Bellway profit falls, cuts prices

By Paul Sandle

LONDON (Reuters) - House builder Bellway is cutting prices by 25 percent at some developments after an "unprecedented" decline in the housing and mortgage markets led to a 29 percent drop in full-year pretax profit.

Adjusted pretax profit fell to 165.7 million pounds for the year to the end of July, ahead of an average forecast of 164.1 million, according to a Reuters poll of 10 analysts.

Forward sales at September 30 were 49 percent down on the same time a year ago at 342 million pounds and Chief Executive John Watson said he saw no recovery in the housing market for at least a year.

"Sales are tracking at a level about 50 percent below (last year) so we are expecting a further fall in pretax profit and volumes for the (current) year," he told Reuters in a telephone interview.

The company made sales of 1.15 billion pounds for the 12 months to end-July.

Shares in the builder, which have lost 52 percent of their value in the last year, were up 2.7 percent at 495 pence at 0917 GMT, as analysts said the group's focus on affordable and social housing put it in a better position than some rivals.

"Forward sales are down sharply, however Bellway continues to focus on the more stable income stream of social housing where sales were up 50 percent," Grant Daniel at brokerage Finn Cap said in a note.

"If you believe in a housing recovery, Bellway has entered our buying zone; it is a well-run outfit at the bottom of the price point, with a strong landbank and healthy operating margins."