Newcastle-based house building giant Bellway said on Wednesday its revenue rose 3.6% to £1.54 billion in the half year ended January 31, 2020 — but it warned the coronavirus will cause “significant risk to production capability and customer demand in the weeks and months ahead.”
Bellway said housing completions rose 6.3% to a record 5,321 homes in the period but half year profit before tax slipped 7% to £291.8 million.
“The unprecedented challenge and uncertainty presented by COVID-19 will result in a period of substantial disruption,” said Bellway.
“There is also a threat to liquidity across the wider economy and the board is therefore taking immediate action to preserve the strength and resilience of the balance sheet.
“This includes a pause in new site acquisitions and a re-prioritisation of production expenditure to focus on plots which are in the later stages of construction programmes.
“In addition, the decision to pay an interim dividend will be postponed until later in the calendar year, when there is more certainty with regards to the economic outlook.
“These measures are designed to preserve liquidity without impacting upon the long-term health and operational capacity of the business.”
In his outlook, Bellway CEO Jason Honeyman said: “Given the risks presented by COVID-19, it is difficult to predict the effect that they will have on completion numbers in the foreseeable future, although output for the full financial year will reduce compared to previous guidance.
“The group has a strong balance sheet with net cash at 31 January, low land creditors and committed bank facilities of £545 million, placing it in a strong position to withstand the likely disruption.”