7,500 homes. Customer demand continues to be influenced by mortgage affordability constraints.