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Bellway

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Bellway p l c
FormerlyGlobemaster Services Limited (1978–1979)[1]
Company typePublic
LSE: BWY
FTSE 250 component
IndustryHousebuilding
Founded1946
HeadquartersNewcastle upon Tyne, England, UK
Key people
John Tutte (Chairman)
Jason Honeyman (CEO)
RevenueDecrease £3,406.6 million (2023)[2]
Increase £505.3 million (2023)[2]
Increase £365.0 million (2023)[2]
Number of employees
3,130 (2023)[2]
Websitebellway.co.uk

Bellway p l c is a residential property developer and housebuilder based in Newcastle upon Tyne, England.[3] It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

History

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A Bellway development in Hampshire, England
A Bellway development in Clackmannanshire, Scotland
A Bellway home in promotional banners in Wetherby, West Yorkshire.

The company was founded in 1946 by John Thomas Bell and his sons, John and Russell, as a housebuilder operating in Newcastle upon Tyne under the name John T. Bell & Sons.[4] In 1951, Kenneth Bell, the youngest of the brothers, joined the business.[5] The three brothers also developed commercial property in the 1950s and their company, North British Properties, was floated on the London Stock Exchange in 1961. Two years later, North British acquired John T Bell via a reverse takeover.[6]

The Bell family managed to tap into the huge demand for private housing that followed the Second World War by promoting developments, such as Cramlington New Town, that were built in partnership with William Leech in the early 1960s.[7] Bellway developed a substantial housebuilding operation in the north of England and sales reached 1,500 units in 1972 with a further 500 in the newly formed Australian and French subsidiaries. In 1973, Bellway moved into the south-east with the purchase of A & R A Searle. The group continued to expand through the UK throughout the 1970s, however, its overseas operations proved to be less successful and were eventually closed.[8]

In 1979, the "Bellway" private housebuilding business was demerged from the commercial side of the firm under the leadership of Kenneth Bell. During 1981, Bellway and fellow Newcastle housebuilder William Leech announced their intention to merge, however, the move was called off days later, allegedly on account of to incompatibilities between the lifestyles of the two firms.[9] Diversification had not been wholly satisfactory; Ken Bell became largely non-executive and the day-to-day running of the business was assumed by Howard Dawe. Dawe reorganised the business, resumed the regional expansion on a more profitable basis and increased the company's focus on regeneration sites.[8]

During March 1990, Bellway opted to sell its plant hire subsidiary Blackett UK to Bruce Cook.[10] Later that same year, it recorded a profit of £11.11 million, a 34.7 per cent drop over the previous year; Kenneth Bell, the company's chairman, spoke out against the prospect of newly-privatised electricity suppliers increasing the connection charges to new properties.[11] In March 1991, the firm launched a £25 million rights issue,[12] however, shareholders only took up 52.3 per cent of the shares in Bellway on offer.[13] Nevertheless, the company had ample fiscal reserves throughout the early 1990s in spite of a recession.[14][15]

During 1996, Bellway Homes marked its 50th anniversary; that same year, it announced favourable sale figures, in terms of both volume and price.[16][17] One year later, Kenneth Bell died, ending the family's involvement with the company; Howard Dawe was quickly appointed as Bellway's acting chairman.[18] That same year, the firm recorded an above-expectation profit of £50.3 million, a rise of 56 per cent over the previous year; unit sales has also risen by 18 per cent to 5,002 homes.[18][19] Profits would continue to grow in the following year, a trend that was partially attributed to sustained rises property values and low interest rates.[20][21]

During February 1999, two of Bellway's worksites were picketed by bricklayers following a payment dispute with a subcontractor.[22] That same year, the company's finances were negatively impacted by site-based planning issues.[23] In October 2000, it was announced that pre-tax profit had risen 31 per cent to £89.1 million while turnover had rose to £634 million, up 25 per cent year-on-year.[24]

During early 2013, the firm's profits had reportedly risen by 50 per cent.[25] In March 2015, Bellway announced that profits were up 53 per cent; it also noted that the Help to Buy scheme had accounted for 23.8 per cent of all new reservation.[26] During the following year, its margins rose to 22 per cent.[27]

In March 2018, the company was reported to be on track to build 10,000 homes for the first time in its history; this increase in activity was attributed to low interest rates and good mortgage finance providing buoyancy to the housing market.[28] During 2019, Bellway announced that it was reducing its exposure to the London housing market in favour of developments outside of the capital, which were deemed to be more profitable.[29]

In common with other housebuilders, Bellway was adversely affected by the COVID-19 pandemic in the United Kingdom during 2020; in June of that year, it reported sales had fallen by more than two-thirds since the introduction of lockdown, and expected "year-on-year sales activity to be severely constrained until a time when 'lockdown' restrictions are further lifted."[30] one month later, it announced plans to cut up to 175 jobs, around 6% of its 3,100-strong workforce.[31] By August 2021, the firm's turnover had nearly returned to pre-pandemic levels,[32][33] profitability continued to rise into 2022.[34]

Amid a housing slump in August 2023, Bellway announced the closure of its London Partnerships and South Midlands divisions along with 90 redundancies.[35][36]

