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Bellway profits hit expectations

Bellway, the UK’s fifth largest housebuilder, has reported that sales for its 2010 financial year have fallen in line with expectations, despite the continued uncertainty in the construction sector.

According to the company, sales picked up only slightly following the traditional slow period over the summer, as people are waiting until the Government reveals its Comprehensive Spending Review.

Figures show that it made a pretax profit of £44.4 million in the 12 months to the end of July, an increase of 49 per cent from the £29.8m seen last year.

A Thomson Reuters poll of 12 analysts had predicted the figure would be between £41.4m and £49m, with the average suggesting profit levels would reach £44.3m.

During the financial year, it sold 4,595 houses, compared to 4,380 in the previous financial year - a 5 per cent increase, while average house prices for the period were £163,175, compared to £154,005 previously.

The increased number of sales, coupled with the higher average selling prices pushed turnover up to £768.3m, 12 per cent higher than the £683.8m a year earlier.

Weak house price data has reinforced suggestions that the housing market has slowed down.

Bellway chairman Howard Dawe said: “Sales in the early part of what is traditionally an active autumn selling period have picked up, albeit only slightly, following the usual summer lull.

“It seems that potential homebuyers are awaiting the outcome of the Comprehensive Spending Review.”

The group currently has net cash of £66m and will be investing in its land bank over the coming financial year.

In a statement accompanying the results, Bellway chief executive John Watson said: “Whilst the land bank of plots with planning permission has been slimmed down further from 19,260 to 17,602 plots at 31 July 2010, the Group has increased its land bank awaiting planning permission from 14,000 to 15,000 plots.”

“This pipeline has a high percentage of plots with outline planning permission and now, based on current volumes, our total land bank equates to a seven year supply.  Excluded from this are our long term holdings which amount to over 3,000 acres where presently some 2,800 plots have a positive planning status granted by the various planning departments who are currently assessing the effect of the new government’s localism agenda.”