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Bellway profits tumble after land bank write-down

House builder Bellway has seen its pre-tax profit plummet 85 per cent after a £131 million write down in the value of its land bank.

Bellway’s full year results for the year ended 31 July showed pre-tax profits, after the write-down, of £34.8 million down from £234.8 million the previous year.

The company’s revenues also fell, dropping 15 per cent from £1.35 billion to £1.14 billion.

Bosses said the company had sold 6,556 homes over the past year, down from 2007’s record high of 7,638.

The average selling price of the homes fell to £169,700 from £173,300 in 2007.

The £130.9 million land bank write down equated to around 8 per cent of stocks as at 31 July.

Chairman Howard Dawe said: “In its long experience, the board has never witnessed such a swift change in the housing market as has been seen in the last twelve months.

“The board has a clear strategy, aimed primarily at conserving cash and reducing the cost base, whilst maintaining the essential operational fabric and protecting shareholder value so that growth may commence when the market returns to more normal conditions.

“The current state of the housing and mortgage markets has been well documented and the speed of the deterioration is unprecedented.

“Nevertheless, the group completed the sale of 6,556 homes, a fall of 14.2 per cent from last year's record level of 7,638.

“The board has a clear strategy, aimed primarily at conserving cash and reducing the cost base, whilst maintaining the essential operational fabric and protecting shareholder value so that growth may commence when the market returns to more normal conditions.”

Senior independent non-executive director Leo Finn will step down from the board on 16 January. He will be replaced by Mike Toms, non-executive director at UK Coal and former BAA director.