Interim Management Statement

Bellway p.l.c.                                 

                         Interim Management Statement                          

                                9 December 2011                                

                                                                               
                                                                               

Bellway is today issuing an Interim Management Statement (IMS) relating to the
period from 1 August to 30 November 2011.

 

At the time of its annual results' announcement on 18 October 2011, the Group
outlined its continuing strategy of increasing volumes, raising average selling
prices through changes in mix and achieving margin growth.  We have continued
to deliver this strategy despite the ongoing concerns over financial markets
and their implications for the UK economy.  Visitor levels and reservations
have been remarkably resilient, with the latter having increased by some 14%
when compared to the same period last year.  The average selling price of these
reservations has increased by almost 7%, reflecting the continuing changes in
mix.

 

The Group continues to utilise a variety of incentives to secure sales, however
encouragingly, the use of shared equity as an incentive has reduced to less
than 5% of reservations in the period compared to 10% last year.  In contrast
the part exchange of customers' existing homes is used in an increasing number
of transactions.

 

Our divisions continue to invest in land, having expended £71 million on land
and land creditors and contracted to acquire around 1,400 plots in the period,
resulting in modest net debt of £17 million.  With this further investment in
new land the number of trading outlets is expected to increase to around 215 in
early 2012, thereby facilitating the Group's aspirations of volume and
operating margin growth.  The Board anticipates that legal completions for the
six months ending 31 January 2012 will increase by around 5% and that the
operating margin for the same period will be at least in line with that
achieved in the second half of the previous financial year of just under 10%.

 

The Board is pleased to announce that it has renewed a £150 million bi-lateral
banking facility with one of its existing banking partners, Lloyds Bank
Corporate Markets, with no significant changes to banking covenants.  Bellway
now has combined facilities of £300 million which extend in tranches up to
November 2016.  The arrangement fee, of just over 1% of the new facility, will
be fully expensed in the six months to 31 January 2012.  The overall blended
margin on the new combined facilities remains competitive.  These bi-lateral
banking arrangements underpin the Group's ability to continue its disciplined
approach to land acquisition and provide funding certainty in the current
climate of volatile debt markets.  

 

The government continues in its attempts to stimulate the housing market and is
looking to address some of the issues surrounding higher loan to value mortgage
lending, albeit the detail and mechanics of their recent proposals are yet to
be determined.  Whilst the Group welcomes such initiatives, the outcome for the
full year will be dependent primarily upon consumer confidence, especially
during the spring selling season.

 

Notwithstanding the current backdrop of global and domestic economic
uncertainty, Bellway is well positioned to continue its three pronged strategy
of volume, average selling price and operating margin growth.  The order book
at 30 November is £458 million (2010:  £440 million) and the Group has secured
some 73% of its current annual target.  

 

The Chairman will make a brief statement at the Annual General Meeting on 13
January 2012 and a trading update for the six months ended 31 January 2012 will
be issued on 7 February 2012.

 

 

FOR FURTHER INFORMATION PLEASE CONTACT:

 

JOHN WATSON, CHIEF EXECUTIVE & ALISTAIR LEITCH, FINANCE DIRECTOR FROM 8.00 AM
ONWARDS ON 0191 217 0717

 

Certain statements in this announcement are forward-looking statements which
are based on Bellway p.l.c.'s expectations, intentions and projections
regarding its future performance, anticipated events or trends and other
matters that are not historical facts.  Such forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts.  Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", or other words of similar meaning.  These statements are not
guarantees of future performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements. 
Given these risks and uncertainties, prospective investors are cautioned not to
place undue reliance on forward-looking statements.  Forward-looking statements
speak only as of the date of such statements and, except as required by
applicable law, Bellway p.l.c. undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.