Last updated 21 October 2022
Bellway Group Plc
Bellway Group is one of the largest UK housebuilders. Based in Newcastle, the group operates nationally and has built more than 100,000 homes since it was formed in 1946. Today, Bellway employs around 3,000 people, sells more than 11,000 homes a year and turns over more than £3.5 billion annually.
Financials
After a 40% leap in the previous trading period as the group bounced back from the impact of the COVID-19 pandemic, Bellway’s turnover grew at a slower rate and profit ability suffered.
Revenue increased by 13% in the year to July 2021 to £3,536.8 million (2021: £3,122.5 million). Operating profits slumped to £309.0 million (2021: £479.7 million). At a pre-tax level, profits crashed by 36.5% to £304.2 million (2021: £479.0 million).
To view the financial for Bellway plc, visit Companies House and use Company ID 01372603.
Operations
Bellway operates regional offices in Durham, the East Midlands, Essex, Kent, Manchester, the North East, North London, the North West, Northern Home Counties, Scotland, South London, the South Midlands, South West, Thames Gateway, Thames Valley, Wales, Wessex, West Midlands and Yorkshire and opened a Scotland East branch in the summer of 2018.
The group operates three main brands – Bellway, Ashberry and Bellway London – and in the year to July 2022, completions surged to a record 11,198 homes (2021: 10,138 units). The national average selling price (ASP) firmed to £314,400 (2021: £306,500). The northern divisions sold 5,454 units (2021: 4,697 units) at an average selling price of £283,100 (2021: £275,900) and the southern divisions sold 5,744 units (2021: 5,441 units) at an ASP of £283,100 (2021: 275,900).
Glenigan Data
Glenigan’s data shows that in the 2021 calendar year, Bellway submitted 683 detailed planning applications planning applications for schemes of 10 or more units (2020: 69 applications). The total number of units in these applications was 12,061 units (2020: 10,081 units) and this ranked the group in fourth position in Glenigan’s top 50 ranking of housebuilders by planning pipeline (2020: third).
Conclusion: New challenges
After passing the 10,000-unit mark for the first time in 2018, Bellway’s growth continued into 2019 only to be hit by the impact of the coronavirus virus. While revenue growth resumed.
Growth on all key measures had slowed as wider economic uncertainty caused by Brexit hit the housing market. Complying with new regulations on cladding also cost and then the pandemic hit. Measures to reduce stamp duty and the end of the current iteration of Help to Buy helped housebuilders and Bellway’s turnover has surpassed the record level achieved in 2019 as completions leapt by 10.5% in 2022 but profitability suffered as the cost of post-Grenfell cladding and safety improvements leapt to £513.7 million.
The underlying operating margin has strengthened to 18.5% (2021: 17.0%) but the exceptional items pushed net cash down by over a quarter to £245.3 million (2021: £330.3 million).
In 2021, the group re-entered the land market and acquired a record 19,819 plots but this acquisition rate has slowed. Bellway continued to invest in land with £1.3 billion (2021: £1.1 billion) spent on 19,0889 plots (2021: 19,819 plots). The owned and controlled landbank rose to 62,106 plots (2021: 56,171 plots) and the total landbank strengthened to 97,706 plots (2021: 86,571 plots).
After a 5% fall in the previous year, Glenigan’s research shows that Bellway’s planning pipeline rebounding strongly by 20% in 2021, as priorities remained with developing more housing and larger schemes. The average detailed planning application submitted by Bellway contained 145 units (2020: 146 units).
Planning applications approved in 2020 include the development of 700 unit in Desborough in Northamptonshire (Project ID: 21192483) and 292 homes in the Campus East scheme in Welwyn Garden City (Project ID: 22189751).
Of those applications submitted in 2021, the proportion of units that were some form of house increased to 87% with the balance apartments (2020: 87% houses/13% flats). The total number of housing units in the pipeline leapt by 20% and the number of flats proposed rose by 19%.
The group is building larger schemes, mainly comprised of housing. In 2018, the average application contained 146 units (2017: 125 units) and 92% of units in detailed planning applications were some form of house and the balance apartments (2017: 87% houses/13% flats).
While the group has targeted slightly larger developments, there has been a focus on starter homes. At the end of 2014, Bellway was one of 30 housebuilders to sign up to the government’s new Starter Home initiative, which aimed to offer 100,000 first-time buyers’ new homes with a 20% discount by lifting planning costs and levies.
After nine years of successive growth in profits and turnover, Bellway was in a particularly strong position until 2020 and a notional target of pushing annual completions up to 11,000 a year was expressed by the management. This has been met despite the interruption of the virus, but the group faces a number of cost pressures from post-Grenfell remediation costs to the introduction of the Future Homes Standard in 2025 and rising labour and material costs.
With rising interest rates and living costs expected to hit the housing market, Bellway may struggle to meet the revenue and completion targets achieved in 2022 in the near future.
Winning Work With Bellway
Bellway aims to design, build and market its homes using local teams operating from regional offices which are managed and staffed by local staff. This allows the company to stay close to its customers and to take key decisions about design, build, materials, planning and marketing in response to local, rather than national, demands. Designers and other consultants tend to be local, helping create house designs with a strong regional identity in line with the local vernacular.
Details on the group’s work with the Supply Chain Sustainability School can be found here.
Key Procurement Contacts for Bellway
Group head of commercial systems – Lee Henderson, tel: 0191-482-8800
Email: lee.henderson@bellway.co.uk
Land director – Tom Harris, tel: 0191-482-8800
Email: tom.harris@bellway.co.uk
Group head of procurement – Adrian Hill, tel: 0191-482-8800
Email: adrian.hill@bellway.co.uk
Group purchasing manager – Ian Cryer, tel: 0191-482-8800
Email: ian.cryer@bellway.co.uk