Bellway sales down by 1,000 and margins 3% lower

Bellway has reported a fall in sales during the financial year to the end of July. The latest figure of 6,600 is 1,000 fewer in the previous year.

The average sale price was £4,000 lower at £169,000 and the previous margin of 19% has been trimmed “by up to 3%”.

A trading statement from Bellway this morning, chief executive John Watson said: “Bearing in mind market conditions, and the fact that the cancellation rate increased to unprecedented levels towards the end of the financial year, we consider this to be a satisfactory performance.”

Bellway said that the main reason why the average price slipped back was that 20% of properties were sold to housing associations.

Margins have eased as buyers needed to be incentivised

Bellway says that widespread land write downs are not envisaged “but the position is being monitored in light of market conditions”.

Restricted mortgage supply and a lack of customer confidence have led to lower levels of activity. Reservations fell by around 45% during the second half of the financial year when compared with the same period in 2007.

Bellway’s orderbook of future sales at 31 July was £370m (figures at the same time last year: £594m) of which 62% is currently contracted.

Spend on land has been trimmed and the group says that this “may result in a reduction in our total land bank position”.

Watson added: “We have amalgamated a number of divisions and reduced overheads. This, combined with tighter controls on work in progress expenditure, has enabled the company to operate within its banking facilities.”

Bellway ending the year with gearing of almost 23% and with only 45% of its borrowing facilities utilised.