Bellway p.l.c.
Annual Report and Accounts 2021
About Us
Financial and Strategic Summary
In This Report
About Us
IFC Financial and Strategic Summary
IFC
In This Report
01 Who We Are
30
Investment Case
Strategic Report
04 Principal KPIs
06 Chairman’s Statement
10 A Snapshot of 2021
12
Business Model
20 Key Stakeholder Relationships
28 Our Marketplace
31 Our Strategy
36 Chief Executive’s Market and Operational Review
40 Group Finance Director’s Review
45 Better with Bellway
48 Principal Risks
52 Risk Management
56 Corporate Responsibility
67
Task Force on Climate-related Financial Disclosures (TCFD)
Governance
70 Board of Directors and Group General Counsel
and Company Secretary
72 Chairman’s Statement on Corporate Governance
74
Board Leadership and Division of Responsibilities
78 Nomination Committee Report
80 Audit Committee Report
90 Remuneration Report
111 Directors’ Report
115
Independent Auditor’s Report
Accounts
123 Accounts Contents
124 Group Income Statement
124 Group Statement of Comprehensive Income
125 Statements of Changes in Equity
127 Balance Sheets
128 Cash Flow Statements
129 Accounting Policies
131 Notes to the Financial Statements
Other Information
163 Alternative Performance Measures
166 Five Year Record
167 Glossary
169 Advisers and Group General Counsel and Company Secretary
170 Shareholder Analysis
170 Financial Calendar
Notes:
Throughout the Annual Report and Accounts, the following note references apply:
1. Bellway uses a range of statutory performance measures and alternative performance
measures when reviewing the performance of the Group against its strategy. Definitions of
the alternative performance measures, and a reconciliation to statutory performance
measures, are included in note 29.
2. All figures relating to completions, order book, reservations, cancellations and average
selling price exclude the Group’s share of its joint ventures unless otherwise stated.
3. As measured by the Home Builders’ Federation Customer Satisfaction survey.
4. Underlying refers to any statutory performance measure or alternative performance
measure before net legacy building safety expense and exceptional items (note 2).
Group revenue (£m)
£3,122.5m
+40.3%
3,213.2
3,122.5
2,225.4
2019
2020
2021
Profit before taxation (£m)
662.6
£479.0m
+102.4%
2020
479.0
236.7
Average selling price (£)
£306,479
+4.6%
Order book value as at
31 July (£m)(1)
£2,022.3m
+14.9%
Plots contracted in the
year (plots)(5)
19,819 plots
+63.5%
Total owned and controlled
land bank (plots)(6)
56,171 plots
+24.7%
2019
2020
2021
291,968
293,054
306,479
2020
2019
2020
2021
2,022.3
1,760.2
1,223.9
2019
2020
2021
19,819
13,284
12,124
2019
2020
2021
56,171
42,993
45,061
2019
2020
2021
5. Includes the Group’s share of land contracted through joint venture partners comprising
882 plots (2020 – 203 plots, 2019 – 171 plots), with a contract value of £39.2 million (2020 –
£15.3 million, 2019 – £5.7 million) across two sites (2020 – 1 site, 2019 – 1 site).
6. Includes the Group’s share of land owned and controlled through joint venture partners
comprising 938 plots (2020 – 472 plots, 2019 – 272 plots).
7. Comparatives are for the year ended 31 July 2020 or as at 31 July 2020 (‘2020’) or are for
the year ended 31 July 2019 or as at 31 July 2019 (‘2019’) unless otherwise stated.
Who We Are
Building homes to be proud
of by putting customers at the
heart of everything we do.
Bellway is committed to being a
responsible homebuilder, operating
our business in an ethical and
sustainable manner whilst
creating long-term value for the
benefit for our customers, people,
suppliers, shareholders and the
wider community.
Better with
For further details on our business please visit:
www.bellwayplc.co.uk
Bellway p.l.c. Annual Report and Accounts 2021
01
About UsAbout Us Who We Are
Our locations
Divisional structure
Our brands
8,727
Homes sold
Bellway is our main brand. Bellway began as a small
family business in 1946, with a passion for building high
quality homes in carefully selected locations inspired by
the needs of families. To this day, we maintain these same
core values, combining our decades of expertise with the
local personalised care that Bellway is known for.
693
Homes sold
The Ashberry brand was launched in 2014 and is offered
on larger sites, typically alongside our Bellway brand,
to provide two differentiated outlets, using different
elevational treatments and internal layouts, and therefore
offering greater customer choice. This has the advantage
of improving sales rates, often more than can be achieved
through using two Bellway outlets, with a resultant
improvement in return on capital employed (‘RoCE’).
718
Homes sold
Bellway London was launched in 2018 to provide the
London market with a modern and consistent identity
that is recognisable across the capital. This covers all our
developments in London boroughs, with our main focus
being outer London boroughs and commuter towns
within the M25. Properties range from one-bedroom
apartments to four-bedroom houses.
Mature divisions
Newer divisions
Not to scale
We currently operate from 22 divisions covering the main
population centres across England, Scotland and Wales.
Our divisional structure allows local management
teams to respond to specific demands in their area and,
through their detailed local knowledge, acquire land on
which to design and build homes that meet or exceed
the expectations of our customers and contribute to
creating strong local communities.
The divisional teams are supported by our Regional
Chairmen and by our specialist Group teams.
Bellway p.l.c. Annual Report and Accounts 2021
02
About Us Investment Case
Bellway’s strategy is to grow
shareholder value through
sustainable and disciplined
volume growth, utilising the
Group’s operational and balance
sheet capacity combined with
a strong focus on RoCE.
5 STAR HOME BUILDER
CUSTOMER SATISFACTION
5-star homebuilder(3)
Rating from the Home Builders’ Federation
Customer Satisfaction survey
Our capacity for growth
Despite the wider economic uncertainty because of Brexit
and the continuing pandemic, Bellway is in a robust position,
with a motivated and dedicated workforce. We benefit from
a strong, ungeared1 balance sheet, a record order book and
have the capability to respond to evolving market conditions.
Our underlying operational strength and focus on quality,
together with a conservative and responsible approach
to managing the business, will serve the Group well over
the longer-term.
Our award-winning homes
We build high quality homes designed to complement the
style of existing local architecture in communities that meet
local demand and enhance the area in which they are built.
With a range that extends from one-bedroom apartments
to six-bedroom family homes, we offer an extensive choice
from which customers can choose a property that meets their
individual requirements. We also provide homes to housing
associations for social housing.
Our focus is to provide desirable, traditional family housing
across all our divisions and in addition provide apartments
in the more affordable outer commuter zones of London.
Our business
We are committed to being a responsible homebuilder.
Our aim is to operate our business in an ethical and
sustainable manner while at the same time building attractive,
desirable and sustainable developments in which customers
want to live, in harmony with existing communities.
As one of the UK’s largest homebuilders, we have an important
role to play in addressing the national housing shortage by
building high quality homes in desirable locations. We work
with a range of stakeholders to build trust so that we can fulfil
this role whilst at the same time operating our business in a
socially responsible, ethical and sustainable way.
Our people
Our people are the key to our success and we aim
to provide them with a rewarding and fulfilling career.
Bellway has long had a reputation as a good employer,
taking an interest in its workforce and supporting
career development. As a result, many employees have
spent a large proportion of their working lives with us.
However, we are not complacent and strive to be an
employer of choice.
Our customers
We pride ourselves on understanding the aspirations of all
of our customers, not just in the type of home that suits their
needs, but the environment in which they want to live. All of
our customers are treated to the same high level of customer
service. Our high standard of service and build quality is
endorsed by our customers, with 9 out of 10 customers saying
they would recommend Bellway to a friend buying a new
home. Our new Customer First initiative drives improvements
to quality and works to develop and share best practice across
the Group to further enhance our service to customers.
Bellway p.l.c. Annual Report and Accounts 2021
03
About UsAbout Us Principal KPIs
The Group has ten principal KPIs, which are shown below. Our secondary
performance measures, which support these KPIs, are shown on pages 14 to 18.
Number of homes sold (homes)
10,892
10,138 homes
+34.8%
7,522
10,138
Net asset value per ordinary
share (p)(1)
2,372
2,427
2,664
2,664p
+9.8%
This KPI demonstrates how well the business model is able to support the
Group’s strategy of delivering volume growth.
The Directors consider net asset value per ordinary share (‘NAV’) to be a useful
proxy when reviewing whether shareholder value, on a share by share basis,
has increased or decreased in the period.
2019
2020
2021
2019
2020
2021
Operating profit (£m)
£479.7m
+92.6%
674.9
479.7
249.1
Underlying operating
profit (£m)(1) (4)
£531.5m
+65.2%
R
674.9
531.5
321.7
Operating profit is another measure of how efficiently the business is being operated and of the profitability of the Group’s core business. The underlying operating
profit is one of the measures used to determine the Directors’ annual bonus payment. Underlying operating profit is before net legacy building safety expense and
exceptional items.
2019
2020
2021
2019
2020
2021
Operating margin (%)(1)
21.0
15.4%
+420bps
Underlying operating
margin (%)(1) (4)
21.0
15.4
11.2
17.0%
+250bps
17.0
14.5
Operating margin demonstrates how efficiently the business is being operated. Underlying operating margin is before net legacy building safety expense and
exceptional items.
2019
2020
2021
2019
2020
2021
Return on capital
employed (%)(1)
15.2%
+690bps
24.7
Underlying return on capital
employed (%)(1) (4)
24.7
15.2
8.3
16.9%
+610bps
16.9
10.8
Return on capital employed (‘RoCE’) is a key indicator of how we are delivering our strategy of building shareholder value, which is reliant on land acquisition and
the subsequent performance of our developments. Underlying RoCE uses the underlying operating profit as defined above.
2019
2020
2021
2019
2020
2021
Earnings per ordinary share (p)
437.8
316.9p
+102.4%
Total dividend per ordinary
share (p)
150.4
316.9
156.6
117.5p
+135.0%
117.5
50.0
Earnings per ordinary share (‘EPS’) is a useful measure of how profitable
Bellway is, year on year.
This is another useful indicator of how the Directors are delivering the strategy
of generating shareholder value, particularly when combined with NAV. Note
that the 2021 final dividend figure is proposed.
2019
2020
2021
2019
2020
2021
Bellway p.l.c. Annual Report and Accounts 2021
04
Strategic Report ESG KPIs
The Group has nine ESG related KPIs, which are shown below. Further information
in relation to these KPIs are included in the CR section pages 56 to 66.
Tonnes of carbon emissions
per legal completion (tonnes)
2.8
2.4
Percentage of
renewable electricity (%)
69.2
1.9 tonnes
(0.9 tonnes)
1.9
69.2%
+4,510bps
24.1
13.4
Demonstrates how the Group is working towards reducing our carbon
emissions.
This KPI demonstrates the Group’s commitment to using renewable energy
in the build process.
2019
2020
2021
2019
2020
2021
Tonnes of waste per
home built (tonnes)
8.9 tonnes
(2.3 tonnes)
11
11.2
8.9
Percentage of waste diverted
from landfill (%)
98.4
99.1
99.4
99.4%
+30bps
Shows the Group’s commitment to efficient build methods
and reducing waste.
Indicates the Group’s commitment to diverting waste from the build process
from landfill.
2019
2020
2021
2019
2020
2021
CRUK fundraising total (£m)
£1.95m
+£359k
1.60
1.28
1.95
Percentage of staff in earning
and learning roles
8.3
8.5
8.5%
+20bps
6.1
Indicates the cumulative fundraising total for our charity partner Cancer
Research UK.
This KPI highlights the Group’s commitment to investing in our people.
2019
2020
2021
2019
2020
2021
RIDDOR incident rates
324.9
336.5
Employee engagement
survey response rate (%)
72
336.5
+133.4
203.1
72%
2019
2020
2021
n/a
n/a
2019
2020
2021
Number of RIDDOR seven-day reportable incidents per 100,000 site operatives
(accidents). A measure of the Group’s health and safety performance.
This KPI shows the percentage completion rate of the employee survey
(launched for the first time in 2021).
5-star homebuilder(3) score (%)
92.6
92.3
93.5
93.5%
+120bps
R
Link to remuneration
See pages 90 to 110.
This KPI shows the percentage of buyers who would recommend Bellway
to a friend.
2019
2020
2021
Bellway p.l.c. Annual Report and Accounts 2021
05
Strategic ReportStrategic Report Chairman’s Statement
Introduction
Bellway has delivered a strong set of results and, despite the
ongoing global pandemic, is well on the road to recovery.
The positive response and actions from our colleagues,
subcontractors and suppliers have helped the Group
complete the sale of 10,138 homes (2020 – 7,522, 2019 –
10,892), restore housing revenue to just 2.3% below the pre-
pandemic level and increase earnings per share by 102.4%
to 316.9p (2020 – 156.6p, 2019 – 437.8p).
Our people
It is the hard work, dedication, and efforts of those who have
worked for, and with, Bellway over the past year, that have
enabled us to achieve this strong performance. On behalf
of the Board, I would like to express our gratitude to all
those who have contributed to this result, for their resilience,
ongoing commitment, and their support for the continuous
evolution in working practices.
Strategic priorities
The past financial year has been a period over which
the Group has enjoyed a strong recovery, with housing
revenue restored very close to 2019 levels and our land bank
strengthened because of our front-footed, but responsible
approach to investment.
The balance sheet is solid, and we retain our strong
operational focus, with health and safety, quality, and
customer service all integral to our culture and at the forefront
of our business. We look to the new financial year with
optimism, as we set out our three strategic priorities:
1. Volume growth
2. Value creation for shareholders
3. Better with Bellway
Our approach to responsible and sustainable
business practices, for the benefit of
all stakeholders.
The Group is recovering
well from the pandemic and
looking ahead, Bellway is
in a robust position, with a
motivated and dedicated
workforce.
Paul Hampden Smith
Chairman
Highlights
Total dividend (p)
NAV (p)(1)
117.5p
(2020: 50.0p)
2,664p
(2020: 2,427p)
Bellway p.l.c. Annual Report and Accounts 2021
06
Strategic Report Volume growth
The long-term housing market fundamentals continue to be
favourable. There remains a shortage of affordably priced,
good-quality housing across many parts of the country and
the planning environment is positive. There is a sustainable
supply of mortgages, and this, together with the long-term
prospect for low interest rates, ensures that finance for new
homes remains both accessible and affordable.
Set against this backdrop, Bellway has an established and
mature operating structure, with a widespread geographical
presence, comprising 22 divisions across England, Scotland
and Wales. This strong, nationwide platform provides
extensive local market knowledge and the base from which
to acquire land, source subcontractor labour and respond to
localised sales demand. It has enabled Bellway to operate as
the fourth largest housebuilder in the country for many years,
with a current volume output of more than 10,000 homes
per annum. This is some 35% to 45% lower than the recent
peak output of our larger, national peers, providing scope for
Bellway to continue to grow and take a larger share of the
overall housing market.
In the context of these positive, broader market dynamics,
Bellway has the capacity, over several years, to significantly
increase volume output to between 16,000 and 18,000
homes per annum, with the growth rate in any given year
determined by customer demand, ongoing positivity in the
mortgage market, and access to good quality land. This is
beyond our previous target of 14,000 homes, principally
because of the strong long-term market fundamentals and
our capacity, both financially and operationally, to open
new divisions and make further investment in areas of
strong demand.
In the shorter-term, the Board are targeting growth of around
20% above the 31 July 2021 outturn of 10,138 homes, with an
annual output of around 12,200 new homes in financial year
2023. Principally, this can be achieved because of our record
land investment over the past twelve months, which will lead
to outlet growth as the newly acquired sites are advanced
through the planning system. The growth in outlets will also
help to place Bellway in a good position to mitigate the end
of the Help-to-Buy scheme in March 2023. While ambitious,
our two-year volume target is considered and reflects the
strength of our underlying business, the magnitude of
our sizeable order book and the ongoing success of the
COVID-19 vaccine roll-out.
Value creation for shareholders
Crucial to the success of our volume growth strategy is our
ability to deliver value for shareholders. The Board believes
that value generation is best evaluated through capital
growth, by increasing the net asset value per share (‘NAV’),
together with the payment of a regular dividend.
For the year ended 31 July 2021, NAV rose by 9.8% to 2,664p1
(2020 – 2,427p, 2019 – 2,372p), a reflection of the recovery in
earnings. In addition, because of our strong balance sheet,
the Board is delighted to recommend a 65.0% increase in the
final dividend to 82.5p per share (2020 – 50.0p, 2019 – 100.0p).
This means that the proposed total dividend for the year will
increase by 135.0% to 117.5p per share (2020 – 50.0p, 2019 –
150.4p), with the interim dividend in the prior year cancelled
due to uncertainty at the time, because of the pandemic.
If approved, the overall dividend will be covered 2.7 times1
by total earnings (2020 – 3.1, 2019 – 2.9) and 3.0 times1,4 by
underlying earnings (2020 – 4.1, 2019 – 2.9).
Given the growth potential in the business, reinvesting
capital into attractive, high-return land opportunities will
generate strong, compounding returns in the years ahead.
This will be balanced with a regular shareholder cash
distribution, through an ongoing dividend, with the Board
broadly expecting to maintain an annual, ordinary dividend
cover of around three times underlying earnings1,4 for the
foreseeable future.
Over the next two years, the value for shareholders arising
from this approach will not only be influenced by volume
growth, but also the ongoing operating margin recovery,
driven by recent, higher margin land acquisitions and
our programme of commercial, cost saving and value
engineering initiatives. At the same time, there will be some,
previously highlighted, dilutive effect on the average selling
price, as the Group continues to strategically reposition itself
to offer an affordable mix of product, in advance of the expiry
of the Help-to-Buy scheme in March 2023.
Taking these factors into consideration, the Board expects
Bellway to generate around £1.25 billion1,4 in cumulative,
underlying profit before taxation over the next two financial
years, with approximately one-third of the after-tax amount to
be distributed to shareholders.
Bellway p.l.c. Annual Report and Accounts 2021
07
Strategic ReportStrategic Report
Chairman’s Statement continued
Better with Bellway
Our growth strategy is a long-term ambition, the success of
which requires us to engage positively with our colleagues,
subcontractors and supply chain partners in order to safely
deliver a high-quality product, that is appealing to our
customers.
Integral to our culture is our responsible approach to
business and in that regard, we are developing ‘Better
with Bellway’, a new long-lasting initiative, led by Executive
Management and overseen by the Board. Not only will this
add momentum to the many positive activities we already
undertake, which benefit our wider stakeholder groups, but it
will also spearhead our campaign to adopt more sustainable
and responsible, long-term business practices.
We are delighted to have retained our status as a five-star
homebuilder3 for the fifth consecutive year, demonstrating
our commitment to quality and customer service. We also
continue to act responsibly with regards to fire safety and
have put aside an additional net £51.8 million to deal with
legacy building safety issues on apartment schemes.
More widely, adopting sustainable business practices and
exerting a positive influence on our stakeholders and the
environment, is not only responsible, but it also sets a solid
foundation for the future financial and operational success of
Bellway. The Board has initiated a holistic review of Bellway’s
approach to sustainability, engaging with a wide range of
stakeholders to understand their priorities, to determine
how our approach can be improved. This review will be
completed within the next financial year, but the intention is
that our response to environmental, societal and governance
(‘ESG’) matters will be brought together under the ‘Better with
Bellway’ banner.
‘Better with Bellway’ will become an integral feature of our
approach to business and will be embedded within our
core operational processes. We will start by building upon
our existing, strong culture and traditions to establish a set
of ESG priorities, which are core to day-to-day operations.
These will incorporate existing initiatives such as ‘Customer
First’, our programme to further improve quality and customer
service, our goal to become an employer of choice and our
responsible stance towards legacy building safety issues.
In addition, our ‘Better with Bellway’ framework will also
be broadened to consider wider aspects of the business.
Importantly, we have commenced the process of measuring
our Scope 3 carbon emissions so that we can set meaningful,
science-based carbon reduction targets. Our intention is not
just to comply with ambitious regulatory requirements arising
from the Government’s Future Homes Standard, but also to
look at the feasibility of pursuing other opportunities, within
our business, to further reduce carbon emissions.
During 2022, we will publish science-based carbon reduction
targets, which will build upon the success we have already
achieved over the past three years, in reducing Scope 1 and 2
carbon emissions.
Our sustainability strategy will continue to evolve as we gain
knowledge and fully embed ‘Better with Bellway’ across our
sites and divisions. Over time though, we fundamentally
believe that our responsible approach is the right one to
ensure the long-term future success of the Group and to
contribute to strong, ongoing financial returns.
We will report upon progress and priorities in the next
financial year and will also look to develop and publish
appropriate KPIs to measure performance against our targets.
Future long-term success
The Group is recovering well from the pandemic and looking
ahead, Bellway is in a robust position, with a motivated and
dedicated workforce. It benefits from a strong, ungeared1
balance sheet, a record order book, and a strengthened
land bank. Our focus on quality, our responsible approach
to business and our capacity to expand, lay the foundations
for long-term, sustainable volume growth. I am therefore
confident that our three strategic priorities of volume
growth, value creation for shareholders, and our ‘Better with
Bellway’ approach to sustainability, will continue to ensure
the ongoing and long-term success of Bellway and its
stakeholders.
Paul Hampden Smith
Chairman
18 October 2021
Bellway p.l.c. Annual Report and Accounts 2021
08
Strategic Report
Better at creating
outstanding properties
Ottermead in Ponteland, located on the site of
the former Northumbria Police Headquarters is
a mixed development, featuring a collection of
Grade II listed buildings and new build homes.
The collection of Grade II listed buildings have
been sympathetically restored and redeveloped
to create beautiful family homes, while retaining
some historical internal features.
Better with
Bellway p.l.c. Annual Report and Accounts 2021
09
Strategic ReportStrategic Report A Snapshot of 2021
An exciting year
for Bellway...
2
1
3
1. A strong year for land acquisition
Bellway has invested a record amount in new sites during
the year. This reflects the strong demand for good quality
housing and has resulted in a strengthened land bank,
providing a solid platform for ongoing growth and margin
improvement in the years ahead.
The focus has been on acquiring land in desirable locations
with high customer demand, where the product is affordable
in the context of local market conditions.
The contract value of plots acquired is £1,066.0 million5
(2020 – £777.7 million) and the anticipated gross margin,
based upon revenue and cost at the time of acquisition,
is on average 23%.
Plots contracted(5)
Contracted sites(5)
19,819 plots
(2020: 12,124 plots)
109 sites
(2020: 69 sites)
2. Developing young talent
This year saw the first cohort from the Bellway graduate
scheme transition into permanent roles across the business.
To mark the successful completion of the first Bellway
graduate scheme and the contribution the graduates have
made to the business a ‘Graduate of the Year’ award has
been created. To celebrate their success the winner will
attend the employee award events in November.
3. Successfully adapting to COVID-19 restrictions
Bellway has well established ‘COVID-safe’ enhanced working
procedures for both sites and offices. These practices,
supported by risk assessments, have ensured employees’
safety and wellbeing.
Regular communications have kept our people up-to-
date with the Group’s plans and response to the latest
Government guidelines.
4. Using modern methods of construction
Bellway are trialling modern methods of construction to
deliver homes. The use of modern methods of construction
ensures that a higher proportion of the project building
materials are assembled within a controlled factory
environment, increasing delivery speed and reducing the risk
of adverse weather impact.
Bellway p.l.c. Annual Report and Accounts 2021
10
Strategic Report 6
4
5
Timber frame construction offers a number of advantages
in terms of sustainability, the homes feature high levels
of thermal insulation reducing our customers’ energy
requirements and their carbon dioxide emissions. The timber
used in the manufacture of the frames is harvested from a
renewable resource, and timber frame homes also feature
less embodied carbon than homes built using traditional
building products.
5. Giving back to our communities
A wheelchair rugby player from Dartford has secured
sponsorship from the Bellway London Partnerships
division as he bids to make the England squad for the
next World Cup.
Lewis King, who turns out for Dartford-based side The
Argonauts, received a donation which will go towards
purchasing a new set of wheels for Lewis’ chair ahead of the
tournament, which is being held alongside the Rugby League
World Cup in England in 2022.
Lewis, 35, has been using a wheelchair since 2009, when a
blood clot in his spinal cord left him unable to walk unaided.
He began playing wheelchair rugby in 2016 and was selected
to play for the national team just two years later.
6. Biodiversity offsetting.
Bellway acquired 23.8 hectares (59 acres) of land at Mares
Close, Northumberland and have entered into a ‘Biodiversity
Offsetting Agreement’ with North Tyneside Council to offset
residential development in the area. Bellway have carried
out ecological enabling works and are in the process of
transferring the land to the Northumberland Wildlife Trust
Limited.
Mares Close was previously used for agriculture. It delivers
the DEFRA credits to offset a local residential development
and enhances biodiversity in the long term. The objectives
of the offsetting agreement include creating diverse native
hedgerows at the margins suitable for nesting and foraging
birds and maintaining wetland scrapes to provide fish-free
pools for invertebrates and amphibians.
The scheme demonstrates our commitment to the
environment, long-term offsetting and biodiversity net gain.
Bellway p.l.c. Annual Report and Accounts 2021
11
Strategic ReportStrategic Report Business Model
The following timeline demonstrates how we create value from purchasing land
to selling homes.
Selecting the
right land
Managing the
planning process
Building homes that
customers want
What we do
• Land opportunities are identified by
our divisional and Group land and
planning teams using their local
knowledge and contacts. A viability
assessment and appraisal is prepared
by the division, which is assessed in
detail at divisional, regional and then
Group level, where the final decision
is taken on whether to purchase a site.
Board approval may also be required
depending upon the value and nature
of the proposed acquisition.
• The number of large, long-term sites
that we own is strictly controlled to
avoid having too much capital tied up
or concentrated in one location.
• We often secure land without the
benefit of an implementable detailed
planning permission (‘DPP’), typically
brownfield sites with an outline
planning consent or on a ‘subject
to planning’ basis. We use the
expertise of our land and planning
teams to obtain DPP which thereby
reduces risks, adds value and enables
higher returns.
• We aim to increase the number
of homes sold through continued
investment in land.
For more information see page 14.
What we do
• Our land bank is comprised of
What we do
• We construct a wide range of
three tiers:
i) Owned or unconditionally
contracted land with DPP.
ii) Pipeline plots of land owned
or controlled pending DPP,
with development expected
to commence within the next
three years.
iii) Strategic land, which is longer-term
plots typically held under option.
• Our divisional and Group planning
teams work closely with local
authorities and communities to
obtain DPP to construct homes which
reflect local planning and vernacular
requirements. The divisional and
Group planning teams also progress
a combination of medium-term
‘pipeline’ sites and land from our
strategic land bank through the
planning system.
For more information see page 15.
homes, with a focus on our Artisan
Collection standard house types, to
suit a variety of customer budgets
and lifestyles. Our homes are built
to a high standard in compliance
with specific building, technical and
health and safety regulations and
other regulatory requirements, as
well as to our own quality standards.
• Our priority is the health, safety
and wellbeing of our employees,
subcontractors and visitors to our
developments.
• We strive to maintain long-term
working relationships with reputable
subcontractors and supply chain
partners to reduce health and safety
risks and to ensure the commercial
availability and quality of materials
and labour.
• We seek to ensure that we have
suitable building materials available
at competitive prices to enable us
to construct homes to the high
standards expected of us by our
customers, within budget and
on time.
• We closely monitor work-in-
progress to ensure that build
rates are consistent with sales
rates to avoid unnecessary capital
becoming tied up.
For more information see page 16.
Bellway p.l.c. Annual Report and Accounts 2021
12
Strategic Report How we are investing
for the future
Earnings for employees
£184.4m
(2020: £180.1m)
Payments to subcontractors
and suppliers
£1.8bn
(2020: £1.4 bn)
Investment in communities
£71.3m
(2020: £60.5m)
Payments to national
and local government
£176.5m
(2020: £135.4m)
Dividends to shareholders
£104.7m
(2020: £123.1m)
Read the detail
Over the next few pages we
explain our business model in
more detail, including how this is
aligned with our three corporate
responsibility pillars:
Environment
Construction
Society and economy
Delivering an excellent
customer experience
Investing in
our people
What we do
• Bellway provides an excellent
customer service from the moment
our customers decide to look for a
new home, throughout all stages of
their journey with Bellway including
the early years of home ownership.
