Bellway reports 30% fall in profits

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by Kay Murchie

The fall in house prices and the squeeze on mortgage lending has led housebuilder Bellway to report a 30% fall in annual profits.

The group said profits before one-off items were £165.7 million, compared with £234.8 million the previous year.

The housebuilder has been hit by the housing slowdown and has seen its share price plummet by 52% in the last year. However, according to analysts, the group is in a stronger position than its rivals due to its focus on affordable and social housing.

According to John Watson, the group’s chief, there will be no let up in the housing market for at least a year. Mr Watson told Reuters that sales are tracking at a level around 50% below last year so a further fall in pre-tax profit and volumes is expected for the current year.

The Newcastle-based group sold 6,556 houses during the 12 months to the end of July, down 14% from the previous year.

Chairman, Howard Dawe, said cost cutting procedures will continue until conditions improve.

In an attempt to cope with the housing market slowdown, Bellway has reduced its workforce by 35% this year.

In related news, a survey from the Royal Institution of Chartered Surveyors (Rics) shows that estate agents sold, on average, less than one property per week each in September.

According to Rics, the number of properties being sold throughout the UK was the lowest since the survey commenced in 1978 and was 52% lower than in September 2007.