Business Week – Bellway still building up a profit.

Unlike many other companies on the London Stock Exchange, house-builder Bellway is looking positive ahead of its results next Tuesday.

The company has been upbeat about its results since releasing its interims in April. Chairman Howard Dawe told shareholders that, due to the strength of the market, the company was confident about the future.

He said: ‘Market conditions are good and there is a high level of interest from homebuyers.’

But he added: ‘The group’s rate of progress is being tempered by a lack of availability of homes to sell.

‘This is due to delays in the anticipated start dates of new developments caused by the protracted planning system and further exacerbated by the weather.’

The positive mood continued to the end of Bellway’s financial year, when the company said its expected results were ‘highly satisfactory’ and that it expected a ‘record turnover.’

According to Bellway: ‘The number of homes sold will be at a similar level to the previous year with a higher average selling price. ‘Bellway is trading well with a high return on capital employed compared to its peer companies. Demand for our homes remains strong.’

Chartered accountant Alan Robson has headed Bellway’s finances for 18 years and clearly enjoys his job.

Robson qualified as an accountant with Billsens, Cullen & Co. After qualifying, he joined Deloittes and has since held several senior positions with various companies, including Bovis Homes.

The negative sentiment experienced by most other companies in the UK – due to the downturn in the global economy – seems to have escaped the housing sector.

The market has been climbing, and in July the Nationwide Building Society warned growth rates were ‘unsustainable’.

In August, house prices rose again by 1.4%, making the average price of a home in the UK about #94,000.

But the future may not be as rosy as the past has been, as results for the housing market in September showed the market had stalled, with average house prices remaining the same as the previous month.

UK mortgage lender Halifax said: ‘We have been expecting a general slowdown in the UK economy to curb housing demand and result in an easing in house price inflation during the latter part of this year and into 2002.’

However, Robson said: ‘Bellway has not experienced a slowdown.’

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Interim results to January 31, 2001

Turnover: #278m

Average house price: #117,900

Cash outflow from ordinary activities: #46.2m

Profit after taxes: #24.6m

Executive directors: Howard Dawe, chairman, appointed August 1977

John Watson, chief executive, appointed August 1995

Alan Robson, finance director, appointed October 1983

Auditor: KPMG

Company profile: Growing out of a family owned construction business created in 1946, Bellway’s principal activity is the construction of houses, bungalows and flats but the company also provides properties to housing associations and inner city urban renewal projects.

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