• We have dedicated customer care
teams within each division delivering
high levels of customer service and
these are supported by the Group
Head of Customer Care.
• Our Customer First initiative
continues at pace to drive future
improvements to quality and
customer service.
• Our retention of the HBF 5-star
homebuilder3 status for the fifth
consecutive year demonstrates our
commitment to providing the highest
level of service to our customers.
• In addition to the HBF survey,
Bellway also engages with our
customers through Trustpilot where
we actively invite feedback from our
customers on all elements of our
service.
• To enhance the aftercare service
provided to our customers we have
upgraded our customer care digital
platform.
• We have created a subcontractor
portal to better manage any post
completion issues reported by
our customers.
For more information see page 17.
What we do
• Our people are key to the success of
our business and we aim to provide
them with a rewarding and fulfilling
career.
• We aim to continue attracting
and retaining top-quality, diverse
people to complement our existing
workforce.
• We provide opportunities for
employees to develop and grow
by delivering structured inclusive
training programmes for graduates,
apprentices and trainees through our
new Bellway Academy and through
tailored training programmes for
other employees.
• We provide career pathways
to enable long-term
development, progression and
succession planning.
• We provide information and organise
events to promote and encourage
our employees to lead a healthy and
balanced lifestyle.
• We work with the NHBC to support
the development of Trainee
and Assistant Site Managers
across the business, through our
Good Foundations Built with Us
programme.
• We have launched a senior
management development
programme to develop leadership
capability and talent within the
business.
For more information see page 18.
Bellway p.l.c. Annual Report and Accounts 2021
13
Strategic ReportStrategic Report Business Model continued
Selecting the right land
What we do and how we manage risk
Where sites require planning consent it may take many
months to progress a parcel of land through the planning
process before we can start building and selling homes. Our
land teams are therefore focused on purchasing sufficient
sites to ensure that we have the necessary amount of land
to meet our short-term volume growth targets as well as a
pipeline of land for subsequent years. Bellway’s solid, asset-
backed balance sheet, substantial cash resources and long-
term committed financing arrangements, have enabled the
Group to continue its front-footed, yet disciplined approach
to land acquisition.
Alignment with our corporate responsibility pillars
By building a significant number of quality homes on
brownfield land we are contributing to the regeneration of
areas in mainly urban locations.
By paying section 106 and Community Infrastructure Levy
contributions we provide local authorities with revenue for
community investment.
Local authorities benefit from additional revenue under the
New Homes Bonus.
For more information see pages 56 to 66.
The risks
The inability to source suitable land that meets our financial
and non-financial acquisition criteria, including minimum
gross margin and RoCE hurdle rates. There has been no
change to this risk during the year.
For more information see pages 48 to 51.
How we measure our performance
Acquiring high-quality sustainable sites in areas of strong
customer demand that meet or exceed both our financial
and non-financial acquisition criteria is key to the success
of the business. Failure to have an adequate supply of land
would limit ability to achieve our volume growth targets.
We therefore link part of the Executive Directors’ bonuses
to the delivery of a sufficient land bank to meet our growth
aspirations. RoCE is a key indicator of how we are delivering
our strategy of building shareholder value, which is reliant
on land acquisition and the subsequent performance of
our developments. Gross margin enables us to monitor the
robustness of our land purchasing process and the level of
profit on land purchases and we regularly review the pipeline
to ensure that our land bank remains appropriate.
Achieved
Not Achieved
Achieved
Sufficient land bank of plots
with DPP
Achieved
R
Gross margin (%)(1)
19.2%
+350bps
2019
2020
2021
24.6
19.2
15.7
2019
2020
2021
Underlying gross margin (%)(1)(4)
24.6
20.9%
+190bps
20.9
19.0
RoCE (%)(1)
15.2%
+690bps
2019
2020
2021
24.7
15.2
8.3
2019
2020
2021
Underlying RoCE (%)(1)(4)
24.7
16.9%
+610bps
16.9
10.8
2019
2020
2021
Note:
Link to remuneration – see pages 90 to 110.
Bellway p.l.c. Annual Report and Accounts 2021
14
Strategic Report Managing the planning process
What we do and how we manage risk
Our planning teams build collaborative relationships with
local authorities, communities and interest groups so that our
completed developments benefit the areas in which they are
built and support local needs. We also welcome Government
support to the planning process such as the continuation of
the National Planning Policy Framework.
Alignment with our corporate responsibility pillars
We consult with local residents as part of the planning
process to help us build the homes our customers
desire locally.
We make contributions to local communities through section
106 and Community Infrastructure Levy payments and
through the provision of the New Homes Bonus.
For more information see pages 56 to 66.
The risks
Delays and increasing complexity and cost in the planning
process. There has been no change in this risk during
the year.
For more information see pages 48 to 51.
How we measure our performance
These KPIs enable us to monitor the number of plots in each
tier of our land bank to ensure they remain sufficient to help
us deliver our strategy of volume growth.
At the end of the year we had an appropriate number of plots
in each land bank tier to meet our strategy.
Number of plots in owned
and controlled land bank
with DPP (plots)
30,933 plots
+9.3%
Number of plots in ‘pipeline’
(plots)
24,300 plots
+49.1%
Number of plots in strategic
land bank – positive planning
status (plots)
8,700 plots
(4.4%)
Number of plots in strategic
land bank – longer-term
interests (plots)
21,700 plots
+17.9%
Number of plots acquired
with DPP (plots)
1,844 plots
+13.1%
26,421
28,289
30,933
2019
2020
2021
24,300
16,300
16,300
2019
2020
2021
8,800
9,100
8,700
2019
2020
2021
21,700
16,800
18,400
2019
2020
2021
1,844
1,630
641
2019
2020
2021
Number of plots converted from
medium-term ‘pipeline’ (plots)
9,795
10,938
10,938 plots
+41.0%
7,760
2019
2020
2021
Bellway p.l.c. Annual Report and Accounts 2021
15
Strategic ReportStrategic Report Business Model continued
Building homes that
customers want
What we do and how we manage risk
Experienced construction people, strong relationships with
skilled subcontractors and consultants, together with Group
purchasing arrangements with suppliers and manufacturers,
are key to enabling us to deliver homes built to the right
standard, at the right time and at the right price.
Alignment with our corporate responsibility pillars
The health and safety of everyone who works on and visits
any of our locations is paramount.
We are building low carbon exemplar homes on a trial
basis to better understand upcoming challenges and
industry targets. These are designed to be constructed using
low carbon methods and reduce end user carbon emissions.
Reducing waste on-site, in divisional offices and in sales
centres delivers cost savings for the business and reduces
the amount of waste sent to landfill.
Building strong long-term relationships with subcontractors,
consultants, and suppliers and manufacturers of materials
generates benefits for us, those we do business with and the
communities in which we operate.
For more information see pages 56 to 66.
The risks
• Shortage of building materials at competitive prices.
Health and safety incident rate*
0.856
0.497
(30.4%)
0.714
0.497
2019
2020
2021
Number of NHBC Pride in the
Job Awards (awards)
42
44
39
39 awards
(11.4%)
Number of RIDDOR seven-day
reportable incidents per 100,000
site operatives (accidents)
336.49 accidents
+65.7%
2019
2020
2021
324.87
336.49
203.12
2019
2020
2021
• Shortage of appropriately skilled construction people and
Note:
*
The health and safety incident rate in 2019 and 2020 is based on figures provided by
the NHBC. In April 2021 the Group started using Safety Services (UK) Limited instead of
the NHBC.
subcontractors.
• Significant health and safety risks inherent in the
construction process.
• There has been no change to these risks during the year.
For more information see pages 48 to 51.
How we measure our performance
The health, safety and wellbeing of our employees,
subcontractors and visitors to our developments is
paramount. Health and safety performance is taken into
account as part of the overall assessment of the Executive
Directors’ potential bonus payment. Improvements in health
and safety performance are indicated by a lower health and
safety advisory score, Bellway currently use Safety Services
(UK) Limited for this function (previously measured by NHBC
on the same basis). The increase in the RIDDOR seven-day
reportable Accident Incident Rate per 100,000 site operatives
is not considered to be representative of overall safety
performance of the Group due to the artificially low rate in the
prior year as a result of COVID-19.
Bellway p.l.c. Annual Report and Accounts 2021
16
Strategic Report Delivering an excellent
customer experience
What we do and how we manage risk
Our well-trained and motivated team members through all
disciplines within the business have the necessary skills and
enthusiasm to deliver the highest levels of customer service.
Our construction teams are committed to building quality
homes to be proud of.
Alignment with our corporate responsibility pillars
We continue to improve energy efficiency by building homes
that are, on average, more energy-efficient than is required
by building regulations.
Customer handover packs contain information on sustainable
travel, local recycling centres and energy efficiency advice.
Customer satisfaction score (%)
86.4
85.5
86.6
86.6%
+110bps
2019
2020
2021
Number of homes sold (homes)
10,892
10,138 homes
+34.8%
10,138
7,522
For more information see pages 56 to 66
2019
2020
2021
The risks
There are a number of risks, which if not appropriately
mitigated, will negatively impact the customer experience.
Our Customer First initiative continues to focus on improving
our customers’ overall experience which will also help
mitigate the risks to Bellway’s reputation.
These risks are not regarded as principal risks and so have
not been included in our principal risk table on pages 48 to
51. These risks have not changed during the year.
How we measure our performance
We have chosen the following KPIs as they demonstrate
progress made in delivering our strategy of volume growth
alongside customer satisfaction. These include responses
to the question ‘Would You Recommend a Friend?’, which
is the driver for the HBF 5-star homebuilder3 status, and
overall satisfaction scores from the HBF 8 week survey. We
also now report internally on results obtained through the
HBF 9 month survey which captures customer feedback of
experiences during the first 9 months of home ownership.
Bellway were awarded 5-star homebuilder3 status by the HBF
in March 2021 for the period ended 30th September 2020.
The final Recommend a Friend score was 93.5% against a
target of 90%, an improvement of 1.5% from the previous year.
As we progress through the year, our current score is 93.6%
(against a target of 90%) therefore we remain confident of
retaining our 5-star homebuilder3 status for the year ended
30th September 2021.
Reservations rate
(homes per week)
204 homes per week
+14.6%
210
204
178
2019
2020
2021
HBF homebuilder status (star)(3)
5
5
5
5 star
No change
R
Order book value at 31 July
(£m)(1)
£2,022.3m
+14.9%
R
Link to remuneration
See pages 90 to 110.
2019
2020
2021
2,022.3
1,760.2
1,223.9
2019
2020
2021
Bellway p.l.c. Annual Report and Accounts 2021
17
Strategic ReportStrategic Report Business Model continued
Investing in our people
Employees who have worked
for the Group for 10 years
or more (%)
16.4
16.4
15.1
What we do and how we manage risk
Our skilled, professional and dedicated employees are
provided with the right level of training, support and
resources to succeed. We also rely on our dedicated
Group HR team, which focuses on the attraction,
development and retention of diverse talent across
the business. We ensure that the human rights of our
employees and of those who work with us are respected
and protected, and we ensure that we provide a workplace
and environment for our employees, which looks after their
safety as well as their health and wellbeing.
Alignment with our corporate responsibility pillars
We have continued with our employee listening groups, and
made further improvements in learning and development
through a number of new development programmes and
courses. We have launched our first diversity and inclusion
network group, ‘Balance’ and will provide further diversity
and inclusion training to all employees. In addition we have
developed and launched our Equality, Diversity and Inclusion
Policy and an Agile Working Policy.
For more information see pages 56 to 66.
The risks
The inability to attract and retain appropriate people
remains a principal risk to the business. In order to lower
the risk, we are investing our efforts in early years talent
and developing our people.
There is an increase in this risk given the current level of
competitiveness for candidates in the job market and the
skills shortage faced by the industry.
For more information see pages 48 to 51.
How we measure our performance
We use the following KPIs as indicators of how successful
we have been during the year in managing and developing
our people.
We continue to develop our staff through increased levels of
training. We have policies and training in place to protect the
human rights of our employees and those who work for us.
These are overseen by our Group HR team to ensure these
policies are adhered to, and any concerns can be reported
direct or through our whistleblowing hotline (see page 88 for
further information). The number of graduates, trainees and
apprentices has reduced due to a change in the timing of
the 37 graduates from the 2021 Graduate cohort joining the
business in September 2021. The Board continues its focus
on the number of women in its senior management team
positions after a slight reduction in the current year.
16.4%
no change
2019
2020
2021
Number of graduates, trainees
and apprentices (number)
258
246
246
(4.7%)
.
182
2019
2020
2021
Training days per employee
(days)
5.1
4.3 days
+4.9%
4.1
4.3
Employee turnover (%)
26.5%
+640bps
2019
2020
2021
26.5
22.4
20.1
2019
2020
2021
Senior management gender
split (%)
18.9
19.7
18.8
18.8%
(90bps)
2019
2020
2021
Bellway p.l.c. Annual Report and Accounts 2021
18
Strategic Report Strategic Report
Better at
breaking barriers
Through studying Quantity Surveying at Liverpool
John Moores University, Beth was first introduced to a
construction site, which sparked her interest in a career
path in construction. When applying for graduate roles,
she was attracted to the new Graduate Programme at
Bellway due to our “commitment to diversity, inclusion
and equality and building high quality homes”. Since
starting her role in early 2020 as a Construction Graduate,
she has been able to see the full customer journey and
finds it very fulfilling.
Better with
Bellway p.l.c. Annual Report and Accounts 2021
19
Strategic Report Key Stakeholder Relationships
Maintaining good relationships with our stakeholders is important to what we do.
The Board of Directors confirm that during the year under review, it has acted to promote the long-term success of the
Company for the benefit of shareholders, whilst having due regard to the matters set out in section 172(1)(a) to (f) of the
Companies Act 2006, being:
(a) the likely consequences of any decision in the long-term,
(b) the interests of the Group’s employees,
(c) the need to foster the Group’s business relationships with suppliers, customers and others,
(d) the impact of the Group’s operations on the community and the environment,
(e) the desirability of the Group maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly between members of the Group.
On pages 20 to 27 we set out how we have engaged with various stakeholders during the year, the key issues raised
and outcomes.
Customers
How we engage
Bellway has a reputation for excellent customer service, with
our face-to-face sales approach helping thousands of people
to purchase their dream home every year.
From the moment a prospective customer begins their
search for a new home, we engage with them through
our website or social media, providing them with all the
information they require to help them make an informed
decision so they can decide on the most suitable location
and property type before they visit our Sales Office.
Our dedicated and highly trained sales advisors place a
significant emphasis on making the process of moving home
as smooth as possible. From the moment the customer enters
a Sales Office, to them moving into their home, we aim to
make sure that the process is a positive and memorable one.
We have a dedicated Customer Care team who deal with any
post completion issues and questions customers may have,
to maintain that positive experience throughout the early
years of Bellway home ownership.
We encourage feedback throughout the sales process,
via our sales teams and through Trustpilot and the HBF
Customer Satisfaction survey. This survey is used to rate the
sales experience, build quality, design and post-completion
customer care and we use the results to improve the level of
quality and service we provide.
We utilise several customer communication channels,
providing our customers with the option to use those best
suited to their needs.
Through our marketing activities, we assess, and review
collected data to ensure we are engaging with our customers
and responding to their needs.
Our use of social media channels involves us engaging
existing customers and prospective customers by generating
aspirational content that showcases Bellway’s products and
uses customer case studies and testimonials to bring this
to life.
Following the Government’s review of building safety after
Grenfell, they issued revised guidance which clarifies their
interpretation of the extant building regulations that were
in place at the time of construction. Bellway appointed a
dedicated fire safety project team that communicates directly
with building owners, managing agents and customers in
order to help them through a complex issue that is impacting
the whole of the industry. The team also ensures compliance
with our new fire policy. There is executive management
team oversight of fire safety through our Fire Board meetings.
Key issues raised
• Customer service
• Digital adoption
• Sustainability and efficiency of homes
• Build quality
• Innovation
• Legacy building safety improvements
• Help-to-Buy
We engage existing and
prospective customers
through our social media
channels, including
Instagram (left).
Bellway p.l.c. Annual Report and Accounts 2021
20
Strategic Report Outcomes
We have retained 5-star homebuilder3 status in the national
HBF awards for the fifth consecutive year, which reflects our
commitment to delivering exceptional quality as standard to
our customers, throughout our construction process, after
care and customer service.
Being a 5-star homebuilder3 means that over 9 out of 10
customers would recommend Bellway to a friend, which is
an accolade we are very proud of. In fact, our score of 93.5%
in the Recommend a Friend category was the highest score
achieved by Bellway since commencement of the NHBC
Survey scheme in 2007.
HBF Survey scheme:
‘Recommend a Friend’ category
93.5%
Despite our 5-star homebuilder3 status, satisfaction
among customers reduces at our 9-month survey results.
Accordingly, our focus now includes the NHBC 9-month
survey, where we consistently receive scores of over 10%
below our Recommend a Friend score in the 8-week survey.
Our current Recommend a Friend score in the 9-month
survey is 78.3%.
The launch of our Customer First initiative is designed
to address this required improvement, with a specific focus
on our planning, build, sales, post-completion customer
care, training and communications processes to provide
a better level of service. Our aim is to deliver a 5 star service,
combined with a 5 star build quality, putting the customer
at the heart of everything we do.
Customer First was
launched to the
business in April 2021.
We have already started to make improvements in all
elements of this project, including standardising build
processes and procedures across the Group through our
‘Artisan Collection’ house type range, and making further
improvements to ensure we are working consistently across
all our divisions. Importantly, we are sharing best practices
from divisions to enhance the quality of build, service and
customer care across the Group.
We will engage with customers earlier in the build process,
so they can familiarise themselves with their home being
built. We are increasing the customer touch points on site
with regular customer inspections during the build stage and
are introducing ‘Meet the Builder’ for customers to interact
with the teams who are constructing their homes. Customers
will also be provided with an opportunity to spend some
time in their home unaccompanied prior to the final home
demonstration, where they will be provided with a full
overview of the major components of their new home, and
have an opportunity to discuss any queries or concerns they
may have directly with the construction team.
We have responded to customer feedback on our
customer care core hours to make sure we are available at
times convenient to them. We have installed a new telephone
system across the Group allowing our colleagues to work
effectively from home as well as in the office. We have
conducted trials to extend the core hours of the customer
care teams with the results establishing that there is a demand
for enhanced access to our customer care teams from our
customers. To this effect Bellway now provide access to our
customer care teams between the hours of 9.00am and
1.00pm each Saturday effective from 1 September 2021.
Although the COVID-19 pandemic has had a significant effect
on the working practices across our business, it has also
provided an opportunity to review and improve the service
we deliver. During lockdown we introduced an appointment
only system for our Sales Offices. This has been positively
received by our customers and Sales Advisors alike, allowing
us to provide a higher level of service as a result. This
approach will continue beyond COVID-19 restrictions.
Although the COVID-19 pandemic has
had a significant effect on the working practices
across our business, it has also provided
an opportunity to review and improve the
service we deliver.
Fire safety continues to be a significant issue for some
customers who live in apartments. Our dedicated Fire Safety
team communicate with customers through our Fire Safety
Helpline, and we have launched a dedicated fire safety website
for customers providing guidance on what Bellway is doing
to address the issue. Our fire team meet with Leaseholders
and other key stakeholders in order to maintain effective
communications, and we provide regular communications on
sites where we are undertaking remediation.
As part of our Customer First activities, we are making
improvements to the digitisation of our sales process with the
impending launch of the ‘Your Bellway’ customer portal. This
will provide an improved level of service to our customers,
giving them a further way of interacting with us and allowing
them to download key documentation and choose
‘additions’ from the comfort of their own homes. We expect
‘Your Bellway’ to launch later in 2021.
We have also improved the digital experience with
the launch of a new Bellway website, which has been
redesigned for a better user experience. In addition, we are
also launching new websites later this year for our Ashberry
Homes and Bellway London brands.
Following feedback from investors, customers, communities
and other stakeholders, development work has commenced
on our new sustainability framework and strategy which
will operate under the banner ‘Better with Bellway’. We
will use this across the business to consolidate all relevant
activities under a single sub-brand. This will also be utilised in
customer communications to help demonstrate how Bellway
is operating in a sustainable way.
The Board fully consider our customers, through regular
oversight in board meetings, with key customer initiatives and
ongoing customer care and satisfaction scores being reported
on a regular basis. A report from the Group Head of Customer
Care is a standing agenda item for all Board meetings.
Bellway p.l.c. Annual Report and Accounts 2021
21
Strategic ReportStrategic Report Key Stakeholder Relationships continued
Colleagues
How we engage
We ensure that our colleagues are well informed and have
the knowledge they need to operate successfully in the best
interests of Bellway, our customers, and other stakeholders.
Due to the impact of COVID-19, colleague engagement has
been a vital link between the business and its employees,
especially where colleagues have been forced to change
working practices because of the pandemic.
We undertook Bellway’s first ‘Employee Engagement
Survey’ which ran in August and September 2020, and
was conducted by external consultants, ETS. Colleagues
were asked to confidentially share their views on all aspects
of working for Bellway, and this was used to shape our
employee strategy for the year. We placed a significant
importance on the survey for all employees across the Group
to ensure that the results reflected the diverse nature of the
roles that are undertaken by our employees whether office
based or on our construction sites.
As well as the Employee Engagement Survey, we continued
to undertake our quarterly Employee Listening Groups
which we use to gain further ongoing feedback from
employees in order to help introduce or enhance processes
and procedures across the business. In order to increase
the understanding of our colleagues views of Bellway at
Board level, non-executive directors have attended some
of these listening groups, and our Group General Counsel
and Company Secretary regularly reports on points raised at
board meetings.
The focus of our dedicated Group HR team continues to be
on the attraction, development and retention of talent across
the business, and improving the diversity of our workforce.
We have increased our focus on ensuring that new
colleagues have an improved onboarding process when
they join the business and continue to gain feedback from
those who leave in order improve where necessary.
Senior management regularly present to the Board and
divisional visits by directors and regional chairmen help to
inform the Board of matters important to our employees.
Earlier this year we also launched our ‘Balance’ network
group which provides an open forum to discuss matters
relating to diversity, equality and inclusion across the Group.
The purpose of Balance is to engage in meaningful dialogue
regarding barriers or problems encountered in coming into
the construction industry or Bellway specifically, with a view
to establishing solutions and improving accessibility to the
industry and Bellway for minority groups. The network is
sponsored and chaired by senior leaders within the Group
and has diverse representation from across the business. The
Balance network has met several times since its inception in
May 2021.
Our internal communications strategy remains a key
area of focus for the business as we look to improve
communications across the Group, particularly focused on
the harder to reach site-based colleagues. We are investing in
our communications channels to provide a variety of different
communications tools for our colleagues and have varied
how we communicate using video.
Key issues raised
• Health, safety and wellbeing
• Improving our internal colleague communications
• Flexible and agile working
• Diversity and inclusion
• Employee benefits
• Senior leadership development
• Training and development
Outcomes
Our ‘Employee Engagement Survey’ received a 72%
response rate, which is a good rate given it was the first time
that the Group has run the survey. The engagement rate
from employees was high at 91% compared to a benchmark
of 80%.
The survey results showed that there was a strong customer
focus among Bellway employees and that there was high
levels of trust and empowerment for colleagues to do
their jobs.
Overall, 85% of colleagues felt part of the Bellway family
which was higher than industry benchmarks, but one
area to be improved upon was among our weekly paid
colleagues. In order to address this, we have ensured that all
communications are also directed towards these colleagues,
and we are also making improvements to our internal
communications channels to improve the communications
we have with this audience.
Employee Engagement
Survey response rate
Colleagues that ‘feel part
of the Bellway family’
72%
85%
Areas for improvement identified in the survey, have led
to us enhancing our internal communications activities
and making senior leaders more visible within these
communications using video. We have issued regular
monthly Health and Wellbeing communications to all
colleagues within the business including healthy eating,
mental health and financial wellbeing activities in order to
provide colleagues with the support they need.
Our colleagues asked us to look at our flexible and agile
working policies as a result of enforced changes to working
practices as a result of the pandemic. We have taken steps to
enhance and support our colleagues with a new permanent
Agile Working Policy and Flexible Working Policy which
have been introduced Group-wide to support colleagues in
balancing their work and personal lives.
The Employee Engagement Survey highlighted senior
leadership style and communication as a high priority
area for development at Bellway. As a result, this year we
have launched our first Senior Leaders Development
Programme for all senior leaders across the business. Working
with external consultants, Mosaic Partners, this bespoke
programme is aimed at developing personal leadership skills
and management capacity to better lead high performing
and efficient teams.
Bellway p.l.c. Annual Report and Accounts 2021
22
Strategic Report Key issues raised
• Environment, social and governance (ESG)
• Remuneration policies
• Impact of COVID-19 and recovery
• General market conditions e.g. post Brexit impact,
mortgage market, affordability of homes, Help-to-Buy
and land market
• Dividend Policy
• Customer care and build quality
• Legacy building safety improvements
Outcomes
Shareholder engagement around interim and preliminary
results and regular trading updates allows us to provide
additional information and clarity as a result of points raised.
We ensure these points of clarity are provided in future
announcements in order to demonstrate we are meeting
our shareholders needs and requirements when presenting
financial updates.
Shareholder and institutional investor feedback is considered
on information we provide in our Annual Report and
Accounts to enhance the level of information we provide on
the performance of our business.
We have proactively communicated with major shareholders
on our response to fire safety to provide oversight of
Bellway’s proactive and responsible response to the issue.
The Artisan Collection
showcases the best in
contemporary home
design, developed
using feedback from our
customers
Shareholders
How we engage
As a FTSE 250 publicly listed company, we have a duty to
provide our shareholders with fair, transparent and balanced
information on the performance, strategy and direction of
the business in order to provide confidence and trust which
allows informed investment decisions to be made.
Our executive management team regularly meets and
communicates with major shareholders and analysts
including at formal presentations at least twice a year.
We provide updates on our performance at interim and
preliminary financial results, with additional financial updates
to investors through trading updates. This ensures that
investors have access to the progress of the business.
We have developed external relationships with institutional
investors, prospective investors and market analysts and hold
meetings or calls with them to allow them to raise issues or
seek information – particularly when we release our results to
the City.
As well as regular market updates to investors, we also
communicate our financial updates through traditional media
channels and hold meetings with key City journalists to help
amplify our story to existing and prospective shareholders
and investors. We also communicate financial updates to
our employees, a number of whom are also shareholders in
the business.
The Board of Directors receive regular updates from our
brokers and PR consultancies following our trading updates,
interim and preliminary results and presentations that
provide feedback from investors and analysts. This helps us
understand how our business strategy and delivery is being
received by investors and we proactively communicate with
our brokers to keep us informed about the positioning of the
business in the investor community.
We seek the views of shareholder representative bodies
where appropriate, especially relating to Director
remuneration and Board succession. We also respond to
shareholder queries whenever possible in order to build
upon their understanding of the business strategy.
Over the past 12 months, as well as communicating on
financial performance, we have also engaged with investors
on our response to legacy building safety, environmental
protection and remuneration policies.
Our Senior Independent Director is available to attend
meetings with major shareholders and we regularly update
our corporate website whenever any updates have been
announced to the City.
Shareholders are given the opportunity to ask questions
ahead of or at our AGM and are provided with the
opportunity to listen to the AGM live through a web-link.
Bellway p.l.c. Annual Report and Accounts 2021
23
Strategic ReportStrategic Report Key Stakeholder Relationships continued
Partners
How we engage
Our size and scale mean that we regularly engage with our
suppliers and subcontractors to work closely with them
to maximise the relationships for the benefit of all parties.
Our dedicated Group Commercial relationship management
team provide an ongoing dialogue with our suppliers
and subcontractors at a Group and divisional level. These
strong, and often long-term relationships help us work
effectively in ensuring that we can manage any short-term
challenges being faced by the industry, such as supply chain
management and price inflation, but also health and safety
and other issues.
We regularly hold meetings and communicate with our key
partners and subcontractors, passing on information to our
divisions as appropriate. This allows us to adapt our approach
quickly and utilise new technologies and products when
they become available while maintaining efficiencies from
those relationships.
