Bellway in house price warning as it passes 10,000 sales milestone

Shares fell at Bellway today after the housebuilder issued a warning over flagging house prices.

In a trading update ahead of its full results, the FTSE-250 builder said it has sold 10,307 homes during the year ended July 31, the first time the company has sold more than 10,000.

Total revenues grew 16%, year-on-year, to a record of almost £3 billion, while the value of the company’s forward order book, or home sales which have been agreed off-plan, also nudged higher, from £1.29bn to £1.3bn.

However, the company, which this week launched a new division in the East of Scotland, warned that there would be “more moderate” growth in house prices in the year ahead.

Bellway’s shares fell by 38p on the announcement to 2939p.

Jason Honeyman, Bellway’s newly-appointed chief executive, said: “Bellway has responded positively to the favourable market conditions, completing the sale of over 10,000 new homes for the first time in its history, whilst retaining a clear focus on quality and customer care.

“In doing so, the group has set a new earnings record and yet, having invested significantly in land, has ended the year with a strong net cash position.

“Trading has been robust and notwithstanding wider political and economic uncertainty in the UK, Bellway has both the financial and operational strength to respond opportunistically to future changes in market conditions.”

Bellway expands in East of Scotland

Regional director Iain Allison

Housebuilder Bellway has launched a new division in the East of Scotland to help meet demand for new homes in the area.

Bellway Homes Limited (Scotland East) has opened the doors of its new offices in Almondvale Business Park in Livingston.

Under the management of regional director, Iain Allison, the new office will initially be responsible for developments in Shawfair, East Calder, Broxburn, Perth and Edinburgh.

Twenty-six staff are based in the new office with a total of 70 between the office and the company’s sites in the East.

The five-star housebuilder’s other developments across Scotland will continue to be managed from Bellway Homes Limited (Scotland West) offices in Hamilton.

Andy Wyles, regional managing director for Scotland, said: “Bellway continues to increase its market share in the Central Belt of Scotland and the opening of this new division shows the confidence we have in the Scottish Housing Market.

“We have grown significantly in recent years and with such a wide geographic spread of developments from Motherwell to Perth and from Barassie in Ayrshire to Dalkeith, it makes operational sense for us to now have a base in the East.

“We have lots of exciting plans for new developments in this part of Scotland and we have a fantastic team in place in Livingston, headed up by Iain who is passionate about the importance of offering first class customer care and building high quality homes that exceed the expectations of our buyers.”

The company has plans to increase the number of outlets from the current five to eleven over the course of the next twelve months, launching two new sites from the Livingston office in early 2019 – a development of 110 homes, adjacent to the company’s Winchburgh Village site and 170 units at Gilmerton in Edinburgh.

Further sites in Livingston, Perth, Dunfermline, Mid and East Lothian are already earmarked for development over the next two years.

Iain Allison, who has been with Bellway since 2009, said: “I am very excited about the launch of the new division, which will play a key strategic role in the company’s growth in Scotland.

“We have been preparing for this launch since I was appointed to the role in November last year so it is fantastic to now be standing in the office surrounded by an incredible team of people – some of whom have been promoted internally and some completely new faces. There’s a real buzz about the office and we have ambitious targets to be building over 450 units annually by 2021.”

Lucky seven for Bellway site manager

George Carty

Bellway site manager George Carty is celebrating winning a Pride in the Job Quality Award for the seventh year in a row.

George, from Cumbernauld Village, has been selected for the prestigious accolade for his work at the luxury Manor Park development in Carrickstone.

He will be presented with his award at the Scotland Region lunch on October 5 in The Hilton, Glasgow.

George said: “It is very satisfying to win this award for the seventh time but although my name is on it, it is really an award for the whole team – the subbies, all the guys on site, everyone who is working to make exceptional homes for our homebuyers.”

Pride in the Job is the house-building industry’s most prestigious awards programme. It is dedicated to recognising site managers who achieve the highest standards in house-building.

This year’s 450 Quality Award winners from across the UK represent the top 3% of the 16,000 site managers entered into the competition for their management of a site registered for warranty with NHBC.

They will go on to be entered for the Seal of Excellence and Regional Awards with the Supreme Award Winners unveiled at gala ceremony in January 2019.

Fraser Conn, sales director, Bellway Homes Ltd (Scotland), added: “It is amazing that George has managed to win this award for a seventh time – what an incredible achievement!

“The standards set by the inspectors for the NHBC are extremely high and we could not be more proud of George and the team at Manor Park. It would be easy for them to rest on their laurels but they just keep raising the bar. George has narrowly missed out on the Supreme Award on two occasions now, it would fantastic if he manages to bring it home in January.”

Commenting on the Awards, NHBC chief executive Steve Wood said: “NHBC launched Pride in the Job in 1980, with the clear aim of promoting and driving the highest standards in new home building. 38 years on, this drive for excellence remains very much at the heart of the competition.

