Bellway expects “material” fall in completions

Bellway completed 10,945 homes in the year to July 31, slightly down on 2022 (11,198), returning revenue of £3.4 billion (2022 - £3.52 billion).

However, the firm says that with “prevailing low reservation rates” legal completions are expected to decrease materially in the present financial year ending July 31 2024.

In a trading update for the year to July 31 2023 issued today the housebuilder said that the overall reservation rate in the year reduced by 28.4% to 156 per week (2022 - 218) with the private reservation rate decreasing by 35.9% to 109 per week (2022 - 170). Reservations were achieved from an average of 238 outlets (2022 - 242). The overall cancellation rate for the full year has trended upwards and averaged 18% (2022 - 13%), with the increase largely driven by softer private customer demand.

The underlying operating margin is expected to be around 16% (2022 - 18.5%), with the reduction reflecting the effect of build cost and overhead inflation, extended site durations and the increased use of targeted sales incentives.

Bellway said that the combination of strong volume output and the decrease in reservation rates resulted in a lower, “yet still …