The combination of the COVID-19 pandemic, the impact
of Brexit and increased worldwide demand for construction
materials has meant that we have had to adapt the
way we engage with our partners, requiring us to work
together to overcome the mutual challenges being faced
across the industry. By working together, we have a better
understanding of the challenges we all face, and our
increased focus on planning and problem solving has helped
successfully manage any issues that have arisen.
By working together, we have a better
understanding of the challenges we all face,
and our increased focus on planning and
problem solving has helped successfully
manage any issues that have arisen.
We strive to maintain long-term working relationships with
reputable subcontractors to ensure the availability and
quality of materials and labour is maintained and we work
closely with them to ensure health and safety risks on our
construction sites are understood and managed effectively.
Having effective partnerships with a range of public bodies
and national and regional agencies is essential to the success
of our business. These relationships allow us to deliver benefit
to the communities in which we build.
Our long-established relationships with housing association
partners across the country, ranging from large national and
regional organisations to smaller providers helps us deliver
affordable homes in the communities where we build, giving
access to new homes to more people as a result.
Our Group and divisional teams of specialist land buyers
work with landowners, commercial vendors and the public
sector to secure land opportunities. They consider any site
regardless of current planning status and they have access
to substantial funding to allow them to move quickly, and
make offers to purchase land subject to our well established
approval process and hurdle rates.
Through our divisional offices, we have significant expertise
and knowledge of local planning policies and frameworks.
This expertise is essential in guiding challenging sites through
the local planning process.
We also engage with Government and private agency
partners in joint venture and partnership agreements. With
regard to Fire Safety, our Fire Projects teams regularly meet
with business partners on live and future remediation projects.
Key issues raised
• Supply chain demand and price inflation
• Labour shortage
• COVID-19
• Health and safety
• Efficiencies and environmental management
• Land and planning
• Sustainability
Outcomes
Our strong personal relationships with key suppliers and
subcontractors have effectively helped us manage the
challenges being faced by the industry because of the
COVID-19 pandemic, post-Brexit issues and worldwide
demand for construction materials. These issues have
brought us closer together with our supply chain partners
resulting in us working collaboratively to overcome
most supply issues through more effective planning and
discussion.
Our personal relationships and commitment to our long-
term supply chain relationships has enabled us to be flexible
in facing any challenges, with our ‘how can we help you
help us?’ approach supporting our partners at a time when
they most need it. For example, improving our forecasting,
agreeing to longer lead times or changing distribution
options has delivered a mutual benefit.
Our respect for long-term relationships with our supply
chain management means we are able to help our suppliers
and manufacturers address any short-term issues in the
knowledge that they will continue to support us beyond the
current market short-term conditions of constrained supply.
The increased use of our Artisan standard house type range,
as directed by the Board, across our divisions has brought
further efficiencies to suppliers and subcontractors and as
a result has helped with forecasting and planning.
Our continued focus on health and safety on our construction
sites, and the adoption of COVID-19 working practices has
received positive feedback from subcontractors and suppliers.
Although the number of accidents reported on our sites has
returned to around pre-COVID-19 levels, these remain low
despite us returning to full, or near full, production levels.
Our planning expertise has continued to deliver successful
planning approvals for new sites, and our relationships
with key agencies, such as Homes England, has led to
joint ventures and partnerships on key regeneration and
infrastructure projects, bringing wider economic benefits to
the communities in which they are being built.
On fire safety, we continue to work closely with partners in
delivering remediation projects.
Bellway p.l.c. Annual Report and Accounts 2021
24
Strategic Report We also support communities through the work we
do with national, regional and local charities and
community organisations.
Our national charity partnership with Cancer Research UK
(CRUK) is now in its fifth year, with fundraising taking place
across our 22 divisions and Group, involving colleagues,
suppliers, subcontractors, and professional advisors.
Our divisions also work closely with local community
organisations, particularly supporting local charitable causes
or initiatives and these involve fundraising activities and
benefit in kind such as volunteering or donations. The Group
matches donations on any fundraising activity undertaken
by employees.
We also run local programmes involving schools and
other community organisations which demonstrates our
commitment to local communities.
Our colleagues are also encouraged to work within local
communities by offering their time and expertise to help
local community organisations with some of the challenges
they face day-to-day, or with specific issues that may require
immediate construction expertise.
Supporting a local
primary school’s
campaign to provide
their village with
potentially lifesaving
equipment.
Our communities
How we engage
Bellway is proud of the communities we create, with the
development of attractive and desirable places to live,
but we also recognise the impact of our activities on local
neighbours. It is therefore vitally important that we engage
with those communities so we can demonstrate the value
our investment brings with the creation of jobs, the provision
of attractive affordable homes and the impact this has on the
movement of existing housing stock locally, and the wider
local economic benefit new homes bring.
As part of the planning application for developments, prior
to submission, we undertake consultation with the local
community as a requirement of public engagement policies
of local authorities. By informing local communities of our
plans, through digital and traditional communications,
attending local meetings and exhibitions, we are able to
share our proposals and, where appropriate, make changes
or demonstrate how we are addressing local concerns.
By conducting local PR and digital marketing campaigns,
we showcase the benefits of our developments to all
stakeholders and use this to inform local communities.
We work with local authorities to incorporate feedback
where practicable and reasonable, and help provide
funding through Section 106 (England and Wales) and
Section 75 (Scotland) contributions as well as Community
Infrastructure Levy and affordable housing contributions.
We invest significant funds into the local communities where
we develop, providing investment for education, healthcare
facilities, sports facilities, transport infrastructure improvements
and the creation of recreational space, all bringing benefits
to the wider community.
We invest significant funds into the local
communities where we develop, providing
investment for education, healthcare
facilities, sports facilities, transport
infrastructure improvements and the creation
of recreational space, all bringing benefits
to the wider community.
We understand the impact our construction has on
communities, particularly those living or working adjacent
to our sites. Where appropriate we operate the Considerate
Construction Scheme on developments. By its very nature,
construction is disruptive to communities, but we make every
effort to respond to these issues and will communicate locally
with nearby residents when necessary.
Bellway p.l.c. Annual Report and Accounts 2021
25
Strategic ReportStrategic Report Key Stakeholder Relationships continued
Our communities continued
Key issues raised
• Affordability and the supply of housing
• Planning and community engagement
• Jobs and skills
• Biodiversity
• Home efficiency and sustainability
• Environmental issues
• Impact on existing communities and infrastructure
• Charitable and community giving
Outcomes
The expansion and increased adoption of our Artisan house
type range has provided a range of house types which
can be used to meet community needs, with many being
designed for affordable housing use.
Of the 10,138 housing completions this year, 22% (2020 – 22%)
were sold to affordable housing providers, providing much
needed affordable homes in communities throughout the UK.
We sold 7% (2020 – 6%) of our new homes to unassisted
first-time buyers while 39% (2020 – 35%) were purchased
by customers using Help-to-Buy. Overall 28% (2020 – 27%)
of our homes were sold to first-time buyers. The creation of
new homes on our developments also impacts the wider
community with people moving into new homes from the
second-hand market, thereby releasing housing stock.
Homes sold to affordable
housing providers
22%
(2020: 22%)
Homes purchased by
customers using Help
to Buy schemes
39%
(2020: 35%)
Houses purchased
by unassisted
first-time buyers
7%
(2020: 6%)
Homes purchased
by first-time buyers
28%
(2020: 27%)
We have a proven track record of responding to local
community queries relating to planning applications and
meeting community needs in the process. In 2021 we
contributed £71.3 million (2020 – £60.5 million) to local
communities through Section 106 (England and Wales)
and Section 75 (Scotland) contributions, which has brought
significant benefits and investment to local communities
throughout the UK.
Our construction activities also deliver employment
opportunities across the country and we estimate that
between 26,600 and 31,500 direct and indirect jobs were
supported by Bellway in the past year.
Direct, indirect and induced jobs
supported by Bellway in the past year
26,600 – 31,500
Whether directly or
indirectly, Bellway provide
jobs for communities.
Our relationship with Cancer Research UK has raised a total of
£1.95 million for the charity over the lifetime of our partnership,
just below our target of £2 million. This was the result of the
impact of the COVID-19 pandemic which prevented many
of the ordinary fundraising activities which take place across
divisions. We have extended our partnership for a further
two years and aim to raise £3 million by the end of 2023.
Despite the impact of COVID-19, our divisions have continued
to work with local charitable and community organisations.
A further £34,710 has been raised for these organisations but
our contribution goes much further than financial assistance.
Utilising our staff expertise across a range of disciplines we
can offer advice and practical help to organisations, as well
as donate items such as appliances and materials where they
are needed.
Total raised for
Cancer Research UK
Raised for local charitable
and community organisations
£1.95m
£34,710
We are also launching a new school engagement
programme which will roll out in 2022, and will be used
by our divisions to highlight construction activity to the
local community.
Our Customer First initiative is looking to improve
communication with local communities at the planning
stages so we can highlight the benefits our sites will bring
and address some of the concerns often raised.
Bellway p.l.c. Annual Report and Accounts 2021
26
Strategic Report Key issues raised
• Building safety and legacy building safety
• Local planning issues
• Sustainability and environment
• Leasehold reform
• Health and safety
• Access to housing
• Acceleration of housing supply
Outcomes
We respond to national, regional and local government
policies, regulatory changes and provide developments
which meet local needs by creating new sustainable
communities in attractive and desirable places which
integrate within existing neighbourhoods. Our developments
also contribute to the local economy with the creation
of jobs, Council Tax income and an increase in local
economic contributions, often providing a catalyst for
wider regeneration.
We work with relevant Government departments and
agencies in delivering programmes such as Help-to-Buy
which supports first-time buyers purchasing their new home.
Through our trade organisation membership, we are able
to respond to key Government and regulatory changes.
We have centralised our MP communications to ensure we
address concerns at a Government and constituent level.
Constituent issues raised through local MPs are managed
centrally to ensure we provide a consistent response as
a business.
We have strengthened our governance around engagement
with all MP, MSPs and Welsh Assembly communications
and meetings being reported to the Board. Through this
approach, we have proactively met and engaged with MPs
and other key stakeholders on a number of key topics,
including fire safety and planning and construction matters,
as well as dealing with ongoing constituency matters relating
to our developments.
We continue to support
the Government’s Help-
to-Buy programme,
allowing more people
to be able to afford their
first home.
Government and regulators
How we engage
Although Bellway has no political affiliations and makes
no donations to any political causes, our relationship with
national and local government is an important one. The
Government’s rebuild and ‘levelling-up’ agenda, focusing in
part on the supply of new homes, and the importance this
has on the wider economic recovery post-COVID-19, means
the resultant policies and regulatory changes provide both an
opportunity and risk for our business. It is therefore important
that we engage with key stakeholders in national and local
government, although this is often done through industry
representative bodies who provide the agreed collective
position of the wider construction industry.
The influence of national and local government policy
has a significant impact on the operation of our business,
primarily in relation to planning and support to the mortgage
market. As a result, we work collaboratively with local
authorities and other key statutory bodies, ensuring that
developments are brought forward efficiently and meet with
local need. Through Section 106 (England and Wales) and
Section 75 (Scotland) contributions, we also work closely
with local authorities to ensure that wider local needs are
met, with these contributions going towards key infrastructure
improvements such as roads, schools, doctors surgeries
and other local requirements.
More broadly, Bellway engages at a strategic level with
senior officials within the Ministry of Housing, Communities
& Local Government, HM Treasury and The Cabinet Office to
address the pressing issues of accelerating housing delivery,
fire safety, widening home ownership opportunities and the
regeneration of communities.
In London, we work closely with the Greater London
Authority and London Borough Councils, and engage
at a senior level with the Welsh Assembly and the
Scottish Parliament. In addition, we also regularly manage
communications with MPs, MSPs and Welsh Assembly
members in dealing with local issues relating to constituency
matters, both relating to developments and individual
constituent matters raised.
Bellway also maintains national and regional representation
with Homes England, the Government’s housing accelerator
body. We work closely on their public land and housing
investment agendas. We are one of the main housebuilders
to access the Help-to-Buy programme, and participate in
other forums in order to progress major policy initiatives.
At an industry body level, Bellway is an active member
of the Home Builders’ Federation (HBF) and uses this trade
organisation to provide industry level intelligence and
overview of the changing regulatory and Government
agenda. We contribute to the positioning of the HBF through
our active engagement with the wider industry. We engage
and respond to Government directly and through our
membership of industry trade organisations.
Bellway p.l.c. Annual Report and Accounts 2021
27
Strategic ReportStrategic Report Our Marketplace
The UK housebuilding sector is recovering well from the challenges associated
with COVID-19. Conditions in the new build UK housing market continue to be
positive, with strong demand for affordably priced homes, good quality housing
across many parts of the country, a positive planning environment, and a boost
from the stamp duty land tax holiday.
As highlighted in the Chairman’s Statement on page 6, conditions remain favourable with a sustainable supply of mortgages,
and this, together with the long-term prospect for low interest rates, ensures that finance for new homes is both accessible
and affordable.
Demand factors
mortgage finance has increased
significantly, thereby assisting in an
increase in the sale of new homes,
particularly for first-time buyers
or purchasers in London where
affordability is most constrained.
The Government announced that the
equity loan element of the Help-to-Buy
scheme in England will be supported
up to 31 March 2023, although with
lower regional limits and the restriction
of the scheme to first time buyers only,
which took effect in April 2021.
Help-to-Buy now accounts for 36% of
all homes sold in the new build sector,
and 39% of homes we sold in the year.
Undoubtedly, this has helped increase
the output of new build homes, which
represents an increasing proportion of
the overall market.
The continued success of the Help-
to-Buy scheme supports market
confidence which, coupled with
low interest rates, mean lenders
The affordability of mortgages
Mortgage affordability is a crucial
ingredient for a successful and
sustainable housing market. Access
to affordable finance assists potential
purchasers in securing a new home.
Competition in the mortgage market
and low interest rates ensure new
homes remain affordable. Average
mortgage repayments, as a percentage
of earnings, have gradually fallen from
a peak in 2007, following the downturn
in the housing market in 2008/09.
There has been a slight increase in
in the current year, but mortgage
payments still remain affordable .
The chart at the bottom of the page
demonstrates the affordability of
houses in the UK.
The availability of mortgages
Following the introduction of the
Government’s Help-to-Buy scheme
in April 2013 for new build homes,
the availability of 75% loan to value
Affordability of houses in the UK
i
s
g
n
n
r
a
e
:
e
c
i
r
p
e
s
u
o
H
10
9
8
7
6
5
4
3
2
1
0
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
Source: Halifax
Mortgage repayments to earnings
House price to earnings
i
s
g
n
n
r
a
e
f
t
o
e
g
a
n
e
c
r
e
p
a
s
a
s
t
n
e
m
y
a
p
e
r
e
g
a
g
t
r
o
M
are offering a range of competitive
products to buyers. The Mortgage
Market Review has resulted in a more
sustainable mortgage market.
The stamp duty land holiday
The Government temporarily
increased the stamp duty tax threshold
on which no tax was payable to
£500,000 for property sales in England
and Northern Ireland, between 8 July
2020 and 30 June 2021. This saved
buyers £15,000, if they were buying
a property for £500,000. Between 1
July 2021 and 30 September 2021, first
time buyers paid no stamp duty on
properties up to £300,000. Non-first
time buyers received stamp duty relief
on purchases up to £250,000. Pre
COVID-19 stamp duty land tax rates
resumed from 1 October 2021.
Stamp duty land tax relief has had
a positive effect on new build sales
during the year and has offered a
welcome boost to the property market.
Demand
Demand for high quality new
homes continues to be strong and
customer confidence throughout
the wider housing market is resilient.
Additionally, the ongoing environment
of low interest rates ensures that new
homes remain affordable in a historical
context, further supporting the strong
underlying demand.
Bellway p.l.c. Annual Report and Accounts 2021
28
Strategic Report
Land supply and
planning permissions
The land market continues to provide
good buying opportunities. House
prices have increased, supporting land
values and hence vendors’ appetite
to sell.
The availability of land is supported by
a positive planning environment. This
is evidenced in the chart below, which
shows a record number of planning
permissions granted in England,
Scotland and Wales over recent years,
albeit a slight decrease in 2020 due to
the COVID-19 pandemic.
The availability of land at
attractive margins
Acquiring land in areas of high
demand and in attractive locations, in
accordance with the Group’s financial
and non-financial acquisition criteria,
is one of the key factors to the success
of Bellway.
The market for land in the UK,
particularly in the main conurbations,
remains competitive.
The planning system
The Group’s ability to deliver new
homes is dependent on the efficiency
of the planning system, to provide
the necessary planning consents in a
timely and effective manner, to meet
Supply factors
the requirements of the Group’s
volume targets.
The National Planning Policy
Framework system (‘NPPF’) introduced
in March 2012, working in parallel
with the Localism Act 2011, has had
a positive effect on the planning
environment. This is evidenced by an
increase in the number of planning
permissions over recent years.
Further changes as a result of the
revised NPPF, published in February
2019, and the Government’s housing
white paper, which includes favourable
proposals such as ‘brownfield’ first,
a standard method for calculating
housing need and a requirement to
publish ‘ambitious’ local plans, has
resulted in an uplift in housing demand
in many locations across the UK.
Availability of labour
and materials
Labour and material remains subject to
short term constraints, with intermittent
labour shortages across the sector due
to staff isolation requirements to curtail
the spread of COVID-19. In addition,
the national shortage of heavy goods
vehicle drivers can sometimes affect
the availability of materials. We have
strong, well established relationships
with our key suppliers which helps to
mitigate the challenges being faced by
the industry.
361
356
380
316
323
288
Planning permissions
granted (GB)
316,000
(17%)
Planning projects
approved (GB)
12,231
Source: HBF New Housing Pipeline Report (Q4 2020 – Published July 2021). (GB) represents England, Scotland and Wales.
2015
2016
2017
2018
2019
2020
)
0
0
0
’
(
)
B
G
(
t
d
e
n
a
r
g
s
n
o
s
s
i
i
m
r
e
p
g
n
n
n
a
P
l
i
Summary of market backdrop
There is wider economic uncertainty following COVID-19, but
the market fundamentals for Bellway remain strong with:
• The ongoing imbalance between supply and demand for
affordably priced, good quality homes continuing to be a
feature across many parts of the country.
• Strong demand for new homes continuing to be supported
by the ongoing availability of Help-to-Buy, together with an
environment of low interest rates.
• The land market remaining attractive and the planning
environment favourable, with the Group continuing to identify
value-enhancing opportunities which meet or exceed our
requirements in respect of both gross margin and RoCE.
• Cross-party support to deliver an increased supply of
new homes.
Bellway is mindful of the wider economic uncertainty caused
by COVID-19, but continues to draw upon these sector-
specific favourable market conditions, retaining its clear
strategy to deliver long-term and disciplined volume growth.
This, together with the continued focus on quality and
customer care, enables all stakeholders to benefit from our
continued success.
The Group’s strategic priorities take into consideration this
synopsis of the market backdrop.
Bellway p.l.c. Annual Report and Accounts 2021
29
Strategic ReportStrategic Report
Strategic Report
Better at getting to know
our customers
We take the time to get to know our customers. For many a space to
work from is essential and we are able to offer the perfect solution.
Bellway is hoping to become a national trendsetter for the future of
home working, by offering our buyers at selected developments the
option to add a garden office pod to their new home.
These stylish outdoor pods are perfectly sized for an office –
so homeowners can wave goodbye to working from their spare
bedrooms or dining room tables, for good!
Better with
Bellway p.l.c. Annual Report and Accounts 2021
30
Our Strategy
Bellway’s strategy is to grow
shareholder value through
sustainable and disciplined volume
growth, utilising the Group’s
operational and balance sheet
capacity, combined with a strong
focus on RoCE.
As set out in the Chairman’s Statement
to achieve our overall strategy we have
identified the following three
strategic priorities
Delivering volume growth
For more information see page 31.
Value creation
For more information see page 32.
Better with Bellway
For more information see page 33.
The metrics we use to measure our performance are on pages 4 to 5.
Delivering volume growth
Overview
Delivering disciplined volume growth through our national
divisional structure, selecting the right land and managing
the planning process.
A summary of our performance against this strategic priority,
along with our plans for further progress, is detailed below.
How we performed in 2020/21
• Our front-footed, yet disciplined approach towards land
acquisition has led to a record investment in new sites.
• Bellway has performed well throughout the financial year,
benefitting from strong underlying demand across the
country for our high quality new homes.
• Volume output is above 10,000 homes and housing
revenue approaching 2019 levels.
• Sales demand remains strong and has recovered well in
spite of COVID-19.
Our plans for 2021/22
• We will continue to focus our land buying in areas of strong
customer demand and in sustainable locations.
• We will maintain our current disciplined growth strategy,
whilst being mindful of market conditions.
• We will task newer divisions with delivering ambitious long-
term growth plans.
• We will seek to purchase land where possible with the
benefit of an existing DPP consent or subject to such
consent being granted prior to acquisition.
5 STAR HOME BUILDER
CUSTOMER SATISFACTION
5 Star
Rating from the
Home Builders’
Federation Customer
Satisfaction survey
Bellway p.l.c. Annual Report and Accounts 2021
31
Strategic ReportStrategic Report
Our Strategy continued
Bellway’s strategy is to grow shareholder value through sustainable and disciplined
volume growth, utilising the Group’s operational and balance sheet capacity,
combined with a strong focus on RoCE.
Value creation
Overview
Crucial to the success of our volume growth strategy is our
ability to deliver value for shareholders. We believe that value
generation is best evaluated through capital growth, by
increasing the net asset value per share, together with the
payment of a regular dividend.
A summary of our performance against this strategic priority,
along with our plans for further progress, is detailed below.
Margin improvement
A key part of value creation are the steps we take to improve
operating margin.
How we performed in 2020/21
• We have made further design improvements to the Artisan
Collection of standard house types and secured cost
savings through standardisation, procurement efficiencies
and site layouts optimisation.
• We have trained our divisions on ‘back to basics’
commercial cost controls and fundamentals.
• We completed our BWY2020 cost-saving initiative
and introduced a new business as usual margin
improvement campaign.
• We have continued with our detailed programme of value
engineering reviews across of our sites and divisions.
Our plans for 2021/22
• We will continue to design and develop the introduction
of standard house types into the Artisan Collection.
• We will start to benchmark Artisan build costs across
all divisions.
• We will ensure that our margin improvement campaign
forms part of monthly cost reviews, whilst sharing best
practice and procurement efficiencies.
• We will continue to research and trial the use of innovative
new products, as part of our commitment to the future
homes standard, net zero and carbon reduction.
• We will continue to develop and improve our software
to ensure that all employees are trained, supported
and developed.
Capital and dividend growth
Reinvestment of earnings into financially attractive land
opportunities, whilst maintaining a focus on RoCE, has
led to a substantial increase in value for shareholders
through a combination of the ongoing growth in NAV and
dividend payments.
A summary of our performance against this strategic priority
along with our plans for further progress is detailed below.
How we performed in 2020/21
• Bellway has continued to invest capital into land and
work in progress in areas with high demand, without
compromising the RoCE and margin requirements, to
ensure that the Group is well placed to deliver growth.
• Paid dividends of £104.7 million.
• Increased NAV by 9.8% to 2,664p.1
Our plans for 2021/22
• We will continue to invest capital into land and work in
progress in a controlled manner in areas of high demand
to ensure that the Group is well placed to deliver further
growth. This will be done without compromising our gross
margin and RoCE requirements.
• The dividend is determined following careful consideration
of capital requirements, as well as the Group’s operational
capability to deliver further long term volume growth. If the
final 2020/21 dividend is approved, the total dividend will
be covered by underlying earnings by three times.
Focus on capital employed
Ensuring that our assets are used in the most efficient way to
deliver shareholder returns.
How we performed in 2020/21
• We have maintained our focus on balance sheet
management, with particular emphasis on large capital-
intensive sites and a drive to increase sales through the use
of the Ashberry brand.
• We have maintained RoCE as a key assessment when
buying land.
• We have closely monitored and controlled work-
in progress.
Bellway p.l.c. Annual Report and Accounts 2021
32
Strategic Report Our plans for 2021/22
• We will continue to maintain a focus on balance sheet
management, with particular emphasis on large capital-
intensive sites.
• We will continue to maintain RoCE as a key assessment
when buying land.
• We will continue to monitor and control work-in-progress.
Maintaining a flexible capital structure
We use a combination of cash, bank facilities and equity
to provide us with access to finance in a balanced and
flexible way. This enables us to deliver our growth strategy
while managing the cash flow requirements of the business,
including delivering dividends to our shareholders.
A summary of our performance against this strategic priority
along with our plans for further progress is detailed below.
How we performed in 2020/21
• The Group has issued a sterling US Private Placement,
as part of its ordinary course of business financing
arrangements, for a total amount of £130 million with
maturity dates in seven and ten years.
• During the year we complemented the facilities provided
by our long-term banking partners with one provided by
Santander (UK) PLC.
• We have maintained our current investor relations activities.
Our plans for 2021/22
• We will maintain our current banking arrangements.
• We will develop our current investor relations activities
with the support of a newly appointed Head of Investor
Relations.
• Maintaining a flexible capital structure.
Better with Bellway
Overview
Our growth strategy is a long-term ambition, the success of
which requires us to engage positively with our colleagues,
subcontractors and supply chain partners in order to safely
deliver a high-quality product that is appealing to our customers.
Better with Bellway is all about us creating a positive impact
on people and the environment through our sustainable and
responsible business practices.
Integral to our culture is our responsible approach to business
and in that regard, we are developing our new Better with
Bellway approach. Not only will this add momentum to the
many positive activities we already undertake, which benefit
our wider stakeholder groups, but it will also spearhead our
campaign to adopt more sustainable and responsible, long-
term business practices.
A summary of our performance against this strategic priority
along with our plans for further progress is detailed below.
Customer First
Bellway wants to lead the sectors on build quality and service.
Our Customer First programme is designed to make Bellway
stand out from its competitors by building consistently good
quality homes and providing a service that puts our customers
at the heart of everything we do. From the moment a customer
decides to buy a new home, until beyond their two-year
warranty, Customer First is about doing the right thing for our
customers and our industry to raise standards and improve the
experience of buying and living in a Bellway home.
How we performed in 2020/21
• During the year the Customer First Programme was
launched across the Group, led by our Group Chief
Executive Jason Honeyman and senior leaders from across
the business.
• A training programme has been launched to ensure that
every Bellway employee has clarity on the importance of
Customer First and knows the core behaviours to deliver a
great service to customers.
• 2,149 people have completed our Customer First
workshops with additional targeted training being provided
to our people involved directly in one of the eight pillars of
the programme.
• A team of Customer First regional and divisional champions
have been appointed across the business to help drive
Customer First at a national and local level.
• We have made a number of changes to internal processes
and customer touch points to improve the service we
provide to customers, including introducing regular site
visits at key stages in the build so customers understand
the product they are buying.
Our plans for 2021/22
• Once all our people are fully equipped with the skills
and process to deliver Customer First, it will be rolled out
externally to our customers, suppliers and subcontractors
in 2021/22.
Bellway p.l.c. Annual Report and Accounts 2021
33
Strategic ReportStrategic Report Our Strategy continued
Better with Bellway continued
Carbon reduction
At Bellway, we recognise that climate change is a growing
and significant issue, and as a responsible housebuilder we
are committed to contributing to the UK’s target of net zero
by 2050.
A summary of our performance against this strategic priority
along with our plans for further progress is detailed below.
How we performed in 2020/21
• A two-tiered approach to the oversight and management
of ESG risks, including climate change, has been
developed during the year. This comprises of a new
Sustainability Leadership Team and a Sustainability
Steering Committee.
• The Group Finance Director and Group General Counsel
and Company Secretary have been identified as the Board
sponsors for sustainability.
• Task Force on Climate Related Financial Disclosures (TCFD)
has been included in the annual report for the first time this
year.
• A sustainability strategy is under development and external
sustainability consultants, Simply Sustainable, have been
appointed to provide support.
Our plans for 2021/22
• With the support of The Carbon Trust, a baseline carbon
footprint will be established that will allow us to set science
based scope 1, 2 and 3 GHG emissions targets.
• The sustainability strategy currently under development
will be launched.
• We will be working towards the target of fitting electric
vehicle charging points in 50% of the new homes we build
by 2025.
