TIDMBWY
RNS Number : 3013P
Bellway PLC
09 June 2020
Bellway p.l.c.
COVID-19 Update
Tuesday 9 June 2020
Bellway p.l.c. ("Bellway" or the "Group") is today issuing an
update in respect of the ongoing actions taken by the business in
response to the evolving situation presented by COVID-19.
Overview
-- Construction activity has recommenced on around 230 sites,
with a continuing focus on ensuring safe working practices, and on
those homes which are in the latter stages of production.
-- All remaining sales offices reopened in England on 1 June,
following the success of a trial beginning on 18 May. Viewings are
limited to single family groups and are on an appointment only
basis, thereby ensuring the wellbeing of our customers and
colleagues.
-- The balance sheet remains strong, with net bank debt of only
GBP157 million(2) at 31 May (2 June 2019 - GBP261 million) and
committed bank facilities of GBP545 million. In addition, although
undrawn, the Group has been confirmed as an eligible issuer for the
Government's Covid Corporate Financing Facility ('CCFF'), with an
issuer limit of GBP300 million.
-- The forward sales position is substantial, with an order book
comprising 6,038 homes (2 June 2019 - 6,312 homes) and a value of
GBP1,568 million (2 June 2019 - GBP1,643 million). This, together
with Bellway's responsible site re-opening programme, should enable
the Group to preserve its strong liquidity position in the months
ahead.
-- All furloughed employees have remained on full basic pay
throughout April and May and Bellway has no current plans to claim
grant using the Government's Coronavirus Job Retention Scheme
('CJRS').
Jason Honeyman, Chief Executive, commented:
"Our priority remains the health, safety and wellbeing of our
colleagues, customers and subcontractor workers. With this in mind
and following updated Government guidance with regards to
restarting the housing market, we have carefully and gradually
recommenced onsite construction and sales activity in England and
Wales, whilst introducing strict social distancing requirements.
This measured approach has enabled us to continue serving our
customers and has facilitated the safe return to work for many of
our employees."
A measured and responsible approach to site-based
construction
As previously reported, we began the process of resuming
construction activity on a phased basis on Monday 4 May, focusing
primarily on those properties in the latter stages of production.
This approach was designed to enable safe social distancing, with
initially only one tradesperson operating in a home at any given
time. In addition, it has enabled us to progress exchanged plots
through to completion, helping us to meet the expectations of
customers hoping to move into their new home, whilst supporting the
Group's liquidity position.
Following the success of this trial, Bellway has now restarted
construction activity on around 230 sites, although productivity is
reduced, and work is still primarily limited to those homes which
are nearing completion. Over the coming weeks, the careful
introduction of further social distancing working practices should
enable more than one tradesperson to work in a home at the same
time, albeit on separate floors. This will help to increase the
construction rate, whilst maintaining a safe onsite working
environment.
Re-establishing a sales environment which is safe for both
customers and colleagues
Bellway has maintained a telephone and online sales presence
since the onset of the crisis. Following the issuance of Government
guidance with effect from 13 May, we reintroduced a limited onsite
sales presence from 18 May. Strict protocols have been established
to ensure the safety of both our customers and sales personnel,
with show home viewings limited to single family groups and
strictly by appointment only, amongst other measures. Given the
success of this trial, the Group reopened the remainder of its
sales outlets in England, on a similar basis, from 1 June.
We remain committed to providing the highest levels of customer
care possible during the current situation and will respond to all
customer care calls and emails during this period. In addition to
limited home visits for essential maintenance work, we intend to
recommence home visits for more routine maintenance items,
gradually and safely, from mid-June.
Supporting our colleagues during the pandemic
Following our decision on 23 March to close sites, the Group
furloughed around 75% of its workforce, with this principally
comprising directly employed site tradespeople, site managers and
sales advisers. We have paid these employees full basic salary
throughout April and May. Although eligible, Bellway has not
applied for a grant using the CJRS and currently does not intend to
do so.
Except for Scotland, where government restrictions regarding
onsite activity remain in place, our phased and carefully executed
reopening plan has enabled us to provide a safe environment for our
site-based employees and subcontractors to return to work. In
addition, we are in the process of finalising new working practices
for our Head Office and divisional office-based employees, in order
that we can facilitate a gradual return from homeworking at the
appropriate time.
Trading update
In the period from 1 August 2019 to 31 May 2020, the Group
completed the sale of 6,721 homes (1 August 2018 to 2 June 2019 -
7,674 homes), including 708 which completed on or after 23 March
2020. Our order book remains substantial, with a value of GBP1,568
million at 31 May (2 June 2019 - GBP1,643 million) and comprises
6,038 homes (2 June 2019 - 6,312 homes).
Sales activity has remained restrained since initially closing
our sales centres, with the net reservation rate rapidly declining
to an average of 71 homes per week in the ten weeks from 23 March
to 31 May (25 March to 2 June 2019 - 231 per week). Pricing has
remained firm and our sales centre reopening programme is leading
to a gradual pick-up in customer interest. Notwithstanding this, we
expect year-on-year sales activity to be severely constrained until
a time when 'lockdown' restrictions are further lifted.
Funding and liquidity
The Group benefits from a strong balance sheet, with net bank
debt of GBP157 million(2) at 31 May (2 June 2019 - GBP261 million).
Following recommencement of onsite construction works, the total
amount payable to suppliers and subcontractors at 31 May is around
GBP65 million, with the majority of this expected to be paid by the
end of June. Land spend from 1 August to 31 May was GBP597 million
(1 August 2018 to 2 June 2019 - GBP677 million) and committed land
obligations for the remainder of the financial year are expected to
remain modest, at around GBP35 million. In general, new land buying
activity remains suspended, however, the Board continues to assess
individual land deals on their own merit. Given the reduction in
activity, our plans for opening new divisions have been
curtailed.
As previously reported, the Group has committed bank facilities
of GBP545 million and has been confirmed as an eligible issuer for
the CCFF, with an issuer limit of GBP300 million. The CCFF is
currently undrawn but remains in place as a prudent backup should
there by a prolonged period of economic inactivity.
Looking ahead
Given the ongoing uncertainty, financial guidance remains
suspended, however, the resumption of build programmes should
enable Bellway to slowly increase the number of completions
throughout the late summer and autumn months.
Our actions to date, together with our sizeable forward order
book and strong, asset backed balance sheet should ensure that
Bellway remains well positioned to emerge positively from this
period of uncertainty.
1 All figures relating to completions, order book, reservations,
cancellations and average selling price exclude the Group's share
of its joint ventures.
2 Net bank debt is cash plus cash equivalents, less bank debt.
For further information, please contact:
Bellway p.l.c.
Jason Honeyman, Group Chief Executive
0191 217 0717
Keith Adey, Group Finance Director
0191 217 0717
Media enquiries
Paul Lawler, Group Head of Communications
paul.lawler@bellway.co.uk
07813 392 669
Smithfield
Ged Brumby
gbrumby@smithfieldgroup.com
07540 412 301
Rob Yates
ryates@smithfieldgroup.com
07715 375 443
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.
This information is provided by RNS, the news service of the
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END
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