“Pride in the Job recognises the hugely important role site managers play in delivering high quality new homes for residents and homeowners across the UK. Their role is undoubtedly one of the toughest in house building, they really do make the difference to quality on site.”

Over the past 12 months judges have assessed the skills demonstrated by the site managers in their day-to-day work, covering six key areas: consistency, attention to detail, leadership, interpretation of drawing and specifications, technical expertise and health and safety.

Safety first for Bellway’s Brian Waddell

Brian Waddell

Bellway site manager Brian Waddell has won a top building industry award for his work at Chandler’s Way in Broxburn.

Brian will receive his Commended Best Site NHBC Health and Safety Award on July 6 at an awards ceremony at ICC Birmingham, hosted by Rory Bremner.

He is one of only 57 site managers in the UK to have been recognised for his commitment to achieving the very best in on-site health and safety and will go on to compete for the Highly Commended and National titles.

Brian, who lives in Kilsyth and has been with Bellway for two years, said: “I’ve hit the crossbar four or five times before but this is the first time I have actually won the award and I am absolutely delighted.

“Health and Safety is always our top priority but it is especially so at Chandler’s Way as we have seven houses which are already occupied right in the middle of the site and I have to make sure that every employee and contractor adheres to the highest safety standards while we build the other homes around them.”

Fraser Conn, sales director for Bellway Homes (Scotland) Ltd, said: “Brian has demonstrated what an amazing site manager he is in particularly challenging conditions and richly deserves this award.”

Stephen Ashworth, NHBC health and safety services manager, said: “The record number of entries we received this year shows that house builders are committed to driving up health and safety standards, and show a real desire to keep their colleagues and workplaces safe and healthy.

“Each Commended Winner understands and demonstrates that good health and safety practice is inextricably linked to good organisation, good quality and good customer service.

“Our health and safety advisors make several visits to every winning site and have scored them against the highly stringent standards set for the competition.  We now have an outstanding shortlist of finalists; our independent panel of judges have definitely got their work cut out this year.”

Over 500 new homes on track at new Midlothian community

(from left) James Palmer, associate director, Shawfair LLP; Joanne Casey, homes director, Mactaggart & Mickel Homes; Fraser Conn, sales director, Bellway; Neil Gaffney, area sales & marketing director, Miller Homes

(from left) James Palmer, associate director, Shawfair LLP; Joanne Casey, homes director, Mactaggart & Mickel Homes; Fraser Conn, sales director, Bellway; Neil Gaffney, area sales & marketing director, Miller Homes

A trio of housebuilders have outlined plans to deliver more than 500 new homes at the Shawfair community in Midlothian.

Bellway and Miller Homes are to build 358 new homes for sale or affordable rent to complement a nearby development of 170 new homes by Mactaggart & Mickel Homes.

Bellway’s contribution of 236 three, four and five-bedroom homes wide range of semi-detached and detached house styles will be located west of Shawfair railway station. The first homes are being marketed now with move in dates from summer 2018.

Miller Homes, meanwhile, is to pre-launch its adjacent site on October 28 from the ESPC showroom in George Street, Edinburgh, providing a further 122 three, four and five-bedroom family homes from May 2018.

Mactaggart & Mickel Homes’ development launched in April this year, with properties ranging from one-bedroom apartments to five-bedroom detached villas and an additional 32 affordable homes. The first residents moved in this summer.

As well as the much-needed homes, Shawfair will have schools, offices and retail outlets plus acres of landscaped outdoor space and cycle paths.  In time, an attractive town centre will create a focal point for the whole community.

LM_New_Homes_Shawfair_Community_011 lo resJames Palmer, associate director of Shawfair LLP, said: “Over 500 new homes signals a major step forward in making our vision for Shawfair a reality. New housing is desperately needed and I am delighted that Shawfair has attracted housebuilders of the highest calibre to help us achieve that vision.

“Properties are already selling well, with lots of interest from people who are attracted by the benefits of country living.  Shawfair is just 15 minutes from Edinburgh by train, and offers fast transport connections further afield. This is hugely positive news for the area, creating scores of jobs across the three sites.”

When complete, Shawfair will be the fourth largest town in Midlothian, roughly the same size as Cupar, Dunblane or Linlithgow.

Midlothian Council’s cabinet member for housing, Councillor Stephen Curran, added: “It’s exciting to see the new town of Shawfair beginning to take shape.  That said, we realise it is a huge undertaking building a new town from scratch. It’s vital therefore, that surrounding communities are onboard every step of the way. We want to make sure local people feel listened to, that they understand what’s happening and how they can share in the benefits this new urban expansion will bring.

“This is an unprecedented development with a total value of £1.2 billion, able to support an estimated 6,500 jobs.