Employer of choice
At Bellway we want to be an employer of choice, providing
people with a rewarding and fulfilling career, enabling them
to achieve their full potential and contribute to the success
of the business.
A summary of our performance against this strategic priority
along with our plans for further progress is detailed below.
How we performed in 2020/21
• We have conducted our first employee engagement survey.
• We have embedded our graduate recruitment programme
with 37 new graduates joining the business during the
year. The first cohort of graduates have also transitioned to
permanent roles in the business.
• We have continued to improve our focus on diversity and
inclusion across the Group. Diversity and inclusion has
become one of our strategic pillars.
• We have continued to use employee listening groups.
• We have trained 95 Mental Health First Aiders across
the Group.
• We have launched our new wellbeing calendar.
Our plans for 2021/22
• We will embed the employee engagement survey
which will be an annual event and commit to respond to
employee feedback
• We will continue to promote the benefit and participation
of employee listening groups.
• We will continue to train Mental Health First Aiders and roll
out Mental Health Awareness training across the Group.
• We will continue to invest in the Bellway Academy, site
manager training and apprenticeships and graduate
training programmes.
• We will enhance the Bellway Employee awards ceremony.
• We aim to achieve full Living Wage accreditation.
• We will launch a standard induction programme with on-
boarding interviews.
Divisional Boards,
Wessex and Durham
Bellway p.l.c. Annual Report and Accounts 2021
34
Strategic Report Strategic Report
Jazele Parys, site manager at Eastside
Quarter Bexleyheath, is the first
woman in Bellway to win a Quality
Award in the NHBC’s 2021 Pride in the
Job Award programme.
Better at helping our customers
reduce energy usage
All our new homes are designed, as a minimum, to meet the energy
efficiency criteria set out in the relevant building regulations, and in
many cases we exceed this criteria. This helps our customers minimise
their running costs and their impact on the environment once they
have taken ownership of the property. Lighting in new homes is energy
efficient, while boilers are ‘A-rated’ for energy and going forward we will
be introducing ‘dual zone’ heating capability into all our new homes to
further improve efficiency. In addition, all windows are double-glazed
and kitchen appliances are ‘A-rated’ or better for energy consumption.
All these initiatives help to lower the energy bills for our customers.
Better with
Bellway p.l.c. Annual Report and Accounts 2021
35
Strategic Report Chief Executive’s Market and Operational Review
Bellway has performed
well throughout the financial
year, benefitting from strong
underlying demand across the
country for our high-quality
and affordable new homes.
Jason Honeyman
Group Chief Executive
Highlights
Average weekly
private reservations
169
(2020: 141)
Contracted plots(5)
19,819
(2020: 12,124)
Market
The mortgage market has remained supportive and low
interest rates ensure that new homes are affordable. It
took longer to obtain valuations and progress mortgage
applications earlier in the financial year, as lenders initially
dealt with a COVID-19 related backlog and increased
demand, but the time taken for customers to obtain mortgage
offers has since reduced over recent months.
Lenders also exercised increased caution during the year,
particularly in relation to higher loan-to-value mortgages,
where, in general, there remains an absence of widely
available products at competitive interest rates. Customers
with a 5% deposit are therefore often unable to access
affordable mortgage finance outside of the Government’s
Help-to-Buy scheme.
Against this backdrop, visitor numbers have remained strong,
and our appointment only system, introduced in response to
social distancing requirements, has proven to be successful,
allowing our sales advisors to spend more quality time with
interested buyers. In addition, further investment in our
website has provided ongoing benefits, especially in the
context of evolving customer trends, and this has contributed
to a 45% increase in website traffic over the financial year.
Sales rates were more pronounced in the summer and early
autumn, given the pent-up demand arising from the spring
2020 national ‘lockdown’. The reservation rate slowed during
November, as the sector transitioned to the new Help-to-
Buy rules and more widespread ‘lockdown’ measures were
reintroduced. Despite the escalation of these ‘lockdown’
measures in the new calendar year, sales rates recovered to a
more normalised level for the remainder of the period under
review, supported by the effective transition to the new Help-
to-Buy scheme in April 2021.
For the whole year, average weekly private reservations were
169 (2020 – 141, 2019 – 160), an increase of 19.9% compared
to the prior year and 5.6% ahead of financial year 2019. The
overall reservation rate rose by 14.6% to 204 per week (2020
– 178, 2019 – 210), with this achieved from an average of 270
outlets. Help-to-Buy was used in 30% (2020 – 40%, 2019 –
35%) of total reservations and the cancellation rate was low,
at just 13% (2020 – 17%, 2019 – 12%).
The pricing environment remains positive, with low-to-
mid-single digit house price inflation benefitting sites where
demand is particularly strong. This is most pronounced in
Scotland and regions such as the North West, the Midlands
and the Home Counties, with customers’ evolving working
routines providing opportunities to live further away from
traditional centres of commerce. In general, and across the
Group, house price inflation has offset rises in build costs.
Bellway p.l.c. Annual Report and Accounts 2021
36
Strategic Report Three brands to support demand
Bellway continues to operate under three brands being
Bellway, Ashberry and Bellway London. The core Bellway
brand remains the foundation of the business, contributing
86.1% of completions (2020 – 88.1%, 2019 – 85.5%).
Ashberry is used on larger sites, where the site layout
and market demand justify two selling outlets. In these
instances, we can use the two brands together to offer
differing elevational treatments and internal layouts. This
provides greater customer choice, enhanced sales rates
and an improved return on capital employed. Ashberry was
used in 6.8% of completions during the year (2020 – 5.7%,
2019 – 5.2%).
Our Bellway London brand is intended to create a single
approach to marketing across the Capital, recognising that
the product offering, specification, and customer approach to
buying a new home, often differ to elsewhere in the country.
Bellway London contributed 7.1% of the Group’s completions
(2020 – 6.2%, 2019 – 9.3%), with almost 90% of these
apartments. Our London activity continues to target the more
affordable outer transport zones, with our sites located at
Barking Riverside, Beckton and Bexleyheath all contributing
100 or more completions in the year. The average selling
price of private homes sold in the Capital was £408,051 (2020
– £514,313, 2019 – £562,554) which remains affordable in the
context of the London market.
A front-footed approach to land buying
Our front-footed and opportunistic, yet disciplined approach
towards land acquisition, at a time when there was less
pronounced competition, has led to a record investment in
new sites since our re-entry into the market in early summer
2020. This is driven by market opportunity and the strong,
structural demand for good quality housing. It has resulted
in a strengthened land bank, providing a solid platform for
ongoing growth and margin recovery in the years ahead.
The Group has contracted to purchase 19,819 plots5 (2020 –
12,124 plots, 2019 – 13,284 plots) across 109 sites5 (2020 – 69
sites, 2019 – 94 sites), with a contract value of £1,066.0 million5
(2020 – £777.7 million, 2019 – £787.7 million). The anticipated
average gross margin, based upon revenue and cost at the
time of acquisition, is 23%.
The average size of contracted sites is 182 plots5 (2020 – 176
plots, 2019 – 141 plots), an increase on prior years, with our
ability to fund larger acquisitions, often with higher anticipated
returns, proving to be valuable when placing land bids. We
have also made a measured investment in a handful of larger
sites, in primary locations, to strengthen the land bank. This is
a balanced approach, providing an alternative deployment of
capital, as our investment focus over recent years has moved
away from more cash intensive, high-rise sites in London.
Our approach to land
buying, helps us build
communities in the most
desirable places.
Our approach to investment has been to acquire sites in
desirable locations, with high demand, where the product
is affordable in the context of localised market conditions. In
addition, we have acquired sites which reflect the demand
for family housing with more space, home-working solutions,
and customers’ desire to live in suburban locations as
commuting habits continue to evolve.
The average expected selling price of plots contracted, at
around £280,000, is lower than the average selling price
achieved over the past year of £306,479. This intended
reduction is to ensure that future sales outlets offer customers
an affordable product mix, mitigating any potential downward
effect on sales rates that may arise as the revised Help-to-Buy
scheme comes to an end in March 2023.
In the year ahead, the Board expects the overall average
selling price to be around £295,000.
The table below analyses the Group’s land holdings:
DPP: plots with implementable
detailed planning permission
Pipeline: plots pending an
implementable DPP
Bellway owned and controlled
plots
Bellway share of land owned and
controlled by joint ventures
2021
2020
2019
30,933 28,289
26,421
24,300
16,300 16,300
55,233 44,589
42,721
938
472
272
Total owned and controlled plots
56,171
45,061 42,993
Strategic land holdings
Total land bank6
30,400 27,300 25,600
86,571
72,361 68,593
Bellway p.l.c. Annual Report and Accounts 2021
37
Strategic ReportStrategic Report Chief Executive’s Market and Operational Review continued
As a result of our proactive approach to land buying,
Bellway’s owned and controlled land bank at 31 July 2021
represents 5.4 years forward supply (2020 – 5.9 years,
2019 – 3.9 years). This is a modest reduction compared to
31 July 2020, when the metric was temporarily inflated due
to the drop in completions in that year, but a considerable
increase on the pre-pandemic figure of 3.9 years, reported
at 31 July 2019.
There are 30,933 plots with an implementable detailed
planning permission (‘DPP’) and the Board has good visibility
with regards to the likely construction and sales profile of
these. In addition, our investment in pipeline land has grown
to 24,300 plots; this will help to drive outlet growth in the
years ahead as DPP is obtained on those sites.
Together, the sizeable investment in DPP and pipeline land
is a key determinant in our volume growth ambitions over
the next two financial years. As a result of our strengthened
position, in the year ahead, closing outlet numbers are
expected to increase by around 10% from a base of 254
as at 31 July 2021 (2020 – 276, 2019 – 271). Average outlet
numbers, which were 270 in the year, are likely to grow more
moderately as site openings are likely to be skewed towards
the second half of the year. This is in line with the expected
timing of planning decisions and construction starts, and this
will serve to deliver further, strong volume growth in financial
year 2023.
As well as investing in land that meets the Group’s immediate
needs, we have also continued to invest in our strategic land
bank, entering into option agreements to buy an additional
24 sites throughout the country (2020 – 15 sites, 2019 – 29
sites). The Group’s strategic land bank now comprises 30,400
plots (2020 – 27,300 plots, 2019 – 25,600 plots), providing a
useful long-term source of future land supply.
Going forward, we are further expanding our strategic land
team and are planning a step-change in our approach to
investment. Our dedicated strategic land headcount will
grow and in addition, every division will nominate a strategic
land champion to aid, resource and support the growth of
our strategic land portfolio. Their joint remit will be to capture
opportunities, primarily options, which are expected to obtain
planning permission over a five-to-fifteen-year time horizon.
This approach reflects the growing importance of strategic
land in providing a useful, alternative source of land supply
in a business of our size, and which can, on some sites, be
margin accretive.
In the foreseeable future, our strong balance sheet and
substantial cash resources will enable Bellway to target
further, high return opportunities in the land market, although
the Board notes that competition for good sites has become
more pronounced over recent months. Our healthy land
bank therefore allows the Group to remain selective and
retain its disciplined investment criteria.
We build quality
homes through design
evolution, this helps
efficiency and cost
savings.
Design, productivity, and labour and material costs
We continue to improve the efficiency of our operations
through several cost control and productivity initiatives, while
preserving or enhancing the quality of our product.
Our ‘Artisan Collection’ house-type range, which embodies
our focus on high standards and quality, with attractive street
scenes and an improved sense of placemaking, has now
been plotted across 29,000 plots (2020 – 21,000 plots, 2019 –
12,000 plots) on 212 developments (2020 – 164 developments,
2019 – 97 developments). In addition, our standardised design
drawings and specification continue to lead to improvements
in onsite efficiency and cost savings through design evolution
and national procurement deals.
The COINs system, a groupwide financial and commercial
IT system, is now in place across all our divisions and has
improved transparency and accountability in the divisional
site-valuation process. We are using technology to make
further improvements, with onsite surveying tasks now
performed electronically in many divisions, leading to
greater efficiency and more timely receipt of information.
We will continue to invest in technology to obtain greater
benefits from our commercial and procurement processes,
using improved information from COINs to aid our design
and procurement teams as we continue to refine the
‘Artisan Collection’.
Bellway p.l.c. Annual Report and Accounts 2021
38
Strategic Report Outlook
The Board recognises that there are wider economic
uncertainties because of Brexit and the continuing pandemic.
Notwithstanding these concerns, market conditions and
customer confidence are strong, and the success of the
vaccination programme is having a positive impact on
the UK’s prospective economic performance. In addition,
our substantial order book and our strengthened land bank
provide a solid platform for both future volume growth
and margin recovery in the years ahead. As a result, the
Board expects the Group to increase output by around
10% to over 11,100 new homes in the year ending 31 July
2022, with growth weighted towards the second half of
the financial year.
Longer-term, the industry fundamentals remain strong.
Bellway has significant cash holdings, providing resilience
and strategic flexibility. Our strategy of volume growth, and
our ‘Better with Bellway’ approach to sustainability, ensures
we can continue to increase the supply of high-quality new
homes, create long-term value for shareholders and make
a positive contribution for all our stakeholders.
Jason Honeyman
Group Chief Executive
18 October 2021
On a site level, we continue to undertake centralised layout
and ground-work reviews, to ensure that quality is preserved,
while driving further cost efficiencies in the construction
process. We have also developed a matrix to help determine
the optimum and most cost effective solution for retaining
walls, depending on aesthetic requirements and we continue
to encourage the sharing of best practice and new ideas
through cross-functional and divisional working groups.
Notwithstanding our strong commercial disciplines, overall
cost inflation during the year has been in the mid-single digits,
although this, in general, has been offset by rises in house
prices. We continue to see price inflation on commodities
such as steel, timber, MDF and polymers, but there are signs
that some of the more pronounced price increases over
recent months are beginning to subside.
There remain ongoing constraints in the supply chain and
intermittent labour shortages across the sector as, despite
the vaccine success, colleagues, subcontractors and
suppliers are subject to self-isolation requirements to curtail
the spread of COVID-19. In addition, the national shortage
of heavy goods vehicle drivers and recent disruption to fuel
supplies has had some impact on the availability of materials.
In general, these constraints are manageable by adopting
good procurement disciplines and forward planning.
They will, however, mean that construction output in the
first half of financial year 2022 is likely to remain similar to
that achieved in the first half of financial year 2021.
Recent trading
Bellway ended the year with a substantial forward order
book, comprising 7,082 homes (2020 – 6,588 homes, 2019 –
4,878 homes) with a value of £2,022.3 million1 (2020 – £1,760.2
million, 2019 – £1,223.9 million). In the first nine weeks of the
new financial year, trading has remained strong, with overall
weekly reservations at 218 per week (1 August to 4 October
2020 – 239 per week, 1 August to 29 September 2019 – 183 per
week). This is lower than the same period in the prior financial
year, when reservations were elevated due to pent-up
demand as the country emerged from the first national lock-
down, but 19.1% ahead of the first nine weeks of the financial
year ended 31 July 2020. Site numbers at the start of the new
year were slightly lower at 254 (2020 – 276, 2019 – 271), but are
expected to increase throughout the new financial year.
As a result of this positive start, the order book at 3 October
rose by 5.2% to £1,966.3 million1, (4 October 2020 – £1,869.6
million, 29 September 2019 – £1,311.6 million) and it comprised
6,731 homes (4 October 2020 – 6,624 homes, 29 September
2019 – 5,190 homes).
Bellway p.l.c. Annual Report and Accounts 2021
39
Strategic ReportStrategic Report Group Finance Director’s Review
Bellway’s volume growth
strategy and ability to
invest in high return land
opportunities will lead to
future long-term value
creation for shareholders.
Keith Adey
Group Finance Director
Group revenue (£m)
£3,122.5m
+40.3%
3,213.2
3,122.5
2,225.4
Operating profit (£m)
£479.7m
+92.6%
2019
2020
2021
2020
479.7
674.9
249.1
2019
2020
2021
Operating margin (%)(1)
21.0
15.4%
+420bps
15.4
11.2
2019
2020
2021
Profit before taxation (£m)
662.6
£479.0m
+102.4%
479.0
236.7
2019
2020
2021
Earnings per ordinary share (p)
437.8
316.9p
+102.4%
2020
316.9
156.6
2019
2020
2021
Total dividend per ordinary
share (p)
150.4
117.5p
+135.0%
117.5
50.0
2019
2020
2021
Bellway p.l.c. Annual Report and Accounts 2021
40
Strategic Report Underlying operating
profit (£m)(1) (4)
£531.5m
+65.2%
R
674.9
531.5
321.7
2019
2020
2021
Underlying operating
margin (%)(1) (4)
21.0
17.0%
+250bps
Underlying profit before
taxation (£m)(1) (4)
£530.8m
+71.6%
2019
2020
2021
662.6
530.8
309.3
2019
2020
2021
17.0
14.5
Average selling price (£000)
Private
Social
Total
Trading performance
The Group has delivered significant growth in housing
revenue, which rose by 40.9% to £3,107.1 million (2020 –
£2,204.4 million, 2019 – £3,180.1 million), with this only 2.3%
below the housing revenue generated in financial year 2019.
Other revenue was £15.4 million (2020 – £21.0 million, 2019 –
£33.1 million), and includes land and commercial sales, and
other ancillary items. Together with the increase in housing
revenue, total revenue increased by 40.3% to £3,122.5 million
(2020 – £2,225.4 million, 2019 – £3,213.2 million).
The table below shows the number and average selling price
of homes completed in the year, analysed geographically,
between private and social homes:
Homes sold (number)
Private
Social
Total
2021
2020
North
South
Group
3,983
3,913
7,896
3,182
2,669
5,851
2,242
2021
714
1,528
2020
526
1,145
1,671
2021
2020
4,697
5,441
10,138
3,708
3,814
7,522
North
South
Group
2021
2020
2021
304.4
389.7
346.7
281.8
394.0
332.9
116.7
187.5
165.0
2020
112.4
172.2
153.4
2021
275.9
332.9
306.5
2020
257.7
327.4
293.1
The growth in housing revenue has principally been
achieved by the recovery in volume output, with housing
completions rising by 34.8% to 10,138 (2020 – 7,522, 2019 –
10,892), with the proportion of lower value social completions
remaining unchanged at 22% (2020 – 22%, 2019 – 22%).
The market is strongest for good quality, affordably priced
homes in desirable locations, with our Scotland, Manchester,
Yorkshire and East Midlands divisions all enjoying a
particularly strong performance in the north of the country,
a reflection of the favourable market conditions and our
land investment over recent years.
In the South, our established Northern Homes Counties and
Essex divisions have performed well, both contributing over
700 completions in the year. In addition, our fledgling Eastern
Counties division delivered over 200 completions and is
expected to have a growing influence in the years ahead,
because of significant investment in both land and people.
Geographical mix changes and the benefit of some
underlying house price inflation have resulted in the overall
average selling price rising by 4.6% to £306,479 (2020 –
£293,054, 2019 – £291,968). As previously guided, the overall
average selling price is expected to moderate in the year
ending 31 July 2022 to around £295,000, with this a reflection
of changes in product mix.
Bellway p.l.c. Annual Report and Accounts 2021
41
Strategic ReportStrategic Report Group Finance Director’s Review continued
Underlying operating performance
The recovery in revenue, together with a less disruptive
COVID-19 influence on site productivity, resulted in
underlying gross profit rising by 54.4% to £651.9 million1,4
(2020 – £422.2 million, 2019 – £790.2 million).
The underlying gross margin was 20.9%1,4 (2020 – 19.0%,
2019 – 24.6%) and is stated after considering a charge of £21.7
million in relation to site extensions and enhanced health and
safety requirements due to COVID-19. These additional costs
were reflected in site-based valuations in the prior financial
year but continue to influence the underlying gross margin
as affected sites trade out.
Other operating income and expenses, which net to an
expense of £0.3 million (2020 – £3.1 million, 2019 – £5.6
million), relate to the cost of running our part-exchange
programme, with activity substantially reduced due to the
strength of the underlying second-hand market.
The underlying administrative expense increased to £120.1
million1,4 (2020 – £97.4 million, 2019 – £109.7 million), primarily
as payments under the staff and divisional management
incentive schemes were resumed, with no amounts being
paid in the prior financial year due to the pandemic. In
the year ahead, administrative expenses are expected to
increase as we make further investment in our land and
operational teams to achieve growth. In addition, we expect
to incur additional costs, both to attract and retain quality
people in a competitive market, and in relation to pension
contributions, IT security, insurance and ESG matters. As a
proportion of revenue, underlying administrative expenses
were 3.8%1,4 (2020 – 4.4%, 2019 – 3.4%), with the run rate
expected to be around 4%1,4 in the year ahead.
The underlying operating margin for the full financial year
was 17.0%1,4 (2020 – 14.5%, 2019 – 21.0%) and it is anticipated
that this will continue to recover to around 18%1,4 in the year
ahead, driven by increased volume output and a higher
proportion of completions from more recently acquired land.
Over the medium and longer-term, the Board is targeting
a long-term, sustainable, normalised underlying operating
margin of between 18%1,4 and 19%1,4 but recognises that
market influences in certain years may result in an outturn
either side of this range. This target is before considering any
net benefit that may arise from potential future house prices,
less cost inflation. It also takes into consideration additional
cost pressures arising from compliance with the requirements
of the Future Homes Standard.
Adjusting item: Net legacy building
safety improvements
The Group incurred an additional, net £51.8 million adjusting
expense, to help remediate certain legacy apartment
schemes, where fire safety improvements may be required
to comply with latest Government guidance. The net charge
comprises a gross expense of £66.9 million, less recoveries
received of £15.1 million.
This is a highly complex area, with judgements and estimates
in respect of the cost of remediation works, and scope of
the properties within the applicable Government guidance,
likely to evolve. The Board expects to incur further legacy
building safety expense for the year ending 31 July 2022,
but note that it believes all known substantial risks items are
appropriately provided for, having set aside a total of £164.7
million since 2017, demonstrating our commitment to act
responsibly with regards to this issue. The provision remaining
at 31 July 2021 was £116.0 million and several schemes are
currently undergoing remediation work. The often-complex
nature of developing appropriate remediation strategies,
on a site-by-site basis, means that it will take several years,
working with planning authorities, warranty providers,
subcontractors, suppliers and other third parties, to utilise
all of the remaining provision.
Bellway is pursuing further recoveries from suppliers,
subcontractors and professional advisors, where they have
fallen short of the standards required, but as these are not
virtually certain, an asset has not been recognised in the
balance sheet.
Operating profit
After taking these adjusting items into consideration, total
operating profit increased by 92.6% to £479.7 million (2020 –
£249.1 million, 2019 – £674.9 million).
Net finance expense
The net finance expense was £11.1 million1 (2020 – £13.4
million, 2019 – £14.4 million) and principally includes notional
interest on land acquired on deferred terms and bank interest.
Notional interest on land acquired on deferred terms reduced
by £0.4 million to £6.5 million (2020 – £6.9 million, 2019 – £7.8
million). Bank interest, which includes interest on drawn
monies, commitment fees and refinancing costs, decreased
to £3.1 million (2020 – £6.0 million, 2019 – £6.3 million),
principally reflecting the Group’s reversion to an average net
cash of £266.3 million1 during the year (2020 – net debt of
£55.4 million, 2019 – net debt of £165.4 million). In addition,
the Group incurred an interest charge of £1.6 million on its US
Private Placement (‘USPP’) debt (2020 – nil, 2019 – nil).
Bellway p.l.c. Annual Report and Accounts 2021
42
Strategic Report A robust balance sheet provides strength
and flexibility
The balance sheet principally comprises amounts invested
in land and work-in-progress, with total inventories rising
by 4.4% to £4,032.2 million (2020 – £3,863.0 million, 2019 –
£3,477.6 million). The carrying value of land rose to £2,483.9
million (2020 – £2,216.2 million, 2019 – £2,004.4 million),
reflecting the substantial investment in new sites during
the year.
Work-in-progress reduced by 4.3% to £1,431.4 million (2020 –
£1,496.1 million, 2019 – £1,298.2 million) and was 46.1% (2020
– 67.9%, 2019 – 40.8%) as a proportion of housing revenue.
The reduction reflects the stronger than expected completion
profile in the second half of the financial year and a weighting
towards plots in the earlier stages of construction.
In relation to its legacy, defined benefit pension scheme,
the Group had a retirement benefit asset of £10.2 million
(2020 – £1.3 million, 2019 – £2.8 million) at 31 July, reflecting
an ongoing commitment to fund this future, long-term
obligation. The improvement on the prior year mainly reflects
investment returns on assets, together with updates to
demographic assumptions.
Following cash dividend payments made in the year totalling
£104.7 million, the net asset value rose by 9.8% to £3,287.8
million (2020 – £2,994.0 million, 2019 – £2,921.2 million),
representing a net asset value per share of 2,664p1 (2020 –
2,427p, 2019 – 2,372p).
As a result of the recovery in profitability and improved asset
turn, underlying RoCE increased to 16.9%1,4 (2020 – 10.8%, 2019
– 24.7%) or 15.0%1,4 (2020 – 9.8%, 2019 – 22.1%), when including
land creditors as part of the capital base. Post-tax return on
equity was 12.4%1 (2020 – 6.5%, 2019 – 19.8%).
Bellway’s volume growth strategy and ability to invest in high
return land opportunities will lead to future long-term value
creation for shareholders.
Keith Adey
Group Finance Director
18 October 2021
Profit before taxation
Profit before taxation increased by 102.4% to £479.0 million
(2020 – £236.7 million, 2019 – £662.6 million). The underlying
profit before taxation rose by 71.6%, to £530.8 million1,4 (2020
– £309.3 million, 2019 – £662.6 million).
Taxation
The corporation tax charge was £88.3 million (2020 – £43.8
million, 2019 – £124.0 million), reflecting an effective tax rate
of 18.4% (2020 – 18.5%, 2019 – 18.7%).
The effective tax rate will increase in the years ahead as
the standard rate of corporation tax rises to 25%, with effect
from April 2023. In addition, the Government has plans to
introduce a Residential Property Developer Tax (‘RPDT’),
likely to be from April 2022, and at a rate to be determined,
to seek a further industrywide contribution towards its
Building Safety Fund.
Profit for the year
After considering taxation, profit for the year rose by 102.5%
to £390.7 million (2020 – £192.9 million, 2019 – £538.6 million).
The underlying profit for the year rose by 71.9%, to £432.7
million1,4 (2020 – £251.7 million, 2019 – £538.6 million).
Basic earnings per share (‘EPS’) rose by 102.4% to 316.9p
(2020 – 156.6p, 2019 – 437.8p).
Net cash and financial position
Bellway has a strong balance sheet and ended the year
with net cash of £330.3 million1 (2020 – £1.4 million, 2019 –
£201.2 million), representing an ungeared1 position (2020
– ungeared, 2019 – ungeared). This is ahead of previous
expectations, reflecting the completion of additional homes
and changes in the timing of anticipated cash outflows in
relation to newly acquired land. Committed land obligations
remain low, at £455.8 million (2020 – £343.6 million, 2019 –
£297.9 million). Including land creditors, net debt stood at
£125.5 million1 (2020 – £342.2 million, 2019 – £96.7 million),
representing very modest adjusted gearing of 3.8%1 (2020 –
11.4%, 2019 – 3.3%).
Including renewals since 1 August 2021, the Group has
committed bank facilities of £370 million, which mature in
tranches through to 31 December 2025. In addition, the
Group entered into a contractual arrangement during the
year to issue a sterling USPP for a total amount of £130
million, as part of its ordinary course of business financing
arrangements. This USPP debt, which has maturity dates in
seven and ten years, was drawn down on 17 February 2021.
In aggregate, this provides the Group with access to total
committed debt lines of £500 million, thereby securing a
long-term and diversified source of capital. This, together
with the Group’s substantial cash resources, provides
financial resilience in the event of unforeseen economic
circumstances. In addition, it ensures that Bellway has
significant capacity to achieve its growth strategy by investing
in compelling land opportunities, provided they meet our
minimum financial acquisition criteria.
Bellway p.l.c. Annual Report and Accounts 2021
43
Strategic ReportStrategic Report Better at interacting with
local communities
At Bellway we are passionate about supporting our local communities.
