Working capital tempo places Bellway into net debt

Bellway has reported net debt of £57m in its latest trading update for February-June, compared with £42m in net cash for the same period in 2023.

In a trading update, the housebuilder said its debt value – cash and cash equivalents, minus debt financing – reflected normal working capital requirements to deliver its construction targets during the current financial year ending 31 July.

Bellway also announced it was on track to deliver around a third fewer homes than in the last financial year – targeting 7,500 homes, down from 10,945.

Despite a difficult short-term picture, the housebuilder forecasted that it would return to growth in the 2025 financial year as demand for housing creeps up from recent lows.

Its forward order book increased from 4,411 homes at the start of the financial year to 5,346 as of last Sunday (2 June). This still represents a fall from this time last year, when Bellway reported an order book of 6,172 homes.

Wage increases and calming mortgage interest rates and consumer price inflation is improving the affordability of housing, directors wrote.

They said: “The long-term housing market fundamentals remain positive, and we are hopeful these will be bolstered by greater clarity over planning and housing policy beyond the upcoming general election.”

The firm also reported good availability of building materials and subcontractors, with cost inflation on new tenders less pronounced than in recent years.

However, Bellway noted its income in the near future will still be impacted by earlier cost inflation on ongoing projects.

It also predicted a short-term impact on trading due to political campaigning ahead of the 4 July general election.

Bellway chief executive Jason Honeyman said: “We reiterate our confidence that the group’s robust balance sheet and operational strength, combined with the depth of our land bank, will enable Bellway to successfully capitalise on future growth opportunities.”

The firm’s full-year results, covering the financial year to 31 July 2024, are expected on 9 August.

Source link

About The Author

Scroll to Top