“The 20-year project, which includes 4,000 new homes – 20% or more of which must be affordable – represents the biggest urban expansion in Scotland in modern times. It will potentially pump almost £100m into the local economy each year once completed. That’s not just good news for Shawfair, that’s good news for the surrounding communities, Midlothian and Scotland as a whole.”

Bellway confident of further growth as profits top £560m

Bellway Site workersStrong appetite for newly built homes has helped Bellway deliver a forecast-beating set of final results.

The FTSE 250-listed housebuilder achieved an 11% rise in completions to deliver a record 9,644 homes this year.

This lifted revenue 14% in the year-end to July to £2.56 billion, building a pre-tax profit of £571 million from £498m previously.

Operating margin rose to a record 22.3% with the house builder forecasting further growth next year.

Based on forward orders, Bellway said it was confident it could grow volumes 5% next year, taking the firm through the 10,000 homes ceiling.

It will also open a 20th trading division in the north of England in coming months building on fledgling division openings in Coventry and County Durham last year.

Executive chairman John Watson, who has temporarily taken the position while Ted Ayres is on sick leave, said: “The group has increased its contribution to the supply of much needed new homes while upholding high standards in both customer care and health and safety.

“Bellway has invested significantly in land, maintaining its rigorous and disciplined investment criteria and with a strong balance sheet and focus on operational delivery, I am confident that the group is well positioned to deliver further growth, this year and beyond.”

Jason Honeyman, who joined the board as chief operating officer last month, added: “Whilst there is some reliance upon overseas labour, predominantly in the southeast and London, there is no evidence that this valuable resource has diminished as negotiations to leave the EU progress.”

The total number of new homes sold was 9,644 (2016: £8,721), of which 7,567 were private sales and 2,077 were social housing (2016: 7,325 and 1,376 respectively).

The board expects a further 5% increase in average selling price to £280,000 this year and it also expects to grow volume by at least 5%.

Over the past year, the northern divisions increased output by 11.2% to 4,655 homes (2016: 4,187 homes). Output in the south grew by 10% to 4,989 homes (2016: 4,534 homes).

Medical leave of absence prompts reshuffle at Bellway

Ted Ayres

Ted Ayres

Bellway has announced that Ted Ayres is to take a leave of absence from his role as chief executive for treatment for a medical condition.

John Watson, who served as group chief executive at before becoming chairman in 2013, will step in as executive chairman during the period of absence.

The housebuilder also announced that Jason Honeyman will be appointed to the Board as chief operating officer on September 1. Jason commenced employment with the company in January 2005 as managing director of the Thames Gateway Division, becoming southern regional chairman in December 2011.

John Watson said: “Jason is a highly respected senior operator in the industry and has considerable housebuilding experience having overseen the successful management of our Southern Divisions since 2011. His appointment to this new group role strengthens the operating structure and will support the delivery of the Company’s disciplined growth strategy.”

The Board and management team said they wished Ted a swift and full recovery and look forward to his return.

Bellway says independence would not change Scottish growth strategy

Keith Adey

Keith Adey

Scottish independence would not impact Bellway’s growth strategy north of the Border, the housebuilder has said as it revealed healthy growth in turnover and profits.

Speaking as the company released its half-year results, group finance director Keith Adey said there were strong, positive market conditions ahead of the prospect of a second referendum.

“If you do end up with a scenario where Scotland becomes a different country to the UK, to separate that, it’s so embedded I can’t see how it becomes structurally a different country to invest in, in the way it’s different to invest in France,” he said. “The barriers to entry can’t be that great.”

Mr Adey said the 2014 independence referendum didn’t particularly affect the company, but that uncertainty was never welcome.

“Of course it has a degree of uncertainty for people but we’re still investing in Scotland and Scotland is doing very well for us. Demand is strong, we’re buying land and reservations are coming through well. We’ve got a good business so I don’t see how the referendum will change that.”

For the six months to January 31 Bellway made a pre-tax profit of £247.6m on £1,148.5m revenue. The profit figure was up 9% (2016: £226.6m) and revenue was up 6% (2016: £1,084.9m).

The operating margin improved from 21.4% to 22.0%.

The business completed 390 homes in Scotland over the period, more completions than any other part of the UK, at an average selling price of £198,000.

This is the eighth successive year of revenue growth for Bellway, over which period, revenue has increased by more than 250%.

Chairman John Watson said: “Bellway is achieving this growth whilst retaining a focus on return on capital employed and maintaining an appropriate and conservative use of bank debt and land creditors. Our strong balance sheet and operational capacity still provides scope for further controlled expansion, enabling Bellway to achieve additional, future volume and earnings growth, by continuing to invest in attractive land opportunities across the country.”