During the COVID-19 pandemic many of our divisions have been helping
foodbanks and soup kitchens close to our developments to support those
most in need.
Our North West division has made a donation to Whitby’s Pantry in Preston
who provide a valuable local service which has seen a surge in demand
during the pandemic. The project which is part funded by the National
Lottery provides members with reduced cost food and household items.
Our Yorkshire division has donated an oven to a Leeds soup kitchen after
their old appliance had broken down. Hot food can now once again be
served for up to 200 families a week who use the charity’s vital services.
Better with
Bellway p.l.c. Annual Report and Accounts 2021
44
Strategic Report Better with Bellway – a responsible and
sustainable approach to business
The ongoing development of ‘Better
with Bellway’, our new integrated
sustainability framework, is a long-term
and strategic priority for the Group,
alongside our other strategic priorities
of volume growth and value creation
for shareholders.
We have already established a diverse and well-resourced
steering group, whose remit is to embed sustainable
and responsible working practices within the day-to-day
operations of the business. Working with external consultants
and experts, we have engaged with a wide range of
stakeholders to understand the sustainability priorities facing
a variety of different groups. Using the results of this research
and overlaying this with our own understanding of risks and
business priorities, we are now developing a framework
of strategic sustainability priorities, KPIs and targets, with a
view to defining and reporting upon our strategy in the
year ahead.
In the meantime, progress has been made in several key
areas, as reported below.
Reducing our carbon footprint
In 2018, we set a target to reduce scope 1 and 2 carbon
emissions by 10% per home sold, by the year ending 31
July 2023. We are pleased to report that we have achieved
this target two years early, not only reducing scope 1 and 2
emissions per home sold by 24.0% to 1.9 tonnes (2020 – 2.8,
2019 – 2.4, 2018 – 2.5), but also reducing total scope 1 and 2
emissions by 22.8% to 19,484 tonnes (2020 – 20,989 tonnes,
2019 – 25,715 tonnes, 2018 – 25,253 tonnes) compared to
financial year 2018. Amongst other measures, we achieved
this principally by extending our use of Renewable Energy
Guarantees of Origin electricity supplies, beyond owned
divisional offices and development compounds, to also
include plots under construction, show homes and sales
offices. As a result, over 69% of our electricity is now supplied
from renewable sources. We are also trialling green diesel,
made from hydrotreated vegetable oils, to use in our site
generators and forklift telehandlers. If successful, this has
the potential to further reduce our remaining scope 1 and
2 emissions.
Reduction of scope 1 and 2
emissions per home sold
Electricity supplied
from renewable sources
(24%)
69%
Going forward, the main challenges facing the sector
in relation to carbon reduction are adhering to the new
requirements of the Government’s Future Homes Standard.
These are designed to reduce regulated scope 3 carbon
emissions, arising throughout the lifetime of new homes
built after 2025, by 75% to 80% compared to a base level
determined by the 2013 building regulations. We have several
initiatives in place to achieve this, including the construction
of exemplar trial homes, on three sites across the Group,
which use materials and products that already meet these
stringent standards. We are also engaging with supply-chain
partners to understand the technical constraints of the new
requirements, as well as investing in energy monitoring
equipment to assess customer energy consumption,
post-completion.
More broadly, we are also looking to reduce embodied
scope 3 carbon emissions, arising throughout the supply
chain and construction process. Initiatives include a
more widespread trial of timber frame housing across the
Group’s northern divisions, outside of Scotland, where this
approach to construction is more routinely used. We also
continue to progress a trial of modular homes at our site
in Tattenhoe, Milton Keynes, in partnership with Homes
England and are developing a joint venture site in Cherry
Hinton, Cambridgeshire, where our intention is that the
heating systems will not use traditional, carbon producing,
gas powered boilers. We will use our learnings from these
developments to help to influence our future carbon
reduction strategy.
We have recently engaged The Carbon Trust to help us
measure our groupwide carbon emissions, including scope
3 emissions, using financial year 2019 as a base. We will use
the results of this exercise to set ambitious, science-based
carbon reduction targets, over and above the impending
regulatory requirements, which are already challenging.
In some instances, the adoption of these new targets will
test established business practices, but it is incumbent upon
Bellway to respond appropriately to mitigate the effects of
climate change.
We look forward to reporting on these new targets and
progress made towards achieving them in the next
financial year.
Quality and our ‘Customer First’ agenda
We are determined to continue building upon our reputation
as one of the country’s leading, national housebuilders,
ensuring that customers are at the core of what we do, and
that the Bellway brands are synonymous with trust.
We are proud that 39 of our site managers (2020 – 44,
2019 – 42) were recognised with NHBC Pride in the Job
Awards, a testament to their hard work and dedication,
especially given the ongoing challenges of responding
effectively to COVID-19.
Site managers recognised with
NHBC Pride in the Job Awards
39
Bellway p.l.c. Annual Report and Accounts 2021
45
Strategic ReportStrategic Report Better with Bellway – a responsible and
sustainable approach to business continued
Our ‘Customer First’ agenda was formally launched to
colleagues in April 2021 and is designed to enhance the
customer experience and help Bellway to exceed customer
expectations in respect of the quality of product and service
levels. We have so far restructured our divisional customer
service teams to ensure that we are best placed to give the
highest level of service to our customers. We are providing
additional training to colleagues, prioritising behavioural
and leadership training to enshrine a strong ‘Customer
First’ culture within the Group. We have also increased the
number of visits customers are able to make to site during
the construction process, thereby ensuring they are better
informed throughout the build process.
As a result of our continued efforts, we are delighted to
have achieved the status as a five-star homebuilder3 for
the fifth consecutive year, achieving a record, positive
score of 93.5% in the last survey year, with this assessment
undertaken eight weeks after customer completion dates.
Going forward, we will continue to target improvements to
our performance in the Home Builders’ Federation follow-
up customer satisfaction survey, which is undertaken
nine-months after the completion date. While the customer
response rates reduce considerably compared to the initial
eight-week, post-completion survey, we are determined to
build upon our latest score of 78.3% at 1 September 2021.
We have plans to help achieve this in the year ahead,
including ongoing engagement, training, and monitoring of
subcontractor performance, together with the development
of a customer portal, which will act as a single reference point
for information for customers throughout the sales process
and beyond.
Constructing safe and quality new homes
Building new homes, safely
Ensuring the health and safety of our colleagues,
subcontractors and site visitors remains a priority for Bellway
and we have continued to seek ways to refine our approach.
We have engaged a new health and safety advisory service,
Safety Services (UK) Limited, who have improved data
collection systems and helped us to better identify areas
that require improvement. In addition, we have improved
internal communications to help ensure that colleagues and
subcontractors are appraised of legislative changes, internal
targets, and initiatives.
While our response to COVID-19 has continued to evolve, we
retain key measures such as enhanced training, restrictions
on the number of office workers, sanitising stations and
clearly marked signage to help prevent the spread of the
virus. We also continue to promote good mental health
across the workforce and our trained mental health first
aiders continue to help identify and assist those colleagues
who may need support. Our seven-day reportable incidence
rate also remains low at 336.49 incidents per 100,000 site
operatives (2020 – 203.12, 2019 – 324.87).
Incidents per 100,000
site operatives
336.49
We work with all
our employees and
subcontractors to
ensure that safe working
practices are promoted
and embedded on all
of our sites
Legacy building safety improvements
We continue to take a proactive and responsible approach to
concerns about fire safety in high-rise buildings across the UK.
Bellway recognises its responsibilities in its legacy apartment
portfolio and continues to review combustion risks, in
external wall systems, on past high-rise developments.
As reported in March, we have continued working
with building owners and warranty providers, who are
undertaking their own investigative works, to determine
whether the combination of materials used in the
construction of whole wall systems adequately prevents
the spread of fire. As set out in the Chairman’s statement
and Group Finance Director’s review, we have set aside
an additional net amount, of £51.8 million for the full year,
to continue supporting residents of affected buildings.
The additional costs relate to developments where initial
investigative works had not been previously concluded.
In addition, they are associated with a widening scope of
works on certain, more complex sites, with these being
required to achieve an acceptable remediation strategy.
In addition to our own provisions and approach to legacy
building safety issues, we have also participated in the
Government’s consultation on establishing the RPDT to raise
revenue for the Government’s Building Safety Fund.
Becoming an employer of choice
Bellway’s aim is to become an ‘employer of choice’, to attract,
train and retain the highest calibre individuals to contribute to
the ongoing success of the Group.
In that regard, we are delighted to continue to make progress
as a member of the 5% Club, with 8.5% of our employees
engaged in ‘learning and earning’ positions (2020 – 8.3%,
2019 – 6.1%). We have plans to invest further in early years
talent, through the ongoing expansion of our graduate and
apprenticeship programmes. In addition, our new learning
and development team are creating clearly defined career
paths to aid future colleague progression and our Senior
Leaders’ Development Programme is also helping to identify
and develop the rising stars of the future.
Employees engaged in ‘learning
and earning’ positions
8.5%
Bellway p.l.c. Annual Report and Accounts 2021
46
Strategic Report Attracting and retaining the best talent also means embracing
equality, diversity and inclusion within our organisation.
To achieve this, we have launched a new Equality, Diversity
and Inclusion Policy, which outlines our commitment
to becoming a more inclusive employer. All employees,
including our senior leaders, have undertaken diversity and
inclusion training, which encourages colleagues to challenge,
reflect and approach scenarios from a different perspective.
We have also launched our first diversity and inclusion
network group, ‘Balance’, in February 2021 which is designed
to empower individuals and raise awareness of potential
constraints to career progression within Bellway.
Evolving working practices, because of the pandemic,
have given us an opportunity to reflect upon our traditional
approach to work and it has become clear that better
productivity, greater inclusion, and an improved work-life
balance can be achieved by a more flexible approach to
employment. We have therefore introduced flexibility with
regards to colleagues’ start and finish times and have also
launched our new Agile Working Policy, with the intention
that this will allow eligible employees to permanently work
from home for one day per week.
Separately, we have undertaken our second-ever employee
engagement survey and the initial feedback is very positive,
with 93% of colleagues who responded feeling proud of the
quality service Bellway provides to our customers, and 89%
willing to recommend Bellway to others as a great place to
work. The survey also confirmed excellent progress on the
priorities agreed following last year’s results relating to training
and development, internal communications, and leadership.
Colleagues who responded
feeling proud of the quality
service Bellway provides to
our customers
Colleagues willing to
recommend Bellway to
others as a great place
to work
93%
89%
As a responsible employer, we recognise the importance
of making a meaningful pension contribution, in order that
colleagues can afford to retire when it is right for them to
do so. This is especially important for our site-based staff,
who often have physically demanding jobs. Accordingly,
from August 2021, we have increased the available
matched employer pension contribution from 5% to 7%
for all employees, including our site-based construction
staff and directly employed tradespeople and labourers.
We will continue to review our pension provision in the
future to ensure that our overall remuneration offering
remains competitive.
In the year ahead, we will continue to take action to
ensure that Bellway remains an attractive place to work
and will continue to work towards achieving full Living
Wage accreditation.
Charitable giving
We are committed to continuing our support for local and
national charities, as well as the communities in which we
develop. Fundraising activity has been more challenging
because of the pandemic, however, despite this, we have
raised and donated £520,413 to good causes in the year, of
which £128,413 was raised by employees, subcontractors
and suppliers.
Financial year 2021 was the fifth year of our partnership with
Cancer Research UK (‘CRUK’) and employee engagement
for this worthwhile cause continues to be strong.
Notwithstanding the limited fundraising opportunities over
the past year, our colleagues, suppliers, and subcontractors
have, working with Bellway, raised a total amount of
£1,954,829 in the five years since our partnership began, a
fraction short of our £2 million target. We have extended
our partnership with CRUK until 31 December 2023, over
which time, we hope to increase our fundraising total to
£3 million, supported by the imminent launch of our “3 for
’23” campaign.
Total raised and donated
to good causes in 2021
Amount raised by employees,
subcontractors and suppliers.
£520,413
£128,413
Bellway’s Yorkshire
division has given
local charity ‘HELP’ a
generous donation
of PPE so it can safely
continue its vital, front-
line community work.
Further initiatives
Our ‘Better with Bellway’ strategic approach also includes
initiatives with regards to biodiversity, sustainability in the
supply chain and resource efficiency, which we intend to
report on our website in the year ahead.
Next steps
We look forward to publishing our fully integrated ‘Better
with Bellway’ strategy, along with appropriate targets and
KPIs, in 2022.
Bellway p.l.c. Annual Report and Accounts 2021
47
Strategic ReportStrategic Report Principal Risks
The Board has completed its assessment of the Group’s emerging and principal
risks. The following nine principal risks to our business have been identified:
Risk and description
Strategic relevance
KPIs
Mitigation
• Greenhouse gas
• Continual monitoring of new and
emissions.
• Carbon emissions
per completed
home.
Climate change
Failure to evolve
business practices and
operations in response
to climate change
including physical
impacts, reporting
requirements and social/
market expectations.
There is an increase in
this risk given forthcoming
regulatory changes and
reporting requirements, as
well as increasing market
focus and expectations.
• There is an increased focus
on the actions taken by
businesses in response to
climate change and the
disclosures made. Failure to
improve policies, reporting
and performance in line
with new regulations and
heightened social/market
expectations could lead
to financial penalties and
reputational damage.
• The physical impacts of
climate change (such as
extreme weather) could
lead to disruptions within
the supply chain and
build programmes.
evolving requirements as part of our
legal and regulatory compliance
framework, including the Future
Homes Standard.
• Plans in place to meet TCFD
requirements.
• Dedicated Head of Sustainability
to assess risks relating to climate
change, monitor performance and
drive improvement.
• Consultation with specialist external
advisers and subject matter experts
(e.g. sustainability consultants).
• Investment in energy-saving
measures for offices and sites,
including transition to REGO
certified electricity.
• Procurement of materials (e.g. timber)
from sustainable sources.
• Regular review of the design and
features of new homes to increase
energy efficiency.
• Commencing development
of science-based targets.
• Systems are in place to select,
appoint, monitor, manage and build
long-term relationships with our
subcontractors and suppliers.
• Competitive rates and prompt
payment for our subcontractors
and suppliers.
• Group-wide purchasing
arrangements are in place.
• Continued review and monitoring
of supplier and subcontractor
performance, with regular
communications to understand their
position and any potential issues with
their own supply chain.
Construction resources
Shortages of both
appropriately skilled
subcontractors and
building materials at
competitive prices.
No change.
• Failure to secure
required and appropriate
resources causes delays
in construction, impacting
the ability to deliver volume
growth targets.
• Pricing pressure would
impact returns.
• Number of
homes sold.
• Customer
satisfaction
score.
• Employee
turnover.
• EPS.
Bellway p.l.c. Annual Report and Accounts 2021
48
Strategic Report Risk and description
Strategic relevance
KPIs
Mitigation
• The economic uncertainty
• EPS.
brought about by COVID-19,
in addition to the factors
below, affects construction
and sales activity which
ultimately impact the
Group’s liquidity:
• Number of
homes sold.
• RoCE.
• Gross margin.
• Order book value.
– Lack of high loan-to-value
mortgages.
• Land bank
(with DPP).
• Operating margin.
• Dividend per
ordinary share.
• Operating profit.
• Net asset value per
• Strong balance sheet as at 31 July
2021 with committed bank facilities
and USPP debt.
• Regular review of liquidity and
cashflow at a Group level.
• Targeted spend on land and work
in progress.
• Maintenance of business resilience
plans supported by investment in
IT to enable robust homeworking.
• Safe working practices and
arrangements implemented
across offices and sites for staff,
subcontractors and customers.
– Government imposed
restrictions/guidance.
– Maintaining social
distancing practices.
– Issues in the supply chain
or high levels of staff/sub-
contractor absence.
• Damage to reputation
if the Group is not
perceived to be following
Government guidelines and
acting responsibly.
• The impact of these external
factors would be on the
ability to sell houses and
apartments and on returns.
ordinary share.
• Strong, long-term relationships with
• Employee turnover.
• Reservations rate.
• Number of
homes sold.
• Order book.
• Reservations rate.
• Customer
satisfaction score.
• EPS.
• RoCE.
subcontractors and suppliers.
• Group-wide purchasing
arrangements, with prompt payments
made.
• Ongoing review of supplier and sub-
contractor arrangements, including
regular communications.
• Ongoing monitoring of key business
metrics and development of action
plans as necessary.
• Product range and pricing strategy
determined based on regional
market conditions.
• Use of sales incentives, such as
part-exchange, to encourage the
selling process.
• Use of Government-backed schemes
to encourage home ownership.
• We continue to monitor business
performance and build a robust
future-proof business with a solid
strategy and sound financial controls.
COVID-19
Ongoing uncertainty
over the impact of
COVID-19 on the Group’s
operational and financial
performance.
No change.
External environment
There are a number of
external factors that
could affect our ability to
generate sales, including
but not limited to:
• Economic factors,
especially house
price inflation and
interest rates.
• Mortgage availability.
• Government
housing policy.
• Uncertainty over post-
BREXIT agreements.
No change.
Bellway p.l.c. Annual Report and Accounts 2021
49
Strategic ReportStrategic Report Principal Risks continued
Risk and description
Strategic relevance
KPIs
Mitigation
• In addition to the moral
• Number of RIDDOR
seven-day lost
time accidents
per 100,000 site
operatives.
• NHBC health and
safety benchmark.
• The Board considers health and
safety issues at every meeting.
• Regular visits to sites by the Health
and Safety Team (independent of our
divisions) and external consultants to
monitor health and safety standards
and performance against the health
and safety policies and procedures.
obligation and the
requirement to act in
a responsible manner,
injuries to any individual
while at one of our
business locations would
delay construction and
could result in criminal
prosecution, civil litigation
and reputational damage.
• Failure to attract and retain
people with appropriate
skills will affect our ability
to perform and deliver our
volume growth target.
Health and safety
There are significant
health and safety
risks inherent in the
construction process.
No change.
Human resources
Inability to
attract and retain
appropriate people.
There is an increase in
this risk given the current
level of competitiveness for
candidates in the job market
and the skills shortage faced
by the industry.
• Employee turnover.
• Continued development of the
• Number of
graduates and
apprentices.
• Number of people
who have worked
for the Group for
ten years or more.
• Training days per
employee.
• Senior
management
gender split.
Group HR and implementation of our
people strategy.
• Centralised recruitment support and
employee engagement activities.
• Monitoring and review of staff
turnover and feedback from
exit interviews.
• Competitive salary and benefits
packages which are regularly
reviewed and benchmarked.
• Succession plans in place and key
person dependencies identified
and mitigated.
• Increased level of training provided
to employees.
• Graduate, apprentice and site
manager programmes in place.
• Development of our diversity
and inclusion activity to make the
sector more attractive to a wider
demographic.
• Group-wide systems are in operation
which are centrally controlled by a
specialist in-house IT team with an
outsourced support function in place.
• Continued investment in systems.
• Regular review and testing of our
security measures, contingency plans
and IT security policies.
• Security Committee in place.
IT and security
Failure to have suitable
systems in place and
appropriate back-up,
contingency plans and
security policies.
• Poor performance of our
systems would affect
operational efficiency,
profitability and our
control environment.
• EPS.
There is a decrease in this
risk given improvements
to IT systems and controls
during the financial year.
Bellway p.l.c. Annual Report and Accounts 2021
50
Strategic Report Risk and description
Strategic relevance
KPIs
Mitigation
Land and planning
Inability to source
suitable land at
appropriate gross
margins and RoCE.
Delays and complexity in
the planning process.
No change.
• Insufficient land would affect
our volume growth targets.
• Land bank
(with DPP).
• Failure to buy land at the
right margin would have
a detrimental effect on
future returns.
• Failure to obtain planning
within appropriate
timescales would have a
detrimental impact on our
growth prospects and have
an adverse effect on returns.
• Number of
homes sold.
• RoCE.
• Gross margin.
• EPS.
• Number of plots
acquired directly in
land bank with an
implementable DPP.
• Number of plots
converted from
medium-term
pipeline to land
with DPP.
• Number of plots
in our pipeline
land bank.
• Number of plots
identified in our
strategic land bank
with a positive
planning status.
• Budgeting and forecasting of growth
targets to ensure land bank supports
strategic target.
• Targeted approach to land
acquisitions, with pre-purchase
due diligence and viabilities on all
proposed land purchases.
• Authorisation of all land purchases
in accordance with Group
procedures and our Approvals Matrix.
• Group and divisional planning
specialists provide advice and
support to the divisions to assist with
securing planning permissions.
• Management of immediate, medium-
term and strategic land to maintain an
appropriate balance of land in terms
of quantity and location.
• Investment in strategic land,
more sites with DPP.
Legal and regulatory compliance
Failure to comply
with legislation
and regulatory
requirements.
No change.
• Lack of appropriate
• Volume growth.
• In-house expertise from Group
• EPS.
• Number of
homes sold.
• RoCE.
• Gross margin.
procedures and compliance
would result in delays
in land development,
construction and sales
completions plus possible
re-work to sites, all of
which could have a
detrimental impact on
profitability and reputation,
potentially leading to
financial penalties and other
regulatory consequences.
• Changes may occur as
a result of the MHCLG’s
Building Safety Programme
and the work being
carried out by the CMA
and Government on
leasehold reform.
Company Secretariat, Legal, Health
and Safety and Technical functions
who advise and support divisions
on compliance and regulatory
matters.
• Consultation with Government
agencies, specialist external legal
advisers and subject matter experts
(e.g. fire safety consultants).
• Strengthened Group-wide
policies, guidance and training
for key regulatory matters,
supported by reporting and
whistleblowing procedures.
• Continual monitoring and review of
changes to legislation and regulation,
including any supporting guidance
and advice notes.
• Continual liaison with the HBF on
regulation and compliance matters.
Emerging risks
The Group faces a number of emerging risks that have the potential to be significant to the achievement of our strategy,
but which at present cannot be fully defined and assessed. These are considered as part of our established risk management
framework, discussed by the Board regularly and elevated to principal risks when warranted.
Bellway p.l.c. Annual Report and Accounts 2021
51
Strategic ReportStrategic Report Risk Management
Our established framework for managing risks has
continued to be in place across the business throughout this
financial year, with responsibility to implement the Board’s
policies on risk management and internal control sitting
with management.
Our risk management objectives continue to be:
• Assessing emerging and principal risks against an agreed
appetite for risk, which is regularly reviewed.
• Improving the balance of risk and return through
developing and maintaining a proactive, risk-aware culture.
• Ensuring there is a consistent approach for the
identification, assessment, control, monitoring, follow-up
and reporting of risks.
• Developing and implementing action plans to ensure that
risks, are mitigated where required, are within our agreed
risk appetite and that improvements are made to our
control environment.
• Ensuring the approach to risk management meets the
needs of the business, senior management and all key
stakeholders.
Risk management framework
The Board
Audit Committee
• Overall responsibility for risk management.
• Oversee the risk management framework, policy
• Review, challenge and approve the risk management
framework and corresponding policy, processes and
annual risk plan.
and processes.
• Review routine risk reports and utilise risk information
to review and approve assurance plans and priorities.
• Review and agree risk appetite.
• Provide assurance over risk management to the Board.
• Conduct a robust assessment of the emerging and
• Monitor the progress of risk mitigating actions
principal risks facing the Group.
• Review and challenge risk reports.
and recommendations.
Executive Management
Head of Risk
• Review, challenge and approve the risk management
framework and corresponding policy and processes.
• Design and implement the risk management
framework and corresponding policy and processes.
• Review and challenge risk information against stated
• Facilitate and implement the risk management
business objectives.
• Approve risk treatments and actions.
• Approve risk reports for the Board.
• Review and agree risk appetite.
Key
Reports to
Directs and monitors
framework, policy and processes.
• Undertake risk management activities and produce
reports in accordance with risk management policy.
Risk management roles and responsibilities
In all businesses, responsibility for managing risk sits with every employee. In undertaking their roles, employees are assisting in
identifying, assessing and managing risks. Specific roles and responsibilities, as set out in our risk management framework and
corresponding policy, are set out in the diagram below:
Risk management process
Identify
all business
areas
Evaluate
severity of
risks
Treat
to bring within
risk appetite
Action
mitigate risks
(where needed)
Report
monitor risks and
report progress of
mitigation
Bellway p.l.c. Annual Report and Accounts 2021
52
Strategic Report
Risk management process
A risk register is maintained, detailing all of our potential
risks, categorised between strategic, operational, financial,
compliance and reputational risks. The risk management
processes are set up to ensure all aspects of the business are
considered, from strategy through to business execution and
including any specialist business areas.
Management of financial risk
The main risks associated with the Group’s financial
instruments held during the year have been identified as
credit risk, liquidity risk, interest rate risk and housing market
risk. The Board is responsible for managing these risks and
the policies adopted, which have remained unchanged
during the year and are set out below.
The risk register is reviewed on a regular basis as part of
the management reporting process, resulting in the regular
assessment of each risk, its severity and any required
mitigating actions. The severity of risk is determined based on
a defined scoring system assessing risk impact and likelihood.
A summary of principal risks is reported to management,
the Audit Committee and the Board, which is mainly,
but not exclusively, comprised of risks considered to be
outside of our risk appetite after mitigation. This summary is
reviewed throughout the year, with the Board systematically
considering the risks, taking into account any changes which
may have occurred.
Once a year, via a meeting of the Audit Committee which all
Directors attend, the Board determines whether the system
of risk management is appropriately designed and operating
effectively. The Directors confirm that they have conducted a
robust assessment of the principal risks facing the Group.
More information on risk management and internal controls
is included within the Audit Committee Report on pages 80
to 89.
Financial risk management
The Group’s financial instruments comprise cash, bank loans
and overdrafts, fixed rate sterling USPP notes and various
items such as trade receivables and trade payables that arise
directly from its operations.
The main objective of the Group’s policy towards financial
instruments is to maximise returns on the Group’s cash
balances, manage the Group’s working capital requirements
and finance the Group’s ongoing operations.
Capital management
The Board’s policy is to maintain a strong capital base to
underpin the future development of the business in order
to deliver value to shareholders. The Group finances its
operations through reinvested profits, bank borrowings, fixed
rate sterling USPP notes, cash in hand and the management
of working capital.
The dividend is determined following careful consideration
of capital requirements, as well as the Group’s operational
capability to deliver further long-term volume growth. If the
final dividend is approved, the total dividend will be covered
by total underlying earnings by 2.7 times (2020 – 3.1 times).
Credit risk
The Group’s exposure to credit risk is largely mitigated as the
vast majority of the Group’s sales are made on completion
of a legal contract, at which point monies are received
in exchange for transfer of legal title. There is no specific
concentration of credit risk in respect of home sales as the
exposure is spread over a number of customers.
In respect of trade and other receivables, the amounts
presented in the balance sheet are measured at amortised
cost less a loss allowance for expected credit losses which
are assessed on the basis of an average weighting of the risk
of default (see note 8 to the accounts). For this purpose, a
default is determined to have occurred if the Group becomes
aware of evidence that it will not receive all contractual
cash flows that are due. Trade and other receivables
includes £5.9 million (2020 – £12.4 million) due from Homes
England relating to the Help-to-Buy scheme. As Homes
England is a UK Government agency, the Group considers
the risk of default to be minimal. Furthermore, the Group
had £39.6 million (2020 - £55.5 million) of financial assets
relating to loans made by Bellway to equity accounted joint
arrangements (note 12). The counterparties to these loans
are expected to make a profit and therefore repay the loans
in full. The Group therefore considers the risk of default to be
minimal.
No credit limits were exceeded during the reporting period or
subsequently and the Group does not anticipate any losses
from non-performance by these counterparties.
The Board considers the Group’s exposure to credit risk to be
acceptable and normal for an entity of its size, in the industry
in which it operates.
Liquidity risk
The Group finances its operations through a mixture of equity
(comprising share capital, reserves and reinvested profit)
and debt (comprising bank overdraft facilities, borrowings
and fixed rate sterling USPP notes). The Group manages its
liquidity risk by monitoring existing facilities and cash flows
against forecast requirements based on a three-year rolling
cash forecast.
