Newcastle-based housebuilder Bellway plc said annual revenue dropped sharply, completing fewer homes for lower average selling prices as the UK housing market struggled. 

The company said it generated housing revenue of over £2.35 billion for the year ended 31 July, down from £3.4 billion the previous year, as housing completions reduced by 30% to 7,654 homes from 10,945 the year before. 

“While volume output was slightly ahead of previous guidance, the decline compared to the prior year reflected the lower forward order book at 1 August 2023 and the softer trading conditions, particularly in the first half of the financial year, although these are beginning to gradually improve,” the company said.

It said the overall average selling price decreased slightly to around £308,000 from £310,306 last year, driven by geographic and mix changes.    

Bellway, which is in talks to buy rival Crest Nicholson, said its underlying operating margin for financial year 2024 is expected to be around 10%, compared with 16.0% for 2023. “As previously guided, the reduction, in part, reflects the effect of lower volume output,” it said. “In addition, and as reported last year, there has been a decrease in site profitability, in line with expectations, arising from cost inflation, the use of sales incentives and the costs of operating outlets for extended durations.”

Jason Honeyman, Group Chief Executive, said: “Bellway has delivered a resilient performance in financial year 2024, and while we remain alert to future potential risks to customer demand and cost inflation, the good levels of customer enquiries and relative stability in reservation rates in recent months have been encouraging. The Bank of England’s cut to base rate earlier this month together with the current low levels of consumer price inflation provide a further underpin for improving customer confidence.”

“Against this positive backdrop, we welcome the new Government’s focus on addressing the ongoing shortfall of housing and its recognition of the importance of housebuilding to drive sustained economic growth. Bellway is encouraged by the Government’s plans to reform the planning system to support a marked increase in the supply of new homes across the country and we look forward to the publication of its long-term housing strategy in the coming months.”

“If market conditions remain stable, Bellway’s strengthened forward order book together with its healthy outlet opening programme and work-in-progress position provide an excellent platform to return to growth in financial year 2025.”