Deals agreed to bring over 350 homes to Edinburgh and Midlothian

Shawfair signDeals have been agreed to build hundreds of much-needed new homes in Midlothian and the south east of Edinburgh.

Shawfair LLP has confirmed that housebuilders Bellway Homes and Miller Homes, with the support of Midlothian Council, will deliver a mixture of up to 358 new homes for sale and affordable rent over the next five years at its Danderhall South site in Shawfair after completing missives.

With construction due to start on site in spring 2017 subject to detail planning approval, the news of major housebuilders investing in Shawfair marks a significant milestone in what is currently the largest urban expansion project in Midlothian and south east Edinburgh.

Nick Waugh, director of Shawfair LLP, said: “We’re absolutely delighted that two of the UK’s most high profile housebuilders have agreed to build quality new homes as part of the first phase of development at Shawfair LLP’s Danderhall South site.

“This announcement comes at a time of great need for a quality mix of housing in the area and represents a key moment in the lifespan of the project so far as we look to realise our vision of creating a community and desirable place to live at Shawfair in the future. This is positive news for the area and will help to unlock further investment and create jobs in the construction sector and supply chain.”

Bellway Homes will deliver 236 new homes directly to the north of Shawfair Park, including a mixture of two, three, four, and five bedroom housing for sale and affordable rent.

Miller Homes will build a further 122 new homes of two, three, four and five bedrooms for sale and affordable rent at the east of Danderhall.

Andy Wyles, managing director of Bellway Homes (Scotland) Ltd, said: “This is undoubtedly one of the most exciting new residential developments in Scotland and we are thrilled to be playing a part in the growth of this vibrant new community, as part of our ongoing expansion in the East of Scotland.

“There is so much to recommend Shawfair to homebuyers – not only is it close to the city centre with its world renowned attractions but it is also just a short drive from the beach at Portobello and beautiful country parks.”

David Morgan, land director for Miller Homes Scotland East, said: “We are delighted to be involved in creating the first phase of a thriving and vibrant new community at Shawfair, which will completely transform the south east side of the city. Miller Homes has an extensive track record in building attractive, sought after developments and we look forward to working with Shawfair LLP to help deliver this ambitious project through the provision of much needed new quality homes at Danderhall South.”

The development of the new community at Shawfair, through a joint venture between Buccleuch Property and Mactaggart and Mickel, will deliver 4,000 homes, new schools, business spaces and public amenities over the next 20 years.

Bellway shrugs off weak pound fears as it posts soaring profits

Ted Ayres

Ted Ayres

Bellway has moved to allay fears that the fall in the value of the pound will affect house prices, though the firm admitted its suppliers may seek price rises as a result.

Chief executive Ted Ayres set out current challenges facing the business as he unveiled the strong set of financial results for the business and exchange rates was not among them.

Posting a better than expected 41 per cent jump in full-year profits to £498 million today, Ayres suggested that while suppliers might raise prices following sterling’s decline, “the overall cost of any adverse currency fluctuations is expected to be minimal when considered as part of the overall cost of constructing a new home”.

In the year to 31st July 2016, Bellway’s revenue rose 27 per cent to £2,2401m (2015: £1,765m). Pre-tax profit was up nearly 41 per cent to £497.9m (2015: £354.2m).

The number of homes sold during the year reached a record high for the company of 8,721, a 12 per cent increase on the previous year’s 7,752 and the group’s seventh successive year of volume growth. Average selling price was up 12.9 per cent to £252,793 (2015: £223,821).

Operating margin was 22.0 per cent (2015: 20.4 per cent).

Ted Ayres said: “There is still some upward pressure with regards to labour costs, particularly in the southeast, where the availability of certain trades, predominantly ground workers, brick layers and scaffolders is most restricted.  These pressures are, however, manageable in the context of the growth of the group.

“Material cost increases have largely abated and whilst there still remains occasional availability issues, longer lead in times have been factored into build programmes and strong relationships with suppliers are helping to ensure that construction timetables are being met.

“The group does not directly import any materials from overseas and despite the volatility following the outcome of the EU referendum, the overall cost of any adverse currency fluctuations is expected to be minimal when considered as part of the overall cost of constructing a new home.”

Chairman John Watson added: “The long term outlook continues to be positive, supported by strong customer demand, a substantial forward order book and favourable trading conditions across all areas of the country where Bellway operates.  Whilst there is some uncertainty following the result of the EU referendum, trading since that date has remained resilient.  Bellway has invested significantly in high quality land opportunities and infrastructure over recent years.  As a result, with its strong balance sheet and structure of nineteen operating divisions, the group is well placed to deliver additional value for shareholders through further disciplined volume growth in the current financial year.”

Bellway opened a new South Midlands division in Coventry in February 2016 and in August opened a division in County Durham. Bellway now has 19 operating divisions, six of which have been opened in the three years since August 2013.