Bellway p.l.c. Annual Report and Accounts 2021
53
Strategic ReportStrategic Report Risk Management continued
The Group’s Treasury Policy has, as its principal objective,
the maintenance of flexible debt facilities in order to meet
anticipated borrowing requirements. The Group’s banking
arrangements outlined in note 18 to the accounts are
considered to be adequate in terms of flexibility and liquidity
for its medium-term cash flow needs. Relationships with
banks, fixed rate sterling USPP noteholders and overall
cash management are co-ordinated centrally. The Group is
operating well within its financial covenants and available
debt facilities.
Short-term cash surpluses are placed on deposit at
competitive rates with high quality counterparties. Other
than those disclosed, there are no financial instruments
or derivative contracts. The Board therefore considers the
Group’s liquidity risk to be mitigated.
In relation to land payables, certain payables are secured on
the respective land asset held (see note 9 to the accounts).
No other security is held against any other financial assets of
the Group.
Interest rate risk
Interest rate risk reflects the Group’s exposure to fluctuations
in interest rates. The risk arises because the Group’s overdraft
and floating rate bank loans bear interest based on LIBOR.
The Group’s attitude to interest rate risk and forecast debt is
influenced by the existing and forecast conditions prevailing
at the time that each new interest-bearing instrument is
entered into. This will determine, amongst other things, the
term and whether a fixed or floating interest rate is obtained.
During the year ended 31 July 2021, it is estimated that
an increase of 1% in interest rates applying to the full year
would have increased the Group’s profit before taxation by
£2.7 million (2020 – decreased profit before taxation by £0.5
million).
Housing market risk
The Group is affected by movements in UK house prices.
These in turn are affected by factors such as credit availability,
employment levels, interest rates, consumer confidence and
supply of land with planning.
While it is not possible for the Group to fully mitigate housing
market risk on a national macroeconomic basis, the Group
does continually monitor its geographical spread within
the UK, seeking to balance investment in areas offering
the best immediate returns with a long-term spread of its
operations throughout the UK to minimise the effect of local
microeconomic fluctuations.
Going concern statement
After conducting a full review, the Directors have a
reasonable expectation that the Group has adequate
resources to fund its operations for at least the period to 31
July 2023, aligning with the first year-end after the minimum
12 month assessment period. For this reason, they continue
to adopt the going concern basis in preparing the financial
statements as discussed further on pages 114 and 129..
Viability statement
In accordance with provision 31 of the UK Corporate
Governance Code, the Directors have assessed the viability
of the Group over the period to 31 July 2025, which is longer
than required by the going concern assumption. This period
is consistent with the Group’s detailed bottom-up forecasts
which assess future profitability, cash flows and the land bank
and are overlayed with prudent Group level assumptions.
Factors considered in assessing the long-term viability
In assessing the Group’s forecasts and long-term viability, the
following factors are considered:
Factor
Consideration
Group’s latest
performance
Group’s current
financial position
This considers the trading performance
in both the year ended 31 July 2021
and in the first nine weeks of the new
financial year including any changes to
selling prices. In addition, any relevant
external factors that may affect Bellway,
such as any changes to government
policies, regulations and mortgages,
were considered.
This considers the latest net cash
held by the Group and the expiry
date of existing debt financing,
including a planned business as usual
bank refinancing that took place on
24 September 2021. Furthermore,
consideration is given to the land and
work-in-progress held on the balance
sheet at the 31 July 2021.
Group’s strategy Whether the base forecast is consistent
with the Group’s strategy, both financial
and non-financial.
Principal risks
Whether the principal risks associated with
achieving the Group’s strategy, particularly
those that would have a significant effect
on Bellway’s ability to meet its liabilities
over the period of the viability assessment,
are incorporated.
Bellway p.l.c. Annual Report and Accounts 2021
54
Strategic Report A number of prudent mitigating actions were incorporated
into the plausible but severe downside scenario, including:
• Plots in the land bank only being replaced at the same rate
that they are utilised.
• Construction spend is reduced in line with
housing revenue.
• Dividends were reduced in line with earnings.
None of the mitigating actions included within the scenario
would permanently hamper the long-term growth aspirations
of the Group.
In addition, several further mitigating measures remain
available to management that were not included in the
scenario. These include withholding discretionary land
spend and instead trading out of the existing substantial
land holdings and further reducing construction spend in
recognition of the strong carried forward work-in-progress
position at 31 July 2021.
The output of this review considered the profitability, cash
flows and funding requirements of the Group over the period
to 31 July 2025. The assessment included an assumption
that existing banking facilities remained in place, but, very
cautiously, were not renewed at the end of their term.
In the most severe but plausible scenario, the Group had
significant headroom in both its financial debt covenants
and existing bank facilities and met its liabilities as they fall
due. Based on the results of this review, the directors have
a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the period to 31 July 2025.
Group forecast methodology
The Group’s bottom-up forecasts are updated on at least a
monthly basis by the 22 operating divisions, and are subject
to review by the divisional management team, Regional
Chairmen and Group management.
The forecasts consider the profitability, cash flows, debt
covenants, land bank and other financial and non-financial
metrics over the period. These forecasts also incorporate
appropriate estimates to take into account costs arising
from COVID-19, as the health and safety of colleagues and
site visitors remains a priority. They also include anticipated
costs arising from adopting the Future Homes Standard.
The viability assessment has not been materially affected by
climate change considerations.
The main assumptions used in preparing the forecasts are:
• The number, timing and selling price of legal completions.
• Production volumes and the associated build costs.
• The quantity and timing of land spend.
• Working capital requirements.
• Dividend payments.
• Corporation tax.
Viability assessment
The viability assessment is based on the Group’s current
position and the potential effect of the principal risks facing
the Group, which are summarised on pages 48 to 51. The
principal risk that has been identified as the most severe and
plausible scenario is:
Risk
Relevance to scenarios
External environment:
Including housing demand,
mortgage availability and
government housing policy.
A reduction in private
completions and private ASP
due to a decline in demand.
The most severe but plausible downside scenario is a severe
recession. It includes the following principal assumptions:
• Private completions in H1 FY22 are supported by the strong
forward order book, but still fall to 83% of that achieved
in H1 of FY21. In the 12 months to 31 January 2023, private
completions reduce by around 50% compared to the pre-
COVID-19 ‘lockdown’ peak. This is followed by a gradual
recovery based on the lower base position.
• Private average selling price in H1 FY22 remains in line with
internal forecasts due to the strong order book position. In
the 12 months to 31 January 2023, private average selling
price reduces by 10% compared to the latest achieved
pricing. This is followed by a gradual recovery based on the
lower base position.
• These assumptions reflect the Group’s experience in the
2008/09 global financial crisis.
Bellway p.l.c. Annual Report and Accounts 2021
55
Strategic ReportStrategic Report Corporate Responsibility
A Snapshot
of 2021
1. Hitting carbon reduction targets
Bellway recognises the significant effect carbon emissions
have on the climate and as a responsible organisation
we seek to actively manage this risk on an ongoing basis.
We have achieved our carbon reduction target two years
early, reducing scope 1 and 2 emissions per home sold by
24.0% against a targeted reduction of 10%. This target has
been achieved by accelerating the introduction of REGO
(Renewable Energy Guarantee of Origin) electricity across
the business.
2. £1.95m raised for Cancer Research UK
We are proud that our fundraising and donation total has
reached £1.95 million over the last 5 years. Bellway has
extended its partnership with Cancer Research UK for a
further 2 years and we aim to increase our fundraising and
donation total to £3 million by the end of 2023.
3. Development of the Better with Bellway
sustainability strategy
Building on the positive action already taken across the
business on sustainability, we are developing a new
overarching sustainability strategy which will be launched
in 2022.
All corporate responsibility and sustainability activity will now
be consolidated and conducted under the banner Better
with Bellway. This will improve communication and help
colleagues appreciate how their role at Bellway fits within our
sustainability agenda.
Better with Bellway aims to have a positive impact on
people and the environment through our sustainable and
responsible business practices.
4. Significant progress on waste reduction,
exceeding targets
In 2018, we set a target to reduce waste per completed home
to below 9.3 tonnes by 2021 and we are pleased to report that
we have successfully reduced this to 8.9 tonnes.
This has been achieved predominately through targeted
action on rubble and aggregate waste. Sites are now required
to crush aggregate waste and reuse it as a foundation under
paths and driveways.
5. Roll out of Equality, Diversity and Inclusion Policy
Diversity is valued throughout Bellway, we are committed to
supporting our colleagues from different backgrounds, and
encourage and support employees with different abilities and
experiences as this helps generate new ways of working.
To promote these aims, we launched our new Equality,
Diversity and Inclusion Policy during the year to support our
business leaders and embed best practice into our culture.
Equality, diversity and inclusion e-learning forms part of the
mandatory training for all new employees on commencing
their new role with Bellway.
6. Introduction of our Agile Working Policy
We are committed to modern working practices to enable
employees to maximise their performance and productivity,
whilst maintaining a good work-life balance.
In order to support this, we launched our new Agile Working
Policy during the year to ensure that employees and
managers approach and manage agile working in a safe, fair
and consistent manner.
This new policy will be regularly reviewed to ensure that
working practices are competitive and support both
operational and service delivery.
Bellway p.l.c. Annual Report and Accounts 2021
56
Strategic Report Better with Bellway
Bellway’s commitment to operating in a responsible,
sustainable, and ethical manner is a fundamental part
of our business model and delivers long-term benefits
to our wide range of stakeholders, from customers and
employees through to shareholders, suppliers, and the wider
communities where we build.
We have been taking positive action on sustainability
across the business for many years, publicly reporting our
progress since 2014 through our dedicated Corporate
Responsibility (CR) Reports and expanding this in 2016
through our Economic and Social Impact Reports. We are
proud of our performance to date, but as we continue to
grow, it is important that we set our standards even higher
to meet the challenges of our time and the expectations
of our stakeholders. That is why we are developing a new
overarching sustainability strategy and a series of science-
based targets for carbon reduction. This work, which will
be completed in 2022, will see the profile of sustainability
raised within Bellway to align with the commitment of our
leadership team, and will deliver a more sustainable business
to meet the present and future needs of our customers,
shareholders, and wider stakeholder groups.
We are now operating our CR/sustainability activity under
the banner Better with Bellway which we will use across the
business to consolidate all relevant activities under a single
sub-brand. It will aid the internal and external communication
of our new sustainability strategy when launched in 2022, as
well as helping employees appreciate how their role within
Bellway fits within the sustainability agenda.
Sustainability strategic review
In April 2021, we embarked on a root and branch review
of our CR and sustainability activities. We engaged an
independent specialist consultancy, Simply Sustainable, to
support us with the development of a new sustainability
strategy. Our objective was to create a strategy for our entire
business that would go above and beyond the traditional
ESG/CR topics to align itself seamlessly with our commercial
strategy. The new strategy will address the key sustainability
risks and opportunities unique to Bellway, ensure that we are
aligned to national and international standards, and respond
to the views of our stakeholders. It will also enable us to set
suitably ambitious goals and key performance indicators
(KPIs), set Science Based Targets (SBTs), increase our reporting
transparency, further improve the overall quality of disclosure,
and help build stakeholder trust.
This new strategy marks a significant and exciting milestone
for Bellway. We have committed to doing business in a new
way – a way that puts sustainability firmly at the heart of our
business. While we accept that this may well incur additional
cost, at least in the short-term, this is a price we are willing
and able to bear in exchange for the step-change in strategic
focus and performance that it will deliver.
Building the strategy
As home builders, we know a thing or two about laying
strong foundations and taking a thorough, methodical
approach. The process began with talking to our
stakeholders. We sought views from customers, suppliers,
Government, industry partners and financial shareholders, as
well as capturing insights from a cross section of our internal
stakeholders including members of the Board and our
executive team. The findings from this exercise were central
to understanding the issues that are of highest importance to
our stakeholders.
Working with the Sustainability Leadership Team, we then
conducted a business impact assessment of the risks and
opportunities of each material issue. Evaluating the strategic,
operational, financial, compliance and reputational risks and
opportunities helped to identify areas of moderate, major,
and severe business impact. This risk assessment is a key
contributor to the prioritisation of topics to be addressed by
our sustainability strategy.
Armed with the knowledge of what matters most to
our stakeholders, next we identified and assessed the
potential issues that could affect both our business and our
stakeholders to produce a clear list of priorities and create our
materiality matrix.
Alongside the stakeholder engagement and materiality
assessment, we also undertook comprehensive strategic
analysis to help us fully understand the internal and
external drivers and risks to our business, including political,
economic, social, technological, legal, and environmental
factors. We are now working to understand how we can align
and integrate the relevant Sustainable Development Goals
(‘SDGs’) into our business. In addition, we are conducting
sector benchmarking, identifying key trends in the UK house
building industry and tracking forthcoming policy to help
identify the key areas of focus. We are also reviewing our own
business governance and processes to identify opportunities
for improvement.
Turning strategy into action
When the materiality assessment and strategic analysis are
complete, we will identify and agree the key strategic themes
for the business and the issues which require focus. With
these priority issues clearly defined, the next step will be the
development of our sustainability vision, strategic objectives,
targets, and KPIs. Once established, our sustainability strategy
and accompanying roadmap will outline the short, medium,
and long-term objectives that will enable Bellway to turn our
strategy into action.
Once our strategy and roadmap are in place, we will
then move to integrating the strategy across our business
processes, ensuring that objectives and targets are fully
understood and delivered by all areas of the business. One of
the most important aspects to delivering a successful strategy
is the integration of the vision into our culture, and so we
will ensure that our colleagues are engaged and involved
throughout the process.
This will be the last year that we will report in this format. From
next year, we will be reporting against our new Better with
Bellway framework and in future reports, we will share the key
outputs of the strategic analysis and materiality assessment,
alongside progress on how we are performing against
delivering our new objectives and targets.
Sustainability management
In preparation for the launch of our new strategy, we have
restructured our management of sustainability. A new
Sustainability Leadership Team consisting of the Group
Finance Director, Group General Counsel and Company
Bellway p.l.c. Annual Report and Accounts 2021
57
Strategic ReportStrategic Report Corporate Responsibility continued
A selection of target highlights are listed below:
Environment
• Achieved our carbon reduction target 2 years early,
reducing scope 1 and 2 emissions per home sold by 24.0%
against a targeted reduction of 10%.
• Extended the use of renewable electricity to plots under
construction and show homes, increasing the proportion
of green electricity to 69.2%, helping to reduce our scope 2
emissions.
Construction
• Achieved our construction waste reduction target, reducing
waste to 8.9 tonnes per completed home to (2020 – 11.2
tonnes) against a target of 9.3 tonnes.
• Achieved our 5-star homebuilder status from the HBF for
the fifth consecutive year running, recording the Group’s
best-ever Recommend a Friend score of 93.5% (2020 –
92.0%).
Society and Economy
• Completed the fifth year of our partnership with Cancer
Research UK, increasing our fundraising and donation total
to £1.95 million, just short of our five year target of
£2 million.
• Implemented our first employee engagement survey,
achieving a 72% response rate, well ahead of our
60% target.
For full details of our CR activity visit www.bellwayplc.co.uk/
corporate-responsibility
Secretary and Group Commercial Director will manage
sustainability at a strategic level, overseeing the development
of the strategy, objectives, and targets, and engaging with
the Board and key external stakeholders. The Sustainability
Leadership Team also sit on the broader ‘steering group’ who
will meet on a regular basis to set and manage corporate
objectives designed to deliver the sustainability strategy as
well as reviewing progress to-date. The ‘steering group’ is
also responsible for co-opting ‘business sponsors’ from across
the functions within Bellway. These ‘business sponsors’ form
the third tier of our sustainability management and will be
responsible for implementing projects at a functional and
departmental level to deliver on the agreed sustainability
objectives and targets as well as embedding sustainability
into business-as-usual activities.
More will follow next year following the strategy’s launch,
including the outputs from a project with The Carbon Trust
to develop ‘SBTs’ for scope 1 and 2, and scope 3 emissions, a
new internal project focused on delivering the 75% reduction
in emissions specified by the Future Homes Taskforce and the
long-term programme of embedding sustainability into the
fabric of our business.
Our key achievements in 2020/21
While development work has begun on our new
sustainability framework and strategy, we have continued
work towards our overall CR agenda and specifically against
the 15 public targets that were set for the 2020/21 year.
Some key achievements are highlighted below, and full
details of our performance can be found on our CR website
(www.bellway.co.uk/corporate-responsibility), along with our
initial objectives for the coming 2021/22 year, some of which
are referenced later in this report.
Of our fifteen public targets, four are multi-year targets that
still have at least 12 months to run. Of the eleven targets
completed this year, nine have been achieved with only our
CRUK and RIDDOR targets narrowly missed. We fell short of
our £2 million CRUK fundraising target by only £45K despite
losing over 16 months of fundraising activity due to the
COVID-19 lockdown and social distancing regulations. We
recorded a RIDDOR incident rate of 336.49 against a target
of 324.87, equating to just two additional accidents across the
year.
9
targets
achieved
4
targets are multi-year
and progress will continue
into 2021/22
2
targets
missed
Bellway p.l.c. Annual Report and Accounts 2021
58
Strategic Report Environment
Climate change, waste and protection of the
environment are important focus areas for
housebuilders and society as a whole. During
the year we have continued work to minimise
our impacts in these areas and our new
sustainability strategy will maintain our focus
on these key themes.
3
3
targets achieved
targets are multi-year
Waste
We will assess the use of single-use plastic in our
offices, construction processes and supply chain
to understand where we can reduce or eliminate
usage by 2021. The next steps are to implement
plans to reduce usage in future years.
Water
We will seek to reduce water consumption
across all households to 115 litres per person per
day by 2022.
Carbon
We will aim to reduce our direct carbon emission
intensity (scope 1 and 2) from our construction
operations, offices and business mileage by 10%
by 2022/23 (measured by CO2e per home sold;
2017/18 as a base year). To date we have achieved
a 24.0% reduction as we have accelerated the
introduction of REGO electric into the business.
Carbon
We will fit electric vehicle charging points as
standard in 50% of new homes per year we build
by 2025.
Carbon
We will aim to reduce employee business car
mileage by 10% through the use of remote meeting
technology and the introduction of our new agile
working policy. We achieved a 26.3% reduction
due to COVID-19 social distancing restrictions
accelerating the adoption of remote meeting
technology, thereby aiding the reduction.
Renewables
We will fit a range of renewable energy technology
to 40% of new homes built per year by 2023.
Biodiversity and ecology
Bellway’s business strategy is to create long-term sustainable
communities where customers want to live and which
are constructed with due regard to the local environment.
The availability of suitable brownfield development sites
has reduced in recent years, but we still build a significant
proportion of our homes on this type of land - 36.8% in the
past year (2020 - 36.0%) – which brings varied environmental,
community and economic benefits to the local area. For all
developments, and specifically where we develop greenfield
sites, we aim to mitigate our impact through a range of
actions, including flood impact assessments, risk assessments,
ecology surveys, environmental impact assessments, and
in agreement with local planning authorities, biodiversity
mitigation, enhancement and offsetting.
In the past year, Sustainable Drainage Systems (‘SuDS’) were
implemented into 255 of our developments (2020 – 224).
SuDS are more environmentally friendly drainage systems
that mimic natural drainage processes to reduce water runoff
flooding and pollution, storing water in natural contours of
the land and providing an additional habitat for wildlife on
developments. In addition, 147 developments included a
biodiversity plan (2020 – 186) and we planted over 17,200 trees
(2020 – 12,700).
As we implement and embed our new strategy, further
biodiversity initiatives and KPIs will be introduced across
the business.
Energy and carbon
For the first time, we are reporting against how we are
meeting the TCFD recommendations. This disclosure can
be found on pages 67 to 69.
One of the key issues for all housebuilders in the UK is carbon
emissions (from both operations and homes built). At Bellway
we recognise that climate change is a growing and significant
issue, and as a responsible housebuilder we are committed
to contributing to the UK’s target of net zero by 2050.
The Future Homes Standard is part of the Government’s
plan to reach net zero by reducing carbon emissions from
the running of new homes. We have already undertaken
extensive work to understand how we can redesign our
homes to meet the new energy efficiency standards which
will come into effect for all new homes built from 2023.
We are progressing plans to build several trial homes
across our developments, allowing us to test upgraded
building fabric standards and new technologies designed
to deliver the lower ‘in-use’ energy and carbon emissions
required by the new 2023 and 2025 standards. Bellway is
also using this timeline as a roadmap for our own carbon
reduction programme.
Existing home specifications prioritise energy efficiency, with
double glazing, energy efficient lighting and the latest boiler
technology, delivering reduced running costs and lower
carbon footprints for customers. We also included renewable
energy technology to 27.0% of our new homes (2020 –
28.4%), further reducing customers’ energy consumption
and bills, and on average, the Dwelling Emission Rate (DER)
of our new homes this year was 3.9% better than required
by the relevant building regulations (2020 – 4.7%) (DER is a
measure of carbon emissions, based on SAP calculations,
from the normal running of a home, with lower emissions
Bellway p.l.c. Annual Report and Accounts 2021
59
Strategic ReportStrategic Report Corporate Responsibility continued
equating to reduced energy consumption and so lower bills
for customers).
This work sits alongside our ongoing activity which focuses
on the energy efficiency of our site compounds, telehandler
fleet and show homes. We are also undertaking trials of a
green diesel, made from hydrotreated vegetable oils, as a
replacement for the red diesel used in our site generators and
telehandlers. If successful and rolled out across the business,
the new fuel has the potential to significantly reduce our site
diesel carbon emissions.
We are pleased to report that we have achieved our carbon
reduction target two years early. In 2021 we extended our
use of REGO (Renewable Energy Guarantee of Origin)
electricity supplies to include plots under construction, show
homes and sales offices, and we now have over 69.2% of
our electricity supplied from renewable sources, with an
additional 6.4% from carbon free sources. This has saved
5,953 tonnes of carbon from entering the atmosphere and
reduced our carbon per home sold to 1.9 tonnes, a 24.0%
reduction against a target of 10% (2018 – 2.5 tonnes).
We continue to contribute to the Carbon Disclosure Project’s
(‘CDP’) ‘Climate Change’ and ‘Forests’ programmes and our
latest scores for both were ‘Awareness – C’, in line with the
CDP programme global average. We aim to improve our
scores going forward as we deliver on our existing carbon
target and introduce further carbon saving initiatives. As part
of our sustainability strategy review, we have begun work
with The Carbon Trust to develop a series of science-based
targets to drive long-term carbon reductions within the
business and align our carbon reduction aspirations with
the UK carbon net zero target of 2050. We expect targets to
address scope 1 and 2, and separately scope 3, emissions to
be finalised and approved towards the end of 2021 calendar
year. As we implement and embed our new strategy, further
energy and carbon initiatives will be introduced across the
business, including the adoption of science based targets,
investigations into switching to bio-diesel fuels on sites
and increasing the proportion of electricity sourced from
REGO supplies.
Streamlined Energy and Carbon Reporting
(SECR) Disclosure
In accordance with the Companies Act 2006 (Strategic Report
and Directors’ Reports) Regulations 2013 and the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018 (SECR), we report on
our greenhouse gas (‘GHG’) emissions as part of the annual
Strategic Report. Our GHG reporting year is the same as our
financial year and the previous year’s figures have been
provided as comparators.
Scope 1 covers emissions from the combustion of fuel and
operation of facilities owned/operated by the company (for
example diesel in site generators and telehandlers; fuel in
company cars used on company business; gas for heating
in offices, show homes and constructions compounds) while
scope 2 covers emissions from purchased electricity.
The methodology used to calculate our emissions is based
on the UK Government’s Environmental Reporting Guidelines
(2013) and emission factors from the 2020 government
GHG Conversion Factors for Company Reporting. For
scope 2 emissions we have reported using both the
location-based method of calculation and, to account for
our use of renewable electricity, the market-based method
of calculation.
The reported emission sources include all those which we
are responsible for, except for the following which were
excluded from this report:
• Gas and electricity from part-exchange properties due
to immateriality and difficulty in accurately reporting and
recording this data.
• Emissions from air conditioning units in office buildings due
to immateriality and difficulty in data collection.
• Emissions from site-based combined heat and power units
for which we do not have operational control.
An element of carbon estimation is undertaken in the
following areas:
• Diesel fuel usage on a small number of sites where fuel is
provided by our groundworks contractors. Bellway’s share
of the usage is estimated based on forklift usage.
• Divisional offices where gas and electricity usage are
included within landlord charges. Bellway’s usage is
estimated using a kWh per square metre of occupied floor
space figure derived from other divisional offices with utility
billing in place.
The COVID-19 shutdown in March-May 2020 and then
continuing social distancing restrictions, make a comparison
between 2021 and 2020 difficult. However, with the
resumption of construction activity at a site level (initially at a
reduced level) we have seen scope 1 emissions rise by 4.8%.
Scope 2 emissions (market-based) have fallen significantly by
56.6%, due to our increased use of REGO (Renewable Energy
Guarantee of Origin) electricity supplies and the ongoing
decarbonisation of the UK electricity mix. 75.6% of our
electricity is now from renewable sources which has saved
5,953 tonnes of carbon from entering the atmosphere in
the past year. Discounting the benefit of our REGO supplies,
location-based scope 2 emissions rose by 8.3%.
Overall, total scope 1 and 2 emissions (market-based) fell by
7.2% and with 10,138 new homes completed for the year, our
carbon per home sold metric fell by 32.1% to 1.9 tonnes (2020
– 2.8). This has seen us meet our carbon reduction target of a
10% fall in carbon per completed home two years early. With
employee numbers largely static, our scope 1 and 2 market-
based emissions per employee have also remained static.
This is the second year we have reported under SECR
with the inclusion of certain scope 3 emissions (waste and
business mileage) as well as total underlying energy use.
Waste emissions rose by 8.4% due the comparison with
2020, which saw the temporary shutdown of sites due to
the COVID-19 pandemic. Business mileage emissions have
continued to fall (by 0.9%) as the business has embraced
remote meeting technology and introduced an Agile
Working Policy. Underlying energy use (market-based) fell
by 3.5% while using the location-based method to remove
the impact of our ‘green electricity’, the energy use rose by
10.2%. Both the 2019/20 and 2020/21 emissions have been
externally verified by Zeco Energy to a ‘reasonable assurance
level’ using the ISO-14064-3 verification standard.
Bellway p.l.c. Annual Report and Accounts 2021
60
Strategic Report Greenhouse Gas Emissions (GHG) (tonnes of CO2e)(a)
Scope 1 – Combustion of fuel and operation of facilities (including diesel and petrol used on-site
and in company cars on Group business)
Scope 2 – Electricity purchased for our own use (market-method)(b)
Total market-method scope 1 and 2 GHG emissions
2021
17,704
1,780
19,484
2020
16,892
4,097
20,989
Energy consumption used to calculate above emissions (kWh)
84,971,433
88,061,917
GHG intensity (market-method) per Bellway home sold
GHG intensity (market-method) per Bellway employee(c)
Scope 1 – Combustion of fuel and operation of facilities (including diesel and petrol used
on-site and in company cars on Group business)
Scope 2 – Electricity purchased for our own use (location-method)(d)
Total location-method scope 1 and 2 GHG emissions(d)
Energy consumption used to calculate above emissions (kWh)
GHG intensity (location-method) per Bellway home sold
GHG intensity (location-method) per Bellway employee(c)
Scope 3 – Disposal of waste
Scope 3 – Emissions from employee business travel in non-company vehicles
Notes:
a. Carbon dioxide equivalent as per the meaning given in section 93(2) of the Climate Change Act 2008.
b. Scope 2 emissions reported using the market-based method to account for electricity supplies purchased under REGO contracts.
c. Based on the average number of employees during the year.
1.9
6.6
17,704
5,282
22,986
2.8
6.7
16,892
4,877
21,769
102,076,721
92,663,081
2.3
7.8
2,095
1,784
2.9
7.0
1,932
1,799
d.
Scope 2 emissions reported using the location-based method for total electricity used which does not account for the zero-carbon nature of electricity supplies purchased under
REGO contracts.
Water
As the effects of climate change are felt across the UK and
wider world, we expect that water stress may become more
prevalent in some parts of the country. As part of our current
water management plan, this year we undertook a project
to better understand construction site water usage. This has
helped to identify where significant consumption occurs
and where potential savings may be made. We are already
addressing water usage in our sold homes, with a target to
reduce water consumption across all households to 115 litres
per person per day by 2022, against a building regulation
requirement of 125 litres per person per day. For the coming
years we have set a target to reduce construction site water
usage against a FY21 baseline.
