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Bellway reveals profit hit from the pandemic but cheers recent housing demand

Covid-19 disruption has dented full-year sales and profits at Bellway, but the housebuilder has seen buying activity rebound since lockdown rules eased.

The FTSE 250 company was hurt when the housing market in March was effectively shut down at the start of the lockdown as people were urged to avoid moving, viewings stopped and a number of construction sites temporarily closed.

In the year to July 31 Bellway sold 7522 homes compared to 10,892 in the prior 12 months.

It suffered a number of one-off costs due to the pandemic, including for construction delays. The company also paid salaries throughout the crisis without using the government’s furlough scheme.

Pre-tax profits tumbled 64.3% to £236.7 million.

However, restrictions for the sector were eased in May, and in a move to boost the market, Chancellor Rishi Sunak in July announced a suspension of stamp duty on property sales of up to £500,000 until March 2021.

Bellway, which is building new homes in areas such as Barking, Bexleyheath and Greenwich, said trading in the first nine weeks of the new financial year has been robust.

Overall average week reservations have risen 30.6% to 239, and the forward order book stood at £1.9 billion as at October 4, compared to £1.3 billion a year earlier.

The board has proposed a final dividend of 50p per share, compared to 100p per share in 2019.

Bellway’s chief executive Jason Honeyman said: “Pent-up demand arising from the prolonged period of lockdown inactivity, together with Government support through the stamp duty holiday and provision of Help to Buy, have contributed to this reassuringly strong performance.”

But the housebuilder’s chairman Paul Hampden Smith pointed out the firm is mindful of economic uncertainty.

He said: “As the country emerges from the initial extended national 'lockdown' and adapts to ongoing restrictions at both a national and local level, there is substantial economic damage and an ongoing threat of a more widespread resurgence in the virus.”

He added: “In addition, we are yet to see the extent to which unemployment will rise as the unprecedented support offered by the Government's CJRS ends and is replaced with the Job Support Scheme.”

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