Interim Management Statement
4 December 2009
Following the announcement of the annual results on Tuesday 13 October, Bellway
is today updating the market as to its current trading position by issuing an
Interim Management Statement for the four months to 30 November 2009.
Although the comparative period of trading in 2008 was one of great weakness in
the housing market, the Board is pleased to announce that reservations taken in
the period 1 August to 30 November 2009 averaged 91 per week, 51% ahead of the
same period last year, and from an average of 176 sites, compared to 171 sites
in 2008. Cancellation rates have reverted to a more normal level of around 13%
with the average selling price of reservations taken some 16% ahead of the same
period last year. This increase is primarily due to product and geographical
mix but also reflects the weakness of the market at this time last year. Whilst
the market in and around London is more robust, the northern divisions are
still experiencing testing conditions. The Board anticipates that sales volumes
for the first six months ending 31 January 2010 will be 10% ahead of the same
period last year, and that an operating margin of 6% to 7% will be maintained.
Divisions are gradually increasing investment in new site openings and land
opportunities, having spent £64 million in the first four months on land,
predominantly in the south. With £36 million of net cash at the end of
November, our land teams are actively looking to secure further opportunities
at attractive margins.
Despite Government's best efforts to stimulate the housing market through a
variety of welcome initiatives, there remains a fundamental shortage of
mortgage lending on acceptable terms to potential homebuyers. Until this is
resolved and the threat of unemployment recedes, consumer confidence in many
parts of the country will remain, at best, fragile.
Bellway is still however well placed with 79% of the current 2009/10 sales
target already secured, at average prices ahead of management's expectations,
with a further 600 sales reservations secured for 2010/11. The operating margin
for the year is likely to be towards the higher end of the range of 6% to 7 %
given at the time of our preliminary announcement in October, should current
market conditions continue to prevail throughout 2010.
The next announcement from the Group will coincide with the Annual General
Meeting on Friday 15 January 2010.
Certain statements in this announcement are forward-looking statements which
are based on Bellway plc's expectations, intentions and projections regarding
its future performance, anticipated events or trends and other matters that are
not historical facts. Such forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts.
Forward-looking statements sometimes use words such as "aim", "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal", "believe", or other
words of similar meaning. These statements are not guarantees of future
performance and are subject to known and unknown risks, uncertainties and other
factors that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. Given these risks and
uncertainties, prospective investors are cautioned not to place undue reliance
on forward-looking statements. Forward-looking statements speak only as of the
date of such statements and, except as required by applicable law, Bellway plc
undertakes no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION PLEASE CONTACT:
JOHN WATSON, CHIEF EXECUTIVE & ALISTAIR LEITCH, FINANCE DIRECTOR FROM 7.30 AM
ONWARDS ON 0191 2170717