Bellway p.l.c. Annual Report and Accounts 2021
61
Strategic ReportStrategic Report Corporate Responsibility continued
Construction
As the UK continues to experience a
housing shortage, Bellway’s role as the
UK’s fourth largest national housebuilder
is key to delivering the country’s housing
needs now and into the future. We aim to
work in partnership with our wide range
of stakeholders, including subcontractors,
suppliers, and local authorities to deliver
desirable and sustainable developments for
communities to enjoy.
3
1
targets achieved
targets are multi-year
Waste
We will aim to reduce the quantity of waste we
generate (excluding ground works waste) per
home under construction by 2021 (against FY18
target baseline of 9.3 tonnes). We have successfully
reduced waste per home to 8.9 tonnes.
Sustainable construction
We will complete research into six sustainable
construction methods and products, undertake
trials at a division level and implement successful
outcomes across the Group by 2021. Initiatives
researched include: modern methods of
construction; ThermaQ heating controls for homes;
structural insulating panels; offsite modular builds;
less carbon intensive concrete bricks; showersave
heat recovery; air source heat pumps; ground
source heat pumps; electric boiler solutions; smart
home technology.
Customer and quality
We will aim to retain our 5-star homebuilder3 status
by achieving a Recommend a Friend score of at
least 90% in the HBF new home buyers survey. For
the latest completed survey year we scored 93.5%.
Smart homes
We will develop a smart-home technology
package for new homes with a view to trialling on
five developments by 2022.
Communities
Creating sustainable communities means more than simply
building houses. Developments need to provide an attractive
and desirable location to new residents while at the same
time integrating into the existing neighbouring communities
and improving the overall health, wellbeing, and prosperity of
the local area. Consultation is key to delivering these aims in
the right balance and we engage in a range of consultation
exercises at the planning stage and before work commences
to ensure all relevant voices are heard and, where
practicable, recommendations adopted into the final plans.
As part of our plan to improve the urban design of our
developments, we continue to expand the number of
sites using our standard Artisan house type. We also invest
in the local community over and above the provision of
much needed new homes. Through section 106 (England
and Wales) and section 75 (Scotland) agreements, as
well as community infrastructure levy and affordable
housing contributions, we invest significant funds into local
communities providing investment for education, healthcare
facilities, sports facilities, transport infrastructure improvements
and the creation of recreational space. In 2021 we contributed
£71.3 million (2020 – £60.5 million). Our construction activities
also deliver employment opportunities across the country,
and we estimate that between 26,600 and 31,500 direct,
indirect and induced jobs were supported by Bellway in the
past year.
Waste
While the production of waste is an inevitable by-product of
any construction process, Bellway has an environmental and
financial responsibility to manage our resources effectively
and efficiently. Our aim is to minimise wastage wherever
possible, and where waste is unavoidable, to ensure that
we reuse and recycle as much as we can, reducing the
environmental damage caused by landfill and the higher
waste disposal costs that come with landfill.
We have improved our diversion of waste from landfill for
the seventh year, achieving 99.4% diversion (2020 – 99.1%).
With over 99% of waste now diverted, our focus during the
past few years has extended to work on reducing waste
tonnages. In 2018, we set a target to reduce waste tonnes
per completed home to below 9.3 tonnes by 2021 and we
are pleased to report that we have successfully reduced
this to 8.9 tonnes (2020 – 11.2 tonnes). This reduction has
predominately been through targeted action on rubble/
aggregate, requiring sites to crush aggregate waste and reuse
as a foundation under paths and driveways.
In 2021 we worked with the Supply Chain Sustainability
School (‘SCSS’) to understand the level of packaging waste
we generate in the business and what proportion of that is
single-use plastic. We estimate that packaging waste is low
at around 250kg per plot, of which around 75kg is plastics.
When put in terms of our 8.9 tonnes of overall waste per plot,
packaging is only around 3% of total waste, with plastics less
than 1%. However, we are undertaking work with our supply
chain partners to reduce packaging and have asked them
to investigate reusable alternatives to single use packaging.
We have also asked suppliers to ensure that there is at least
a 30% recycled content in their plastic packaging before the
plastic tax is introduced in April 2022.
Bellway p.l.c. Annual Report and Accounts 2021
62
Strategic Report Our whistleblowing procedure enables concerns of any
wrongdoing to be reported in confidence. There were a
small number of reports made during the year where sadly
the behaviour of a few employees fell short of the expected
standards, appropriate investigations were conducted and
disciplinary action was taken where necessary.
As part of our new sustainability strategy, we have a range
of initiatives in the coming years to address some key
supply chain issues, including modern slavery audits and
partnerships with suppliers to improve efficiency, and share
learning across our mutual businesses.
Quality
This year Bellway has continued to provide customers
with homes built to a high standard in desirable locations.
Our commitment to quality is recognised year-on-year in
the NHBC Pride in the Job awards and in 2021 a total of
39 Bellway and Ashberry site managers collected awards
(2020 – 44). These awards acknowledge site managers who
have achieved the highest standards in housebuilding,
recognising their technical knowledge, leadership qualities
and organisational skills. We also benchmark the quality of
our homes through a range of ‘construction quality control’
(‘CQR’) indicators, including the NHBC ‘reportable items per
inspection’ measure and ‘construction quality reviews’. In
the past year reportable items per home were at 0.21 (2020
– 0.24), below our internal target of 0.3, while the CQR score
was 83.8% (2020 – 80.2%), well above our target of 74%.
As part of the new Better with Bellway strategy, work is
planned for the coming years to further reduce waste
(measured in tonnes per home built).
Supply chain
We are a member of the SCSS and sit on several working
groups (include waste and climate change). With the
long-term partnerships we have developed with our
subcontractors and suppliers, an integral part of what makes
Bellway a success, we have encouraged them to sign-up to
the SCSS and become ‘bronze’ members, providing access
to a range of training and resources to help their business
become more sustainable.
Housebuilding is a local activity and while we have a
central procurement function which manages ‘group deals’,
individual divisional procurement teams undertake most of
our spend. In 2021 our supply chain spend was £1.8 billion
(2020 – £1.4 billion), resulting in a £1.6 billion investment in
the UK economy (based on the HBF estimating that 90% of
housebuilders’ supply chain spend remains in the UKa). With
over 90% of this UK spend by our local divisions, we estimate
that £1.4 billion of this investment has delivered a significant
boost to the local economies where we develop. With the
spend focused on many smaller businesses and companies
local to development sites, we are committed to paying our
suppliers and subcontractors within agreed terms and remain
a signatory to the Prompt Payment Code.
We do not tolerate any form of slavery, servitude and forced
compulsory labour or human trafficking in our supply chain
or in any part of our business. Our Anti-Slavery Policy reflects
this commitment and is available to view on our website,
along with our latest Slavery and Human Trafficking Statement
which sets out the actions we have taken. We require all
applicable suppliers and subcontractors to confirm that they
either have their own modern slavery policies in place or that
they adopt Bellway’s policy. Relevant staff receive training to
help them identify signs of slavery and compliance activity is
monitored throughout the year.
Bellway’s zero tolerance approach to bribery and corruption
has been adopted by the Board. It extends to all the
Group’s business dealings and transactions and our policy
and procedures set out the standards expected of all
of our employees. Those who work for and with Group
management are responsible for enforcing compliance and
carrying out additional checks when required.
a
The Economic Footprint of House Building in England and Wales (July 2018), prepared
for the HBF by Lichfield’s.
Bellway p.l.c. Annual Report and Accounts 2021
63
Strategic ReportStrategic Report Corporate Responsibility continued
Society and Economy
A healthy housebuilding sector is a key
driver for national economic prosperity and
the industry is being called on by the UK
Government to deliver 300,000 new homes
per year to meet the UK’s ongoing housing
shortage. Bellway’s new homes contribution
to this target is delivering a range of social
and economic benefits, both locally where we
develop, and nationally.
3
targets
achieved
2
targets
missed
Health and safety
We will maintain our site based RIDDOR incident
rate at 2019 levels or below. We narrowly missed
this target, achieving a RIDDOR rate of 336.49
against a target of 324.87.
Diversity
We will set up diversity and inclusion focus groups
to gain a greater understanding of the issues and
challenges facing under-represented groups of
employees, informing priorities moving forwards.
The ‘Balance’ group is currently running projects
addressing female PPE, family friendly policies and
the promotion of flexible working policies.
Employee engagement
We will implement an employee engagement
survey this year and aim to achieve at least a 60%
response rate. We are pleased to report that we
achieved a 72% response rate.
Community engagement
We will develop a schools engagement pack for
primary and secondary schools for use by divisions
by July 2021. The work has been completed and
Bellway divisions have been tasked with delivering
engagement sessions at schools in FY22.
Charitable giving
We will extend our partnership with Cancer
Research UK for a further 2 years and aim to
increase our fundraising and donation total across
the combined 5-year period to at least £2 million
by July 2021. We narrowly missed our target,
increasing our fundraising and donation total to
£1.95 million.
Safety
The safety, health, and wellbeing of everyone who works
for Bellway remains our number one priority, be they office
or site-based staff, directly employed or subcontractors.
Our in-house health and safety team works across our
divisions, ensuring that safe working practices are promoted
and embedded at all offices and sites, utilising training and
toolbox talks as well as informal and formal site inspections.
Unfortunately we narrowly missed our target to keep the
RIDDOR seven-day reportable incident rate to below 2019’s
level, recording a rate of 336.49 incidents per 100,000 site
operatives for FY21 (2019 – 324.87), recording only one more
accident this year compared to FY19. FY21 is also above last
year’s rate of 203.12, but it must be noted that 2020 was an
abnormal year for safety metrics due to the site shutdowns
and reduced on-site staff to meet social distancing guidelines
because of COVID-19. As in previous years, we will continue
to focus on accident prevention and safety education.
Economy
With housebuilding often viewed as a ‘barometer’ for the
UK economy, its role in directly stimulating growth and
supporting employment should not be underestimated. In a
report published by the House Builders Federation (HBF)a in
2018, housebuilding was estimated to contribute £38 billion in
economic output, support almost 700,000 direct and indirect
jobs and contribute £2.7 billion in tax revenues to central and
local government.
We continue to use the HBF’s, Lichfield’s and other publicly
available metrics to estimate Bellway’s own beneficial
impact to the UK economyb . Our contribution in 2021 was
significantly higher compared to 2020 which was adversely
affected by various national and regional ‘lockdowns’ due to
the COVID-19 pandemic.
• £1.05 billion in estimated gross value added generated by
our construction activities (2020 – £782.5 million).
• 26,600 – 31,500 direct, indirect and induced jobs supported
(2020 – 19,700 to 23,400).
• £176.5 million contribution to public finances
(2020 - £135.4 million).
• £72.6 million in New Homes Bonus and council tax
payments to local authorities (2020 – £69.2 million).
Customers
Each year thousands of customers rely on Bellway to build
them the home of their dreams. This is a responsibility we
take very seriously and this year we launched the largest
internal transformational programme in Bellway’s 75-year
history. Called Customer First, it aims to ‘build homes to be
proud of with customers at the heart of everything we do’.
The new initiative will also help to improve the building
sector’s reputation and position Bellway ahead of our
competitors by building consistently high quality homes.
a
b
The Economic Footprint of House Building in England and Wales (July 2018), prepared
for the HBF by Lichfield’s.
Full details can be found in ‘Our Economic and Social Impact 2020-21’ summary which
is available on our website.
Bellway p.l.c. Annual Report and Accounts 2021
64
Strategic Report Bellway is already recognised as a quality housebuilder,
and we are proud to have retained our 5-star homebuilder3
status from the HBF for the fifth consecutive year running
(2020 – 5 star) with our best ever score of 93.5% (2020 –
92.0%), meaning that at least 9 out of 10 of our customers
would recommend Bellway to a friend. We are aware that
our ‘Recommend a Friend’ score drops at our 9-month
satisfaction survey. As a result, we have launched our
Customer First programme to put customer satisfaction at the
heart of everything we do and in the coming years we will
focus on this longer-term customer satisfaction, utilising both
the Customer First initiative and targeting improvements in
the 9-month ‘Recommend a Friend’ survey.
Affordability
Affordability is often cited as a potential reason for the falling
home ownership levels amongst the younger generation.
Bellway builds a range of new homes to meet the varying
budgets and needs of customers, whether they are first-
time buyers, looking for a larger family home or downsizing.
We continue to create balanced communities, with 22.1%
(2020 – 22.2%) of new homes sold to affordable housing
providers this year.
In 2021 we sold 6.5% (2020 – 6.4%) of our new homes to
unassisted first-time buyers while 39.1% (2020 – 34.5%) were
purchased by customers using one of the various Help-to-
Buy schemes. Overall, 27.8% (2020 – 27.1%) of our homes
were sold to first-time buyers. The average selling price for
a Bellway home was £306,479 (2020 – £293,054).
Employees
Our employees and subcontractors are key to the success
of our business and during the year we directly employed
an average of 2,934 people (2020 – 3,119). When we factor
in indirect and indirectly employed people across our
subcontractors and supply chain, between 26,600 and 31,500
jobs are supported by our operations.
As an industry, housebuilding continues to see skills
shortages in some key areas. Bellway is actively addressing
this issue through investment in training our future workforce
as well as continuing to be an active member of ‘The 5%
Club’ (maintaining over 5% of our workforce employed
in developmental roles). In the past year we had 246
apprentices, graduates and trainees working within Bellway
to (2020 – 258), representing 8.3% of the workforce. We also
ran our second Apprenticeship of the Year Awards with
the winner, Matthew Allwood (apprentice joiner in our East
Midlands division), announced in February.
Our new graduate programme began last year, and we are
pleased to see the first cohort of 38 individuals nearing the
end of their training. As well as their job-specific training, they
have undertaken several group-wide projects including one
on resource efficiency in the business and another looking to
footprint the embodied carbon in a Bellway home which will
help shape our impending scope 3 science-based targets.
We undertook our first business-wide employee engagement
survey this year and were pleased with the response rate of
72%, above our target of 60%. Some key changes have been
implemented as a result including the introduction of ‘core
hours’ for office-based employees (allowing for flexible start
and finish times to accommodate personal circumstances),
an Agile Working Policy (facilitating some home working
where roles allow) and a Flexible Working Policy. In addition,
we will set up ‘Balance’, our first diversity and inclusion focus
group which will concentrate on gender diversity.
As a responsible employer we are committed to ensuring
that all our people are treated with fairness, consideration,
and respect, and we operate a range of policies and provide
training to ensure equal opportunities are provided to all
existing and prospective employees, including modern
slavery and diversity and inclusion training. These policies
are listed on our website, and staff may report any concerns
to our HR department or through our SpeakUp procedure
which is managed by an independent provider.
As part of our Better with Bellway strategy, in the coming
years we will target an increase in training posts across
Bellway, improve the gender and ethnic diversity of our
workforce and increase the provision of mental health
training and support for staff.
Charitable giving
The impact of the COVID-19 pandemic has been felt across
all sectors, and none more so than the charity sector where
fundraising revenues have fallen significantly as corporate
partners and supporters have been unable to take part in
fundraising activities. Therefore, it has been more important
than ever for Bellway to continue our support for not only
our national charity partner, Cancer Research UK (‘CRUK’),
but also the range of smaller local charities and community
groups that we support across the country. This support
for those sections of society less fortunate than ourselves
remains a key aspect of our approach to CR.
CRUK was initially selected as our partner back in 2016 as
most of the independent fundraising by employees was in
support of cancer charities. From the start of the partnership,
employee engagement with the charity has been strong,
and this has continued during the challenging COVID-19
pandemic, although fundraising opportunities have been
significantly limited. In 2021, £93,703 was raised by employees,
subcontractors, and suppliers (2020 – £140,134) and when
combined with Bellway’s ‘double matching’ of employee
fundraising, the total raised was £351,157 (2020 – £328,493).
This brings our 5-year total to £1,954,829, just £45K short of
our £2 million target which is a fantastic achievement given
we were unable to carry out normal fundraising activity for
the last 16 months due to the COVID-19 pandemic lockdowns
and social distancing. We are pleased to report that we
have extended the CRUK partnership for a further two years,
with a new target of reaching £3 million in fundraising and
donations by the end of 2023.
Bellway p.l.c. Annual Report and Accounts 2021
65
Strategic ReportStrategic Report Corporate Responsibility continued
As well as our national partnership, we continue to
support local charities, causes and community groups in
our development areas. We support our employees with
‘matching’ when they undertake their own local fundraising
and in 2021 this activity, although significantly restricted by
the COVID-19 pandemic, raised £34,710, (2020 – £110,551). In
addition, our divisional offices have maintained their support
for good causes in their operating areas. In total, across all our
charitable activities, Bellway, our employees, subcontractors,
and suppliers have raised and donated £520,413 to good
causes this year (2020 – £537,338), of which £128,413 was
raised by our employees, subcontractors, and suppliers, (2020
– £237,338).
Looking forward
2021 has been another successful year in terms of CR
performance. Our work to date has built a strong foundation
on which to build our new sustainability strategy and, with the
full support of our leadership team, we are now ready to take
our commitment, and our performance, to new heights.
More details of our 2021 performance can be found on our
website: www.bellwayplc.co.uk/corporate-responsibility.
Some of our key objectives for the coming year are
outlined below:
• Aim to improve the customer’s post completion experience
demonstrated by improving the ‘Recommend a Friend’
score in the 9-month survey to 90% by FY26 (scores will
relate to the 2023-24 financial year).
• Extend our partnership with Cancer Research UK for a
further 2 years and aim to increase our fundraising and
donation total to £3 million by the end of 2023.
• Audit a sample of our larger supply chain partners by 2023
to ensure they are fully compliant with relevant legislation
and Bellway policies.
Non-financial information statement
The table below identifies the pages of this Annual Report
where we discuss the information required to comply with
the Non-Financial Reporting Regulations set out in sections
414CA and 414CB of the Companies Act 2006. Relevant
policies are available on our website, together with our
Economic and Social Impact Report.
Non-financial
Information
Environmental
matters
Pages
Related policies available
on our website
59 to 61
• Climate change Policy
• Environment Policy
• Wood procurement Policy
• Develop a new comprehensive sustainability strategy
Employees
22
• Health and Safety Policy
that will form a key part of the company-wide Better with
Bellway culture change project aimed at embedding
sustainability as ‘business as usual’ across the Group. This
will include: the setting of science-based carbon reduction
targets; new KPIs and targets centred around key business
objectives; creating a working group to deliver the future
homes standard; new reporting and management
frameworks.
• Develop science-based carbon reduction targets by
December 2021 to tackle both scope 1 and 2 emissions and
scope 3 emissions.
• Aim to have 100% of our electricity supplies covered by
REGO renewable tariffs (or carbon free tariffs) by 2023.
• Reduce construction site water usage (measured in m3 of
water per 1000 m2 of completed homes) against a base
year of FY21 by FY25.
• Aim to retain our 5-star homebuilder3 status in the HBF new
home buyers survey in FY22 (2020-21 survey year) and
FY23 (2021-22 survey year), improving our score to 95% by
FY23 (the 2021-22 survey year).
• Research the carbon benefits of concrete bricks and by
2023 assess the feasibility of moving the construction of a
proportion of our new homes to this material.
• Diversity, Equality and
Inclusion Policy
Social matters
64 to 65 • Charity Policy
Human rights
22,
63,65
• Anti-Slavery Policy
• Whistleblowing procedure
Anti-bribery and
corruption
88 to 89 • Anti-bribery and
Corruption Policy
• Whistleblowing procedure
Non-financial KPIs
14 to 18
• Environment Policy
• Health and Safety Policy
Business Model
12 to 18
• All of the above
Approval of the Strategic Report
The Strategic Report was approved by the Board and signed
on its behalf by:
Jason Honeyman
Group Chief Executive
18 October 2021
Bellway p.l.c. Annual Report and Accounts 2021
66
Strategic Report Task Force on Climate Related Financial Disclosures (TCFD)
In 2017, the Financial Stability Board released its report on the recommendations of the Task Force on Climate-related Financial
Disclosures. We recognise the importance of these disclosures and are committed to implementing the recommendations
in full. This disclosure against TCFD is ahead of the forthcoming UK mandatory requirement for companies to report, which
Bellway will comply with in our FY22 annual report. As this is our first time reporting against the recommendations we are
continuing to develop and refine our approach ahead of the mandatory requirement, and therefore this disclosure does not
meet the recommendations in full.
Utilising specialist organisations (The Carbon Trust and Simply Sustainable) to support us and provide expertise, we have
developed a programme to ensure that we meet the TCFD recommendations in full and progress our understanding of the
financial risks and opportunities of climate change to our business. In the next year we will undertake climate scenario planning
to fully understand the physical and transition climate risks to our business in the short, medium and long-term. We are also in
the process of setting ambitious science-based climate reduction targets which go beyond regulatory requirements, measuring
and benchmarking our performance against our competitors, designing our new homes to meet the Future Homes Standard,
and embedding climate change literacy and understanding of risk into our normal business practices.
We have included information in various parts of this report explaining how we are focused on developing a new sustainability
strategy, developing science-based targets and how our business is preparing to address the risks and opportunities arising
from climate change. The table below shows a summary of our progress against the TCFD recommendations, and where
further relevant information can be found in this report.
Disclosure
recommendation
Governance
Describe the Board’s
oversight of climate-
related risks and
opportunities.
Describe management’s
role in assessing and
managing climate-related
risks and opportunities.
Summary of our progress to date
Section reference
The impact of climate change on the business, as well as our impact on the
environment, are issues that are being consolidated into our governance
approach as we seek to align our practices to the TCFD recommendations.
Bellway p.l.c. Annual
Report and Accounts
2021 (page 34)
Material climate change related risk is discussed at Board level. Our Group
Finance Director holds governance accountability for ESG risks, including
climate change, and sits on the Executive Team and the Board.
We are in the process of developing our two-tiered approach to the
oversight and management of our ESG risks, including climate change:
1)
Sustainability Leadership Team comprising of our Group Finance
Director, Group General Counsel and Company Secretary and Group
Commercial Director whose purpose is to raise the profile of ESG risks
within Bellway and lead the development of an integrated carbon
reduction strategy.
2) Better with Bellway Committee led by our Group Finance Director,
Group General Counsel and Company Secretary, risk owners and
sustainability specialists from around the business whose purpose is to
develop a tactical approach to ESG risks, including carbon reduction,
and engage with our network of business sponsors to develop specific
and meaningful operational objectives.
Our network of business sponsors will steer the internal governance of
our sustainability progress. Containing risk owners and department heads,
this group is responsible for developing and embedding our emerging
new sustainability strategy into the business both at a divisional and
departmental level.
Accountability for the management of climate change risks sits with
our Group Finance Director. Our Head of Sustainability coordinates the
management of climate-related risks across the business, reporting into the
Group Commercial Director, and in turn the Group Finance Director.
Bellway p.l.c. Annual Report and Accounts 2021
67
Strategic ReportStrategic Report Task Force on Climate Related Financial Disclosures (TCFD)
continued
Disclosure
recommendation
Strategy
Describe the climate-
related risks and
opportunities the
organisation has
identified over the short,
medium and long-term.
Describe the impact
of climate-related risks
and opportunities
on the organisation’s
businesses, strategy and
financial planning.
Describe the resilience
of the organisation’s
strategy, taking into
consideration different
future climate scenarios,
including a 2°C or
lower scenario.
Summary of our progress to date
Section reference
We recognise climate change as a principal risk to our business. As reported
in our principal risks on page 34 we define the risk of climate change to our
business as ‘Failure to evolve business practices and operations in response
to climate change, including physical impacts, reporting requirements and
social/market expectations’.
Bellway p.l.c.
Annual Report and
Accounts 2021 –
(page 48)
The identification of new and emerging climate-related risks, assessment
and prioritisation of those risks, and our risk management approach will
be key to integrate climate change mitigation into our overall approach to
sustainability. Over the next year, Bellway will undertake scenario planning
to identify the risks related to the increasing frequency and severity of
acute weather events or increasing water scarcity that could impact our
operating environment. Once identified, we will work towards obtaining a
better understanding of the potential financial impacts using our established
scoring criteria, and our resilience with regards to different scenarios.
Alongside physical risks, the UKs transition to a low carbon economy
highlights a transition risk for Bellway as changes to policy cause the home
standards and building regulations to evolve.
We recognise that we have more to do to meet the recommendations in
full. We are currently developing a new sustainability strategy for Bellway
which will be integrated into our business strategy. In addition, we have a
programme of activity to looking at specific workstreams to ensure that we
are prepared for the transition to a low carbon economy. For example, we
have a team tasked with delivering the aims of the Future Homes Taskforce
(specifically achieving a 75% reduction in carbon emissions from new
homes). We have also engaged the Carbon Trust to develop science-based
targets for our scope 1, 2 and 3 emissions.
Bellway p.l.c. Annual Report and Accounts 2021
68
Strategic Report Disclosure
recommendation
Risk
Describe the
organisation’s processes
for identifying and
assessing climate-
related risks.
Describe the
organisation’s processes
for managing climate-
related risks.
Describe how processes
for identifying, assessing
and managing
climate-related risks
are integrated into the
organisation’s overall
risk management.
Metrics
Disclose the metrics used
by the organisation to
assess climate-related
risks and opportunities.
Disclose scope 1, scope
2, and if appropriate,
scope 3 greenhouse
gas emissions, and the
related risks.
Describe the targets used
by the organisation to
manage climate-related
risks and opportunities
and performance
against targets.
Summary of our progress to date
Section reference
As a construction company we are capital intensive, requiring high investment
in homes under construction, and are dependent on sources of raw and
refined materials.
Our established framework for managing risks enables the implementation
of the Board’s policies on risk management and internal control sitting
with management.
A dialogue is maintained between our Head of Risk and departmental
heads consisting of internal reviews and challenge. The purpose of these
discussions is to consider and assess current, new and emerging risks to the
business, including climate related risks. Updates are then applied to our risk
register when necessary.
Bellway p.l.c. Annual
Report and Accounts
2021 – (pages 48 and
53)
As a responsible housebuilder, we take our sustainability impact and
commitments seriously and recognise the value of measurement, target
setting and reporting in driving our greenhouse gas (GHG) emissions down.
Bellway p.l.c. Annual
Report and Accounts
2021 – (page 61)
In accordance with the Companies Act 2006 (Strategic Report and Directors’
Reports) Regulations 2013 and the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018
(SECR), we report on our GHG emissions as part of the annual Strategic
Report. Our GHG reporting year is the same as our financial year and the
previous year’s figures have been provided as comparators. This is the
second year we have reported under SECR with the inclusion of certain
scope 3 emissions (waste and business mileage) as well as total underlying
energy use.
We are currently working with The Carbon Trust to establish a baseline
carbon footprint that will allow us to set science-based scope 1, 2 and 3
GHG emissions targets. We plan for science-based targets (SBT) to be set
and, subject to Board approval, published in 2022.
We have already started to reduce the impact of our scope 1 and 2
emissions, by switching to purchasing electricity through renewable
electricity contracts.
We are also identifying specific opportunities to reduce our carbon
emissions in the short-term. As an example, we are reviewing our car fleet
and car allowance provision to identify how we can incentivise the use of
low emission vehicles and electric vehicles.
Bellway p.l.c. Annual Report and Accounts 2021
69
Strategic ReportStrategic Report Board of Directors and Group General Counsel
and Company Secretary
Paul Hampden Smith
Chairman
Appointed 1 August 2013
N*
R
Denise Jagger
Senior Independent
Non-Executive Director
Appointed 1 August 2013
A
N
R
Background and experience
Paul, a Chartered Accountant, was appointed as
Chairman on 12 December 2018, having previously
been a non-executive director since 1 August 2013, and
Audit Chair since 1 February 2014 until his appointment
as Chairman. Paul was Group Finance Director of Travis
Perkins plc from 1996 until his retirement in February
2013, having worked for Travis Perkins since 1988. He was
previously senior independent non-executive director
and Chairman of the Audit Committee of Clipper Logistics
plc and a non-executive director and Chairman of the
Audit Committee of Pendragon PLC and Redrow plc.
Other appointments
• Grafton Group plc – senior independent non-
executive director, Chairman of the Audit & Risk
Committee and a member of the Nomination and
Remuneration Committees.