In February 2024, Bellway was among eight UK house-builders targeted by the Competition and Markets Authority in an investigation into suspected breaches of competition law. The CMA said it had evidence that firms shared commercially sensitive information with competitors, influencing the build-out of sites and the prices of new homes.[37][38]

In June 2024, Bellway's latest bid to acquire rival Crest Nicholson was rejected; it had made all-share proposals on 25 April and 14 May, the latter valuing the firm at £650m.[39] On 10 July 2024, the Crest Nicholson board said it was "minded to recommend" an improved Bellway takeover offer of £720m to the company's shareholders.[40] On 8 August, the two companies were given a further 12 days to finish their due diligence work regarding the proposed merger,[41] but Bellway called off its bid on 13 August 2024.[42]

Fire safety concerns

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A major fire broke out in July 2015 at a housing development constructed by Bellway in Canterbury, which destroyed and damaged 45 homes. An investigation launched in 2016 discovered problems in the fire separation constructed between the properties. Repairs to the development began in November 2018.[43]

In May 2019, a Watchdog investigation was screened on BBC One regarding the fire safety of Bellway and Persimmon plc homes. In the programme a surveyor visited an estate developed by Bellway after concerns about fire safety had been raised by a resident. The investigation found safety breaches in every property that was looked at due to poorly fitted fire barriers.[44]

On 9 June 2019, a fire took place at the newly built Samuel Garside House located in De Pass Garden, which was constructed by Bellway. Peter Mason, chair of the Barking Reach residents’ association had contacted Bellway prior to the fire expressing concern about the potential fire risk of the development, but was told not to worry.[45] London mayor Sadiq Khan described the fire as "shocking" and stated that it could have "easily resulted in fatalities".[46]

In June 2021, protesters picketed the Bellway offices in Prestwich and Beckton to demand that the company repair numerous fire safety issues which had been discovered in their properties. The safety issues left residents "living in fear" and unable to sell or remortgage their homes.[47][48]

In 2021, a number fire safety issues were found in Bellway's Lamba Court complex in Salford. A number of cavity barriers were found to be inadequately secured, missing or stuffed with plastic bubble wrap.[49] It was reported that some residents faced bankruptcy from the "ruinous costs" for the repairs and one resident spoke to the press about how the stress has taken a significant toll on her mental health.[50]

In October 2022, Bellway reported it had made provisions for post-Grenfell cladding and safety improvements totalling £346.2m in its latest results. Its cumulative total for such improvements was £513.7m.[51]

Operations

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The company achieved a 5 star rating in the 2015/16 Home Builders Federation new home customer satisfaction survey.[52]

