Bellway Homes has resumed paying a dividend on the back of a rapid recovery in house sales after reopening its sites in May.
The FTSE 250 housebuilder will pay a final dividend of 50 pence a share, it said on Tuesday, announcing its results for the 12 months to July 31.
The resumption of the payout comes against a backdrop of rebounding home sales. In the nine weeks from August 1, the number of buyers reserving Bellway homes was 239 a week, up 31 per cent compared with the same period in 2019. The company has £1.9bn worth of orders for new homes, compared with £1.3bn at the same point last year.
The reinstatement of the dividend “was a positive surprise”, said Aynsley Lammin, an analyst at Canaccord Genuity. “This sustains the group’s record of paying a dividend in every financial year since it was listed over 40 years ago. Recent trading has been strong and better than most had expected a few months ago,” he added.
Shares in the company rose 2.7 per cent on Tuesday morning to £26.98.
But Bellway warned that a full recovery could take years, as it revealed that pre-tax profits had fallen 64.3 per cent this year to £237m, after coronavirus forced the housebuilder to mothball operations for months.
Bellway said revenues were down 31 per cent to £2.3bn, with the number of homes it built falling by a similar proportion to 7,522.
“My best guess is it will take two to three years to get us back up to where we were,” said Keith Adey, Bellway’s finance director.
While sales in the past two months have been ahead of last year, the momentum from the summer — when the release of pent-up demand and the introduction of a stamp duty holiday led to a rise in transactions — has eased, the company said.
After the pandemic forced builders to down tools earlier this year, Bellway set aside £19m to cover the cost of extra health and safety measures and site closures.
The company also put aside £47m to cover the cost of fire safety improvements on some of its developments, which have come under closer scrutiny after the fire at Grenfell Tower in 2017 exposed the flaws of existing building safety regulations.
Properties built by other developers are also in need of assessment and potential remediation, with the issue potentially affecting hundreds of thousands of homeowners in England.
“It’s a very complicated area. The guidance continually evolves and the interpretation of the regulations evolves too,” said Mr Adey.