Bellway PLC on Tuesday said it expects to build more houses in the new financial year, after a ‘challenging’ year just ended saw profit and sales plunge.

The Newcastle-upon-Tyne housebuilder said pretax profit dropped 62% to £183.7 million in the year ending July from £483.0 million a year prior. Underlying pretax profit fell 58% to £226.1 million from £532.6 million.

Revenue declined 30% to £2.38 billion from £3.41 billion.

Chief Executive Jason Honeyman called it a ‘resilient performance despite the challenging operating conditions during the year.’

More optimistically, Bellway said customer confidence gradually improved throughout the year, driven by a moderation of both mortgage interest rates and consumer price inflation, and an increase in wages.

In response, shares in Bellway jumped 7.1% to 3,270.00 pence each in London on Tuesday morning. The wider FTSE 250 index was marginally lower.

Reflecting this, the private reservation rate rose by 14% to an average of 124 per week up from 109 a year before. The private reservation rate per outlet per week increased by 11% to 0.51 from 0.46.

Continuing the positive theme, Bellway said that since the start of the new financial year, customer demand has remained ‘robust’, supported by a drop in UK mortgage rates over the summer.

In the nine weeks since August 1, the private reservation rate increased by 49% to 147 per week from 99 a year prior, representing a private reservation rate per outlet per week of 0.59, rising from 0.41 on-year.

Bellway said the combination of improving trading conditions and a strong outlet opening programme has generated a healthy increase in the year end order book.

As a result, it is well-placed to deliver a ‘material increase’ in volume output in financial year 2025.

Bellway expects to deliver completions of at least 8,500 homes in the current financial year, up 11% from 7,654 homes in the year just ended. This would still be 22% lower than the 10,945 completions reported in the year to July 2023. Volume output is expected to be weighted towards the first half.

The builder said it welcomed the Labour government’s plans to reform the UK planning system, which in time is expected to unlock land supply and support an increase in new housing across the country.

‘Against this improving backdrop and if market conditions remain stable, our operational strength and robust balance sheet, combined with the depth and quality of our land bank, provide an excellent platform for Bellway to deliver strong multi-year growth’.

Reflecting the tougher conditions in the financial year just ended, Bellway slashed its final dividend to 38.0p per share, down from 95.0p a year before, sending the total dividend for the year down to 54p from 140p.

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