References

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  1. ^ "Bellway P L C overview". Companies House. Retrieved 27 January 2024.
  2. ^ a b c d "Results for the year ended 31 July 2023" (PDF). Bellway. Retrieved 12 February 2024.
  3. ^ "Bellway PLC (BWY.L)". Yahoo Finance. Retrieved 21 March 2013.
  4. ^ Wellings, Fred (7 September 2006). British Housebuilders. Wiley. ISBN 9781405149181. Retrieved 23 March 2015.
  5. ^ "A reputation you can rely on" (PDF). Bellway. Retrieved 16 April 2017.
  6. ^ Company prospectus, January 1961
  7. ^ "No longer the pits". The Telegraph. 21 March 2003. Archived from the original on 11 November 2012.
  8. ^ a b Wellings, Fred (2006). Dictionary of British Housebuilders. Troubador. ISBN 978-0-9552965-0-5.
  9. ^ Building, June 1981
  10. ^ "30Mar90 UK: BELLWAY'S PLANT HIRE SUBSIDIARY BLACKETT UK HAS BEEN BOUGHT OUT BY RICHMOND-BASED BRUCE COOK (ROAD-PLANING)". constructionnews.co.uk. 29 March 1990.
  11. ^ "16Nov90 UK: BELLWAY ANNOUNCES 34.7% DROP IN PROFITS FOR YEAR TO JULY TO £11.11 MILLION". constructionnews.co.uk. 15 November 1990.
  12. ^ "29Mar91 UK: REDLAND, WILSON BOWDEN AND BELLWAY ANNOUNCE RIGHTS ISSUES". constructionnews.co.uk. 28 March 1991.
  13. ^ "10May91 UK: CASH CALL BLOW FOR BELLWAY AS SHAREHOLDERS TAKE UP ONLY 52.3% OF £25M RIGHTS ISSUE". constructionnews.co.uk. 9 May 1991.
  14. ^ "25Feb93 UK: BELLWAY SNAPS ITS FINGERS – FINANCING". constructionnews.co.uk. 25 February 1993.
  15. ^ "13May93 UK: HOUSING RECOVERY IS 'FRAGILE', SAYS BELLWAY". constructionnews.co.uk. 13 May 1993.
  16. ^ Coates, John (7 November 1996). "House builder sees its sales and prices rise in face of tough market conditions". constructionnews.co.uk.
  17. ^ Morby, Aaron (15 May 1997). "Westbury, Prowting and Bellway report firm recovery in sales and prices Strong demand for homes nationwide". constructionnews.co.uk.
  18. ^ a b Ahmad, Sameena, ed. (29 October 1997). "Bellway builds on housing recovery". The Independent. Archived from the original on 7 November 2008. Retrieved 8 October 2008.
  19. ^ "Bellways bumper performance". constructionnews.co.uk. 30 October 1997.
  20. ^ "Bellway sounds profits chimes". constructionnews.co.uk. 30 April 1998.
  21. ^ Fishlock, Bill (4 February 1999). "Good foundations for house builders City site". constructionnews.co.uk.
  22. ^ "Fights break out as bricklayers picket Bellway sites". building.co.uk. 19 February 1999.
  23. ^ "Planning delays hit Bellway profit". building.co.uk. 23 April 1999.
  24. ^ "Bellway grief as City ignores results". building.co.uk. 20 October 2000.
  25. ^ Hayman, Allister (26 March 2013). "Bellway profit up 50%". building.co.uk.
  26. ^ Mann, Will (25 March 2015). "Bellway profit up 53%". building.co.uk.
  27. ^ Withers, Iain (18 October 2016). "Bellway 'resilient' to Brexit as margins hit 22%". building.co.uk.
  28. ^ Curry, Rhiannon (20 March 2018). "Bellway nears 10,000-homes-a-year target for the first time". The Telegraph. ISSN 0307-1235. Retrieved 9 July 2018.
  29. ^ Champ, Hamish (15 October 2019). "Bellway shares dip as cost pressures loom". building.co.uk.
  30. ^ Gardiner, Joey (9 June 2020). "Bellway sales plummet since beginning of covid-19 lockdown". Building. Retrieved 9 June 2020.
  31. ^ Marshall, Jordan (23 July 2020). "Bellway starts redundancy talks with 175 staff". Building. Retrieved 23 July 2020.
  32. ^ Gardiner, Joey (15 June 2021). "Bellway upgrades price expectations as housing boom continues". building.co.uk.
  33. ^ Gardiner, Joey (10 August 2021). "Bellway full-year turnover approaches pre-pandemic level". building.co.uk.
  34. ^ Brown, Carl (29 March 2022). "Rising house prices and efficiency savings help Bellway profit jump". building.co.uk.
  35. ^ Prior, Grant (8 August 2023). "Bellway to cut jobs and close divisions in restructure". Construction Enquirer. Retrieved 8 August 2023.
  36. ^ Gardiner, Joey (8 August 2023). "Bellway to shut two divisions amid market 'slowdown'". building.co.uk.
  37. ^ Morby, Aaron (26 February 2024). "Competition probe launched into 8 major house builders". Construction Enquirer. Retrieved 26 February 2024.
  38. ^ Simpson, Jack (26 February 2024). "UK housebuilders investigated over possible sharing of price information". The Guardian.
  39. ^ Croft, Jane (14 June 2024). "UK housebuilder Crest Nicholson rejects £650m Bellway bid". Guardian. Retrieved 14 June 2024.
  40. ^ Gayne, Daniel (10 July 2024). "Crest Nicholson board 'minded to recommend' Bellway's improved £720m takeover offer to shareholders". Building. Retrieved 10 July 2024.
  41. ^ "Crest Nicholson given more time to vet Bellway's offer". The Construction Index. 8 August 2024. Retrieved 9 August 2024.
  42. ^ Marrs, Colin (13 August 2024). "Bellway calls off £720m Crest Nicholson merger bid". Construction News. Retrieved 13 August 2024.
  43. ^ "Construction faults in homes in Canterbury's Old Tannery fixed to improve fire safety". Kent Online. 22 November 2018. Retrieved 5 June 2020.
  44. ^ "'New-build homes not fire safe', BBC investigation finds". BBC News. 1 May 2019. Retrieved 5 June 2020.
  45. ^ "Barking fire: Investigation launched after blaze destroys 20 flats in east London". Telegraph. 5 June 2020. Retrieved 5 June 2020.
  46. ^ "Barking flats fire: Residents had safety concerns before blaze". BBC News. 10 June 2019. Retrieved 5 June 2020.
  47. ^ "Barking Riverside protesters target developer as part of national building safety crisis campaign". Barking and Dagenham Post. 7 June 2021. Retrieved 10 January 2022.
  48. ^ "Don't buy in Britain, cladding victims tell foreign investors". The Times. 6 June 2021. Retrieved 10 January 2022.
  49. ^ "'Just cladding, yet again': Gove urged to extend fire safety guarantee". The Guardian. 10 January 2022. Retrieved 10 January 2022.
  50. ^ "Flat owners are 'prisoners' in 'death trap' homes four years after Grenfell". The Metro. 14 June 2021. Retrieved 10 January 2022.
  51. ^ Prior, Grant (18 October 2022). "Bellway sees post-Grenfell building safety bill hit £514m". Construction Enquirer. Retrieved 20 October 2022.
  52. ^ "National new home customer satisfaction survey" (PDF). Home Builders Federation. Archived from the original (PDF) on 16 June 2017. Retrieved 2 May 2017.
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