Housebuilder reports sluggish completions

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Newcastle-based housebuilder Bellway has seen completions and sales fall in 2020.

In the year to 31st July 2020 completions fell by 31% to 7,522, down from 10,892 in the same period of 2019.

Bellway sold 13.6% fewer homes in July than the same month last year.

Jason Honeyman, chief executive, said: “Whilst the economic outlook is uncertain, sales demand is encouraging, and the group has built a strong forward sales position.

“With our resilient balance sheet, we will proceed cautiously along the road to recovery, determined to return the Group to its strategy of delivering long-term and sustainable growth.”

Bellway still has an order book comprised of 6,588 homes worth £1.76m.

David O’Brien, building analyst at Goodbody, said: “This is a softer than expected update from Bellway. Completions since lockdown are behind expectations and peers’ performance and while build rates are improving slowly, Bellway is the lower end of build rates for peers. The slow ramp up to full production levels will have an impact on gross margins over the next few years.

“Further, there are several suspended land deals due to COVID which are still being assessed as to whether they are viable or not. Given Bellway’s relatively shorter landbank compared to peers this is a concern.

“While Bellway has demonstrated some positives including the order book strength and better than expected balance sheet position, overall the update is weaker than anticipated.”

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Written by: Houseladder



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