March 25 2020 @ 10:44 by Steven Hugill
A North East-headquartered housebuilder has revealed record sales – but warned the coronavirus outbreak will deliver “substantial disruption” to operations.
Bellway says half-year sales hit a new high of 5321 in the six months to January 31, as Government Help to Buy support, low interest rates and a favourable employment environment spurred customer demand.
According to the Seaton Burn-based firm’s results, such fertile conditions pushed sales 6.3 per cent higher than the 5007 recorded in the same period a year ago, and helped total revenues increase 3.6 per cent to £1.54 billion.
But gross profit was down 5.6 per cent to £356.5 million and bosses warned the coronavirus pandemic poses a “significant risk to demand in the weeks and months ahead”.
“Given the risks presented by COVID-19, it is difficult to predict the effect that they will have on completion numbers in the foreseeable future, although output for the full financial year will reduce compared to previous guidance,” said group chief executive Jason Honeyman.
However, pointing to a 7.3 per cent rise in weekly reservations to 278 in the six weeks since February 1, with its order book standing at £1.51 billion – or 5772 homes – Jason said the business is well placed to continue its growth in the post COVID-19 period.
He added: “The group has a strong balance sheet with net cash at January 31, low land creditors and committed bank facilities of £545 million, placing it in a strong position to withstand the likely disruption.
“Beyond the present uncertainty, industry fundamentals remain positive, with continued underlying demand for affordably priced new homes.
“The evolving economic landscape will provide challenges in the future, however, our robust balance sheet and flexible capital structure ensures that Bellway remains well positioned to continue supplying much needed new homes.”
Bellway has developments across the UK, with its North East estates including Moorfields, in Killingworth; Arcot Manor, in Cramlington; and Byron Heights, on the outskirts of Seaham, County Durham.