Newcastle-based house building giant Bellway said on Tuesday its revenue rose 40.3% to £3.12 billion in the year to July 31, 2021, only 2.8% below the record level achieved in financial year 2019.

Bellway said underlying profit before taxation rose 71.6% to £530.8 million compared to £309.3 million in the prior year and £662.6 million in 2019 before the pandemic.

The firm is proposing a total dividend per share of 117.5p compared to 50p in 2020 and 150.4p in 2019.

Bellway said its target is to generate “cumulative, underlying profit before taxation, of around £1.25 billion, over the next two financial years, with one-third of the after-tax amount to be returned to shareholders in dividend payments.”

Housing completions rose 34.8% to 10,138 (2020 – 7,522, 2019 – 10,892).

Bellway unveiled ambitious growth plans with a target annual output of 12,200 homes in financial year 2023, around 20% above the July 31, 2021, outturn.

The company reported year-end net cash of £330.3 million (2020 – £1.4 million, 2019 – £201.2 million) and committed debt facilities of £500 million as at October 18, 2021, and said this ensures that Bellway “retains strategic flexibility and can proactively respond to new investment opportunities.”

The Newcastle firm set aside a further net £51.8 million “to help owners of legacy apartment schemes undertake fire safety improvements.”

This brings the total amount provided since 2017 in relation to fire safety to £164.7 million.

Bellway reported a forward order book at October 3, 2021, with a value of £1.96 billion and a target growth in completions of around 10%, to over 11,100 homes for the year ending July 31, 2022.

“The average selling price for the full year ahead is expected to be around £295,000 (2021 – £306,479), with the moderation being a reflection of changes in product mix in advance of the change in Help-to-Buy rules,” said the company.

AJ Bell financial analyst Danni Hewson said: “Bellway is going for growth. Despite concern about the shape of the UK recovery there seems little sign of a buoyant housing market losing momentum yet and the company is positioning itself to take advantage.

“And despite hiking the dividend and buying up lots of plots of lands to lay the foundations for future expansion the company is still sitting on a tidy pile of cash.

“It also has an extremely healthy order book.

“There was some encouragement to be taken from the company’s commentary on supply chain issues with indications the soaring prices of raw materials is starting to ebb away.

“However, shortages could constrain the company’s growth ambitions at least in the short term.

“Bellway, based on its guidance, is expecting this to be a problem reserved to the first half of its current financial year but there is a risk that hopes for these pressures to alleviate in the second half prove forlorn.

“There is little sign at the moment that the removal of the stamp duty holiday, the more uncertain economic backdrop and cost of living crisis in the UK are having a tangible impact on the prospects for Bellway and other housebuilders.

“However, things could get tougher from here after what has been an impressive recovery from the pandemic.”

Bellway CEO Jason Honeyman said: “The board recognises that there are wider economic uncertainties because of Brexit and the continuing pandemic. 

“Notwithstanding these concerns, market conditions and customer confidence are strong, and the success of the vaccination programme is having a positive impact on the UK’s prospective economic performance. 

“In addition, our substantial order book and our strengthened land bank provide a solid platform for both future volume growth and margin recovery in the years ahead. 

“As a result, the board expects the group to increase output by around 10% to over 11,100 new homes in the year ending 31 July 2022, with growth weighted towards the second half of the financial year.

“Longer-term, the industry fundamentals remain strong.”