Bellway launches London Partnerships arm

Aaron Morby 4 years ago
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House builder Bellway has launched a new housing partnerships business in London while it still looks for further regional expansion of its private homes business.

Bellway has the capacity to build 13,000 homes a year
Bellway has the capacity to build 13,000 homes a year

The house builder said the London Partnerships business was set to start construction on its first two sites this summer. 

Heads of terms have also been agreed on a further three sites and firm said its small team had already established good working relationships with several potential delivery partners. 

The first legal completions are expected in the second half of next financial year.

Bellway highlighted progress with the new business as it reported record interim results with pre-tax profit ahead 9% to £314m from revenue of nearly £1.5bn, up over 12%.

Chief executive Jason Honeyman said Bellway was still looking to expand regionally from its traditionally strong northern base despite wider industry concern about cooling in the top-end market because of Brexit.

He said that Eastern Counties business opened last month would begin to contribute completions in the second half of this financial year.

“Both the north and the south of the country have shown growth, with the strongest performances achieved in our Essex, Northern Homes Counties and East Midlands divisions, all of which have sold in excess of 350 new homes,” he said.

He added that Bellway’s existing structure of 22 operating divisions provided the capacity to deliver around 13,000 homes a year.

“The board sees the opportunity for further disciplined expansion beyond the existing divisional structure which, subject to market demand, should ensure that Bellway is well placed to continue its long term growth strategy and hence deliver significant value for shareholders.”

Completions rose 5.6% to 5,007 in the half-year ended 31 January 2019.

Honeyman said reservation in the first six weeks since the start of February had been strong, with an increase of 4.4% compared to the same time last year.

From a construction perspective, progress on site should enable Bellway to build up to 500 additional new homes this financial year, he forecast.

“The board, therefore, expects Bellway to deliver further growth in completions this year, although the extent of this will depend upon the outcome of the spring selling season.”

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