Profits at housebuilder Bellway tumble in face of challenging market
However, the Newcastle-based firm said it expects to complete more homes this year as easing mortgage rates have helped support more demand.
Bellway said revenues and profits for the latest financial year were affected by more expensive mortgage rates.
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Hide AdRates rocketed after interest rates were hiked to a peak of 5.25 per cent – their highest for 15 years – and remained at this level until the first cut by the Bank of England in August this year.


On Tuesday, Bellway revealed that revenues fell by 30.1 per cent to £2.38bn for the year to July 31, compared with the previous year.
House constructions also dropped by 30.1 per cent to 7,654 homes for the year, driven by a weak order book at the start of the year.
The firm’s pre-tax profits plunged by 62 per cent to £183.7m for the year.
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Hide AdJason Honeyman, group chief executive of Bellway, said: “Bellway has delivered another resilient performance despite the challenging operating conditions during the year.
“While a lower order book at the beginning of the financial year drove the reduction in the number of housing completions, customer demand through the second half benefited from a moderation in mortgage interest rates which has eased affordability pressures and supported an increase in reservations.”
Bellway said customer demand has been “robust” over the start of the new financial year, with a further reduction in mortgage rates helping to drive a recovery in orders.
Its forward order book has increased to 5,144 homes from 4,411 homes at the same period of last year, Bellway said.
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Hide AdAs a result, Bellway said it is targeting at least 8,500 house completions this financial year, which would be an 11 per cent rise on the previous one.
Richard Hunter, Head of Markets at interactive investor, commented: “Bellway will be glad to see the back of this trading period and consign the numbers to history, although current trading seems to show a marked turn for the better.
"The results provide a number of areas for potential disappointment, although reaction to the results has tended to gloss over what has already passed.
"Given the group’s policy on shareholder returns and to ensure adequate cover, the total dividend was more than halved from £1.40 per share to 54p, which reduces the projected yield to just 1.8 per cent.
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Hide Ad“Prudent though this move may turn out to be, dividend reductions are rarely well received and this particular cut reflects the difficult trading conditions which Bellway has had to endure.”
Mr Hunter continued: “The current path of interest rates and mortgage affordability are both potential positives, although the measures emanating from the impending Budget seem to have had a detrimental effect on consumer confidence in advance. The group is also edging towards a quieter time of year for house buying, although it expects its revenue in the current trading period to be skewed towards the first half as the current momentum continues.”
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