Bellway PLC (LON:BWY), the housebuilder, has cautioned that incremental costs due to coronavirus (COVID-19) restrictions on construction will affect profits this year and going forward.
"Incremental costs, arising from extended site durations due to reduced productivity and enhanced health and safety requirements, will result in a lower anticipated gross margin across our sites," the firm said in an update for the year ended July 31, 2020.
All sales sites have now reopened, added Bellway, but over the year completions fell by 31% to 7,522 houses due to the enforced COVID-19 closures.
Reservations are now running at 140 per week compared to 162 a year ago and 211 before the lockdown.
Average selling prices have held steady, the group said, at £293,000 (£292,000) while the order book comprises 6,588 homes worth £1.76bn.
As well as additional coronavirus costs, Bellway noted that the industry is seeing rises in general of only around 3% with London and the South East the most affected.
Bellway said it has not drawn on the government’s furlough scheme instead it is paying employees from its own funds and net cash has dropped to £1mln from £201mln, but the builder said it had access to £845mln of bank and government facilities.
The company added that it is keen to resume dividend payments when there is more certainty over the trading outlook.