Bellway made the defects disclosure in its 2023 year results this morning, saying there was an ‘isolated design issue’ with the building’s reinforced concrete frame
The reinforced concrete frame defect was identified in an apartment scheme Bellway built 12 years ago in Greenwich, London, but was not named in the report.
Bellway said they intended to seek recoveries from firms involved in the scheme, as well as reviewing other buildings constructed by the same third parties involved with the reinforced concrete frame’s design.
At the time of writing, no further issues with similar reinforced concrete frame designs have been found.
Bellway expects building safety spending to increase by almost £50m
After signing the Government’s self-remediation contract, Bellway’s dedicated Building Safety division has so far completed nine developments and around fourteen more schemes are in progress or are due to commence before 2024.
Bellway expects to spend up to £80m in the present year ahead, compared with the £33m spent on building safety works in 2022.
Reports of concrete frame defects follow job losses for the company
Bellway finance director Keith Adey, confirmed another round of job cuts, this time of 150 axed roles from the 3,000 strong workforce.
Adey said: “Given the uncertain outlook, we have conducted a review of overheads during the year and continued with a freeze on recruitment.
“Two operating divisions have also been closed as part of our wider workforce planning, and it is anticipated that this difficult decision will result in a headcount reduction across the group of around 5%.”
Completions were resilient despite the tough conditions faced by the UK construction sector in recent months, Bellway’s 10,945 completed homes represented a drop of only 2%.
However, pre-tax profit for the year to July 2023 had dropped to 18% and underlying operating margin declining to 16% from 2022’s 18.5%, attributed to the effect of build cost and overhead inflation, extended site durations because of slower reservation rates and the increased use of targeted selling incentives.
Bellway stated they would be driving timber frame home delivery in an effort to keep up with cost inflation.
