A limited number of sites will resume work next Monday, with a focused on properties in the later stages of construction and employing “strict guidelines for workers”.
Sales centres and show homes will remain closed for the foreseeable future, with customer contact maintained over the phone for all developments.
The FTSE 250-listed housebuilder said it completed 493 home sales on or after the 23 March UK lockdown date and has an order book currently worth £1.6bn, comprising of 5,976 plots.
A “modest number” of reservations have been made by phone since sales centres were closed on 23 March, but Bellway said it expected sales activity to remain “severely restrained” until sales outlets are reopened and the cancellation rate has shot up to 27%, measured as a percentage of the reduced reservation rate over the same period.
The Newcastle upon Tyne-based group has used government support to furlough around 75% of employees, mainly tradesmen, site managers and sales advisers.
This month the government reiterated its view that building sites should continue to operate, helped by new guidance published by the Construction Leadership Council and Public Health England.
Last week, rivals Taylor Wimpey was the first out of the blocks, saying it will start a staged re-opening of its sites in early May, with Vistry Group and Persimmon following to say their sites were beginning to open last week, with the latter impressing with news that it had received 820 gross private sales reservations in the five weeks since it closed its sites last month.
Bellway shares were searching for direction on Thursday morning at 2,798p, down 27% so far in 2020.
Analysts at UBS noted that over the nine months period to 26 April completions are down only 1.4% to 6,506 and with sites beginning to reopen gradually in May, their estimate for 38% decline in sales volumes in the second half “could be too negative”.
With the group having a £98mln net debt position versus £90mln in March and £229mln a year earlier, the Swiss bank noted that Bellway has been confirmed eligibility for access to £300mln on the Bank of England‘s Covid Corporate Financing Facility (CCFF) which “should further reduce liquidity concerns” on top of committed bank facilities of £545mln.
The analysts noted that epected cash outflows until July amount to around £260mln, comprising of £155mln of payments for works prior to site closures, £60mln land creditor unwind and £45mln of fixed monthly cost before any mitigation.
–Adds share price and broker comment–