• Delapre Abbey Preservation Trust – Treasurer and Chair
of the Finance Committee.
• Cumberland Lodge, Windsor Great Park – Chairman of
the Audit Committee.
• Chairman of Dallington Lawn Tennis Club.
Background and experience
Denise, a solicitor, was appointed as a non-executive
director on 1 August 2013 and became senior
independent non-executive director on 1 November
2018. Until 30 April 2020, Denise was a consultant at
Eversheds-Sutherland LLP, having been a partner
from 2004 to April 2019. Previously she was Company
Secretary and General Counsel at ASDA Group plc,
and prior to this she worked in corporate finance with
Slaughter and May. Denise’s previous non-executive
directorships include Redrow plc and SCS Upholstery plc.
Other appointments
• CLS Holdings plc – non-executive director, Chair of
the Remuneration Committee and a member of the
Audit Committee.
• Pool Reinsurance Limited – non-executive director and
Chair of Remuneration Committee and Nominations
and Conflicts Committee.
• University of York – Chairman and pro Chancellor.
• St Giles Trust – Chairman.
• The National Trust – Trustee.
Jason Honeyman
Group Chief Executive
Appointed 1 September 2017
Keith Adey
Group Finance Director
Appointed 1 February 2012
NR*
NR
Background and experience
Jason commenced employment with the Group in
January 2005 as Managing Director of the Thames
Gateway division, becoming Southern Regional
Chairman in December 2011. Jason joined the Board
as Chief Operating Officer and was promoted to Group
Chief Executive on 1 August 2018.
Background and experience
Keith, a Chartered Accountant, joined Bellway in
December 2008 as Group Chief Accountant, becoming
Group Finance Director on 1 February 2012. Prior to
joining Bellway he worked at KPMG and Grainger plc.
Bellway p.l.c. Annual Report and Accounts 2021
70
Governance Jill Caseberry
Independent
Non-Executive Director
Appointed 1 October 2017
Ian McHoul
Independent
Non-Executive Director
Appointed 1 February 2018
A
N
R*
A*
N
R
Background and experience
Jill was appointed to the Board as a non-executive
director on 1 October 2017. Jill has extensive sales,
marketing and general management experience across
a number of blue-chip companies including Mars,
PepsiCo and Premier Foods.
Other appointments
• Halfords Group plc – non-executive director,
Remuneration Committee Chair and a member of the
Audit, Nominations and ESG Committees.
• C&C Group plc – non-executive director and a
member of the Remuneration and ESG Committees.
• St. Austell Brewery Company Limited – non-
executive director and a member of the Audit and
Remuneration Committees.
• Bakkavor Group plc – non-executive director, a
member of the Remuneration Committee, a member
of the Nomination Committee and designated
workforce engagement Non-executive Director.
Background and experience
Ian, an accountant, was appointed to the Board as a non-
executive director on 1 February 2018, and appointed as
Chairman of the Audit Committee on 12 December 2018.
He was Finance & Strategy Director of the Inntrepreneur
Pub Company Limited from 1995 to 1998 and then served
at Scottish & Newcastle plc from 1998 to 2008, first as
Finance Director of Scottish Courage and later as Group
Finance Director of Scottish & Newcastle plc. From 2008
to 2017 he was Chief Financial Officer of Amec Foster
Wheeler plc. He was also a non-executive director of
Premier Foods plc from July 2004 to April 2013.
Other appointments
• The Vitec Group plc – Chairman.
• Britvic plc – senior independent non-executive director,
Chairman of the Audit Committee and member of the
Nomination and Remuneration Committees.
• Young & Co’s Brewery, P.L.C. – non-executive director
and Chairman of the Audit Committee and member of
the Remuneration Committee.
Simon Scougall
Group General Counsel
and Company Secretary
Appointed 1 February 2016
Key:
A
N
R
Audit Committee
Nomination Committee
Remuneration Committee
NR
Board Committee on Non-Executive
Directors’ Remuneration
*
Denotes Committee Chair
Background and experience
Simon, a solicitor, was appointed Group General Counsel
and Company Secretary in February 2016. Simon joined
Bellway in March 2011 and has held senior positions
within the Group including that of Group Commercial
Director. He has over 20 years’ experience in the
housebuilding sector, working either in-house or for
clients in private practice.
Bellway p.l.c. Annual Report and Accounts 2021
71
GovernanceGovernance Chairman’s Statement on Corporate Governance
The UK construction sector has historically been a male
dominated environment and tangible change will not
happen overnight. We are committed to increasing the
number of females in the business especially in senior
roles, and we are investing in our apprentice and graduate
schemes to bring new diverse talent into the business.
We are particularly pleased that this year one of our female
site managers, Jazele Parys, won a coveted national pride
in the job award. Details of gender and ethnicity split in
the Group can be found on page 79 of the Nomination
Committee Report.
Sustainability
I reported last year that the Board had set targets focused
around allocating more time to the rapidly emerging ESG
agenda and I am pleased to update you on the significant
efforts that have been made in this area during the year.
Bellway’s commitment to operating in a responsible
and ethical manner is a key component in our evolving
sustainable business model. During the year our Group
Finance Director has been assigned governance
accountability for all ESG risks, including climate change and
we have established a two-tiered approach to the oversight
and management of our ESG strategy and risks:
1)
The introduction of the Sustainability Leadership Team
comprising of our Group Finance Director, Group
General Counsel and Company Secretary and the Group
Commercial Director.
2) The introduction of the Sustainability Steering Committee
led by our Group Finance Director, Group General
Counsel and Company Secretary, risk owners and
sustainability specialists from around the business.
In 2017, the Financial Stability Board released its report on the
recommendations of the TCFD. We recognise the importance
of these disclosures and are committed to implementing the
recommendations in full. This is our first year implementing
the TCFD recommendations, and we will continue to refine
and develop our approach. More information on TCFD
reporting can be found on page 67.
We continue to work towards our previously publicly
announced CR targets and notably we have achieved our
carbon reduction target two years early, reducing scope 1
and 2 emissions per home sold by 24.0% against a targeted
reduction of 10%.
Board effectiveness and evaluation
In line with the UK Corporate Governance Code, we
undertake a formal and rigorous annual evaluation of
our own performance and that of our Committees and
individual directors. We operate a three-year cycle of internal
and externally facilitated reviews. Bellway’s last externally
facilitated evaluation took place in 2020, and for 2021 the
evaluation was conducted internally with the support of the
Group General Counsel and Company Secretary.
Each Director completed a questionnaire in relation to the
performance of the Board and any committees on which
they were a member. This was followed by individual
discussions with each Director and the Group General
Counsel and Company Secretary on the points raised.
The Board recognises
that diversity extends
beyond the boardroom
and values diversity across
the workforce.
Paul Hampden Smith
Chairman
Dear Shareholder
Diversity
The Board believes both corporate governance and
decision-making are improved if the Board is made up
of highly qualified directors from diverse backgrounds.
The Board is therefore committed to making appointments
on merit, against objective criteria and strongly supports
boardroom diversity in all its characteristics including but
not limited to age, gender, race, education, professional
background and experience. The Nomination Committee
is actively working to identify a candidate pool for the next
round of Board appointments which will bring the Board
composition in line with the Parker Review recommendations
and I am pleased to report that women continue to make up
33% of our Board. Our Board Diversity Policy is available to
view on our website.
The Board recognises that diversity extends beyond the
boardroom and values diversity across the workforce.
Our objective is to become a more open, diverse and
inclusive organisation. To realise this we are committed to
providing a great working environment which recognises that
people from different backgrounds, experiences and abilities
can bring fresh ideas and innovation to improve our business
and practices. We want to ensure that equality, diversity and
inclusion is embedded in our culture, and reflected in our
people and behaviours. An Inclusion and Diversity Policy has
been issued during the year to help support our business
leaders progress towards this goal. Diversity training has been
completed by 99.6% of our people.
Bellway p.l.c. Annual Report and Accounts 2021
72
Governance My performance was assessed by the Senior Independent
Non-Executive Director, who considered the views of
the other directors and the Group General Counsel and
Company Secretary as part of the process.
I evaluated the performance and effectiveness of each of
the Directors and the Group General Counsel and Company
Secretary. Each Committee chairperson reviewed the
responses to the Committee questionnaires before reaching
their conclusions on how the Committees had performed
during the year. The Board, led by myself, evaluated its
own performance.
These evaluations concluded that the Board and Committees
were well run and continued to be operating effectively.
The main areas highlighted for further development or
improvement were:
• Annual review of the crisis management protocol with
a focus on learnings.
• Have clarity of board objectives based on the evaluation
feedback and identify tangible actions for what will be
done differently.
The whole Board is available for questions at the AGM, to
which institutional and private investors are invited to attend.
I am pleased to report that at the last AGM over 98% of
total votes cast were cast in favour of the resolutions put to
shareholders by the Board.
The Senior Independent Non-Executive Director and
I are always available to discuss issues with current
and prospective shareholders and institutions, as and
when required. In addition, the whole Board is regularly
updated at Board meetings on shareholder and investor
views and activities by the Group Chief Executive, Group
Finance Director and Group General Counsel and
Company Secretary.
Further information for shareholders is available on our
website at www.bellwayplc.co.uk.
Paul Hampden Smith
Chairman
18 October 2021
• ESG progression (as detailed further on page 57).
Board evaluation 2019/20 update
• Following COVID-19, the reintroduction of Chairman
dinners and divisional visits by Non-Executive Directors.
• Chairman and Senior Independent Director
succession planning.
The areas highlighted for improvement in last year’s externally
facilitated Board evaluation and progress made are set out in
the table to the right.
Compliance with the UK Corporate Governance
Code (the ‘Code’)
I am pleased to confirm that the Board considers that it has
complied throughout the year with the detailed provisions of
the Code published in July 2018. The Code is available, free of
charge, from the Financial Reporting Council, online at
www.frc.org.uk or by telephoning 020 7492 2300.
Shareholder engagement
The Group encourages active dialogue with its private and
institutional shareholders, and the Directors communicate
with both existing and prospective institutional shareholders
on a regular basis and as requested.
As a result of COVID-19 there has been increased interest
from institutional investors in the Group. During the year our
Executive Directors hosted virtual presentations attended by
institutional investors, analysts and shareholders, with other
members of the senior management team being present.
We also consulted with a number of shareholders on our
Remuneration Policy. The Board receives regular updates
from our advisers on investors’ and analysts’ views on
the Group.
Shareholders are also kept up-to-date with our progress
throughout the year through the Annual Report and
Accounts, and announcements to the London Stock
Exchange for the full year and half year results and
trading updates.
Action point
Progress
The strategic priorities of the
Group were agreed at the
annual strategy day in July.
An update will now be added
as a separate agenda item
for the Board to report on
progress.
A new Sustainability
Leadership Team and
Sustainability Steering
Committee have been
established to include the
Group Finance Director and
Group General Counsel and
Company Secretary along
with other senior stakeholders.
Simply Sustainable and The
Carbon Trust have also been
appointed to support on key
ESG matters.
The Nomination Committee
continues to consider
succession planning, notably
a Senior Leaders Development
Programme has been
launched during the year
to support the identification
and development of our
future leaders.
Consideration is being given
by management to applying
for Non-Executive Directors
roles at other companies.
The Board might consider
how it ensures that insightful
strategic discussions are not
deferred to the Annual Board
Strategy Day.
The Board might consider
allocating more time to
the rapidly emerging ESG
agenda with a nominated
Board lead (Chair or CEO)
to reflect the importance
the investor community is
placing on it.
Continue to consider
succession planning as
an ongoing priority.
Consideration should be
applied to ongoing Executive
Director and Group General
Counsel and Company
Secretary development
specifically aligned to
the rapidly evolving
Board agenda.
Bellway p.l.c. Annual Report and Accounts 2021
73
GovernanceGovernance Governance
Board Leadership and Division of Responsibility
Corporate Governance Report
Left to Right:
Ian McHoul
Denise Jagger
Simon Scougall
Jason Honeyman
Paul Hampden Smith
Jill Caseberry
Keith Adey
Board of Directors
Audit
Committee
Nomination
Committee
Remuneration
Committee
Board Committee on
Non-Executive Directors’
Remuneration
See pages 80 to 89
See pages 78 to 79
See pages 90 to 110
See page 77
Executive Directors
Group General Counsel
and Company Secretary
Head Office Senior
Management Team
Regional Chairmen
Divisional Boards
Bellway p.l.c. Annual Report and Accounts 2021
74
Statement about applying the principles of
good governance
The Board acknowledges the importance of, and is
committed to the principle of, achieving and maintaining a
high standard of corporate governance and in promoting a
positive culture within the Group.
We have applied the principles of good governance, including
both the Main Principles and the Supporting Principles, by
complying with the Code. Further explanations of how the
Main Principles and Supporting Principles have been applied
are set out below and in the Remuneration Report.
Leadership
The Board is the principal decision-making body of the
Group and is collectively responsible to shareholders for
promoting the long-term success of the Group.
At the date of this report the Board consists of six directors
whose names, responsibilities and other details appear on
pages 70 to 71. Currently two of the directors are executive
and four are non-executive.
The Board sets the strategic aims, ensures that the necessary
resources (including finances, people and materials) are
in place for the Group to meet these objectives and also
reviews management performance. It defines the Group’s
values and standards and ensures that its obligations to its
shareholders are understood and met.
The Board has put in place the following structure which
allows it to provide entrepreneurial leadership of the Group
and to delegate authority for operational matters through a
framework of prudent and effective controls, which enable
risk to be assessed and managed.
Chairman
• Promoting the highest standards of integrity, probity
and corporate governance throughout the Group and
particularly at Board level including ensuring that the
correct cultural tone is set from the top.
• Ensuring that the Group complies with the requirements of
the UK Corporate Governance Code and adheres to the
highest standards of governance.
• Leading the Board and ensuring its effectiveness.
• Setting the Board’s agenda.
• Ensuring the Directors receive accurate, timely and
clear information.
• Ensuring effective communication with shareholders.
• Ensuring the effective conduct of Board meetings and
facilitating the effective contribution of all directors and the
Group General Counsel and Company Secretary.
• Leading the evaluation of the performance of the Board,
its committees, individual directors and Group General
Counsel and Company Secretary.
• Overseeing the induction of any new directors and the
development of existing directors.
• Ensuring that the views of shareholders are communicated
to the Board as a whole.
• Encouraging constructive relations between the Executive
and Non-Executive Directors and the Group General
Counsel and Company Secretary.
• Approving land purchases over specified limits in
conjunction with the wider Board.
Group Chief Executive
• Implementing the strategy agreed by the Board.
• Leading the Executive Directors, the Group General
Counsel and Company Secretary and the senior
management team in the day-to-day running of the
Group’s business.
• Ensuring the effective implementation of Board decisions.
• Reviewing the Group’s organisational structure and
recommending changes as appropriate.
• Supervising the activities of the Regional Chairmen
and divisional senior management, overseeing their
development and succession planning.
• Overseeing Group operations.
• Overseeing the activities of subsidiary companies.
• Approving land purchases within specified limits.
• Overseeing divisional expansion plans.
• Together with the Chairman, providing coherent leadership
of the Group, including representing the Group to
customers, suppliers, government, shareholders, financial
institutions, employees, the media, the community and the
general public.
• Keeping the Chairman informed of all important matters.
• Overseeing the health and safety, sales and marketing,
public relations and technical departments.
Group Finance Director
• Devising and implementing the financial strategy and
policies of the Group including treasury and tax.
• Developing budgets and financial plans.
• Responsible for the Group’s investor relations activities.
• Responsible for delivering the Board agreed sustainability
and ESG strategy.
• Overseeing the sustainability, finance, IT and risk departments.
Senior Independent Non-Executive Director
• Acting as a sounding board for the Chairman, Executive
Directors and the Group General Counsel and
Company Secretary.
• Being available to shareholders.
• Leading the annual appraisal of the Chairman.
• Holding meetings with the Non-Executive Directors without
the Chairman present.
Non-Executive Directors
• Constructively challenging management.
• Contributing to the development of strategy.
• Scrutinising the performance of management.
• Ensuring integrity of financial information and financial controls
and ensuring systems of risk management are robust.
• Determining appropriate levels of Executive Director,
Group General Counsel and Company Secretary and
Regional Chairman remuneration.
• Appointing and removing Executive Directors and
succession planning.
• Serving on Board committees.
Bellway p.l.c. Annual Report and Accounts 2021
75
GovernanceGovernance Division of Responsibilities
Group General Counsel and Company Secretary
• Supporting the Chairman and Group Chief Executive in
fulfilling their duties.
• Keeping the Board regularly updated on corporate
governance, legal, commercial and HR matters.
• Responsible for legal compliance throughout the Group
including ensuring policies and procedures are maintained
and updated on a regular basis.
• Providing support to the Board and Committees.
• Overseeing the legal, company secretarial, HR and Group
Office Strategic land and planning departments.
• Supporting the Group Finance Director on the sustainability
and ESG agenda.
• Managing the Group’s external legal panel.
Board effectiveness
All Directors have access to the advice and services of
the Group General Counsel and Company Secretary and
his department. All of the Directors may take independent
professional advice at the Group’s expense where they judge
it necessary to discharge their responsibilities as Directors.
In accordance with the Code, all of the Directors will retire
from the Board and offer themselves for re-election or
election at the forthcoming AGM. None of the Executive
Directors hold external directorships.
The Board, its committees and the individual Directors are
subject to annual performance evaluation and all Directors
are subject to annual re-election by shareholders. The
Board regularly reviews the Directors’ other interests and
appointments to ensure that there are no conflicts of interest.
The Chairman is responsible for leading the Board and
ensuring it operates effectively. The Directors possess an
appropriate balance of skills, knowledge and experience to
meet the requirements of the business. The Board recognises
the value of both gender and ethnic diversity as well as the
recommendations of the Parker Review, this will be taken into
careful consider when addressing Board succession.
Meeting attendance
During the year there were eight full Board meetings,
including one meeting dedicated almost entirely to strategy.
Director
Paul Hampden
Smith (Chairman)
Date appointed
to the Board
1 August 2013, appointed
Chairman on 12
December 2018
Denise Jagger
1 August 2013
Jill Caseberry
Ian McHoul
1 October 2017
1 February 2018
Jason Honeyman
1 September 2017
Keith Adey
1 February 2012
Number of
meetings
attended during
the year
8/8
8/8
8/8
8/8
8/8
8/8
The number of committee meetings are set out in each
committee report. There were no absences from any Board
or committee meetings.
Conflicts of interest
Pursuant to the provisions of the Companies Act 2006
relating to conflicts of interest, the Board has put in place a
register to deal with the notification, authorisation, recording
and monitoring of Directors’ interests and these procedures
have operated throughout the year.
Board activity during the year
The Board meets formally and informally during the year to
consider strategy, performance, risk, major land acquisitions,
potential conflicts of interest and reports from senior
employees and external advisers.
One meeting a year is devoted entirely to the consideration of
strategy where the Board agrees the way forward and ensures
that the necessary financial, human, land and other resources
are in place to meet its objectives. Areas focused on during
the strategy day were the following strategic priorities of:
1. Sustainability and the wider
5. Production.
ESG agenda.
6. Digitisation.
2. Equality, Diversity and Inclusion.
7. Customer First.
3. Delivering Growth.
8. Margin Improvement.
4. Becoming an employer of choice.
Each year we hold separate annual conferences for the
divisional Managing Directors, Finance Directors, Sales
Directors, Technical Directors, Commercial Directors and
Planning Managers which are attended by executive
Directors or members of the Group Office senior
management team. These conferences have been impacted
by COVID-19 but have been held virtually wherever possible.
We also host informal Board dinners where senior management
meet members of the Board. The Chairman meets with
executive management and individual directors on a regular
basis outside of Board meetings. This process allows for two-way
discussion enabling the Chairman to act as necessary to deal
with any issues relating to Board effectiveness.
The Executive Directors and Group General Counsel and
Company Secretary regularly met with the divisions during
the year. The Board also received presentations from the
Regional Chairmen and certain Group functional heads with
an update on their operating area including the opportunities
and challenges they face, and from external advisors.
Each Non-Executive Director normally separately visits
at least one division during the year, independent of the
Executive Directors, and reports their key findings and
observations at the next Board meeting. This has been
impacted by the COVID-19 pandemic but visits are scheduled
to recommence in 2022.
The meetings with operational management ensured that
the Board’s standards and values for integrity and honesty are
disseminated. Each of our divisions has its own management
team and staff who manage and take pride in the success
of their own operational business within the strategy set by
the Board. In this way we create a culture that motivates and
rewards our colleagues. We promote a supportive culture
that enables our employees to develop their talents and skills.
The Board assesses the Groups corporate culture through
various interactions with senior management and the wider
workforce including Board presentations, divisional visits, Board
dinners and the employee awards. The Board have concluded
that the corporate culture of the Group is of a high standard.
Bellway p.l.c. Annual Report and Accounts 2021
76
Governance The Board has adopted a schedule of matters that are
specifically reserved for its decision, which includes strategy
and management, structure and capital, financial reporting
and controls, internal controls covering both financial and
operational areas of the business, land acquisition above
specified limits, contracts and agreements, communication,
Board membership and other appointments, remuneration,
delegation of authority, corporate governance matters, Group
policies and other miscellaneous items.
In addition, it has a series of matters that are dealt with at
regular Board meetings including both an operational and
a strategic review, a financial review, major land acquisitions,
major projects, risk, health and safety, sales and customer
care, HR, reporting requirements, corporate governance and
internal control, including any whistleblowing issues.
The Board also takes a report from the Group General Counsel
and Company Secretary on legal, HR, commercial and
corporate governance matters at each Board meeting.
In between Board meetings the Directors receive updates
from the Chairman or the Group General Counsel and
Company Secretary to advise them of any significant matters
affecting the Group or its performance.
During the year the work carried out by the Board included:
• Strategy.
• Considering regular reports on KPIs from the Group
Chief Executive.
• A review of risk and internal control.
• Consideration of recommendations from the
Board committees.
• Scrutiny of reports from the Group Chief Executive, Group
Finance Director, Group General Counsel and Company
Secretary and senior management at each Board meeting.
• Considering regular reports on health and safety matters
from the Group Chief Executive and approval of the health
and safety targets FY22.
• Approval of major land purchases.
• Board evaluation.
• Approval of debt facility agreements.
• Receiving presentations from the four Regional Chairmen on
the performance of the divisions under their responsibility.
• Receiving presentations from Finance, HR, IT, Procurement,
Sales and Marketing, Commercial and Technical Head
Office departments as well as the new Better with
Bellway Committee.
• Receiving presentations on sustainability and approval of
CR targets for FY22.
• Approval of the Equality, Diversity and Inclusion Policy.
• Approval of revised terms of reference for Board committees.
• Approval of major IT expenditure.
• Approval of the Group’s insurance programme.
• Approval of the Group’s Slavery and Human Trafficking
Statement for 2020.
• Approval of the Annual Report and Accounts for 2019/20.
• Approval of the preliminary announcement, interim results
and trading updates.
• Recommending the final dividend for 2020/21 to be
approved by shareholders and approval of the interim
dividend for 2021/22.
• Approval of the tax strategy.
• Future Homes Taskforce review and presentation from
the Managing Director of the HBF.
• Defence document review and meeting with
corporate advisors.
• Crisis protocol review.
• Approval of HR (including E, D & I) KPIs.
• Receiving regular updates on legacy apartment schemes
where fire safety improvements may be required or where
works are planned or underway.
Training and development
The Board receives appropriate training and updates on
various matters relevant to its role and responsibilities.
Training needs are reviewed as part of the performance
evaluation process through the Board’s skills matrix and on
an ongoing basis.
Following this year’s evaluation no specific training needs
were identified.
Non-Executive Directors attend external training sessions
designed specifically for non-executives and members of
Board committees as and when required.
Board balance and independence
The roles of Chairman and Group Chief Executive are separate,
with a clear division of responsibilities ensuring a balance of
responsibility and authority at the head of the Group.
The Company considers all of its Non-Executive Directors,
including the Chairman, to be independent, as defined in the
Code. Each of the Independent Non-Executive Directors has,
at all times, acted independently of management and has no
relationship that would materially affect the exercise of his or
her independent judgement and decision-making.
The Senior Independent Director is Denise Jagger, with whom
shareholders may raise any queries or concerns they may have.
Whenever any director considers that he or she is interested
in any contract or arrangement to which the Group is or
may be a party, due notice is given to the Board. No such
instances have arisen during the year.
The Board committees
The Board has formally constituted Audit, Nomination and
Remuneration Committees. The terms of reference for these
committees are available either on request from the Group
General Counsel and Company Secretary, at the AGM or on
our website: www.bellwayplc.co.uk.
Other committees of the Board are formed to perform certain
specific functions as and when required.
The work carried out by each of the Board committees
during the year is described in the reports of the committee
chair which follow.
Board Committee on Non-Executive Directors’
Remuneration
The Board Committee on Non-Executive Directors’
Remuneration comprises the Executive Directors and is
chaired by the Group Chief Executive.
This committee meets at least once a year. Last year it met on
one occasion to review the fees and terms of appointment
of the Non-Executive Directors (excluding the Chairman)
and received advice from the Group General Counsel and
Company Secretary and external remuneration consultants
when required.
Bellway p.l.c. Annual Report and Accounts 2021
77
GovernanceGovernance Nomination Committee Report
Composition, Succession and Evaluation
• With support from the executive management and Group
HR, continue to develop the succession plan for those
immediately below Board level.
Responsibilities and terms of reference
The main areas of the Nomination Committee’s (the
‘Committee’) responsibilities are:
• To review the structure, size and composition of the
Board, in accordance with the Board’s Diversity Policy,
and recommend to the Board any changes it considers
appropriate. This encompasses membership of the Board
committees and the reappointment, if appropriate, of Non-
Executive Directors at the end of their term of office.
• To consider succession planning not only within the
Board but also immediately below Board level and ensure
appropriate plans are in place.
• To identify candidates to fill Board vacancies and
nominate these to the Board for approval. Appointments
to the Board are made on merit using a formal, rigorous
and transparent process against objective criteria
recommended by the Committee. These criteria take into
account the skills, knowledge and experience of existing
members of the Board and the importance of diversity, in
all its aspects, within the Board. The Committee is aware
of the recommendations of the Parker Review and will
take these into consideration when making future Board
appointments. The appointment of a Non-Executive
Director is for a specified term and reappointment is not
automatic, rather it is made on the recommendation of
the Committee.
• To carry out an annual performance evaluation of
the Committee and review the results of the Board
performance evaluation in relation to the composition of
the Board.
The Committee meets at least twice a year and operates
under its own terms of reference. These have been agreed
by the Board and are available at www.bellwayplc.co.uk/
investor-centre/governance/committees.
The members of the Committee are shown in the table to
the left.
Activities in 2020/21
• The Committee’s focus during the year has been on the
action plan to improve engagement and diversity within
the Group.
• A new Equality, Diversity and Inclusion Policy was
approved and introduced.
• Building on the success of the 2020 Bellway Graduate
Recruitment Programme, we took the opportunity to recruit
female and candidates from an ethic minority where
possible, which helps drive diversity within Bellway and
provides possible leaders of the future.
• Equality, diversity and inclusion e-learning continues to
be issued to employees and forms part of the mandatory
training a new employee must undertake on commencing
their new role. 98.9% of employees have completed this
training within three months of this being issued to them.
• A new Agile Working Policy has been developed and
introduced, recognising the benefits flexible working has for
colleagues and the Group.
The Committee’s focus
during the year has been on
the action plan to improve
engagement and diversity
within the Group.
Paul Hampden Smith
Chairman of the Nomination Committee
Membership and meeting attendance
Director
Paul Hampden
Smith (Chairman)
Date appointed to
the Committee
1 August 2013, appointed
Committee Chairman on
1 November 2018
Denise Jagger
1 August 2013
Jill Caseberry
Ian McHoul
1 October 2017
1 February 2018
Number of
meetings
attended during
the year
3/3
3/3
3/3
3/3
Main focus in 2020/21
• To increase the drive to improve equality, diversity and
inclusion throughout the Group through the development
and approval of the Group’s Equality, Diversity and
Inclusion Policy.
• To continue to develop, with support from the executive
management and Group HR, the succession plan for those
immediately below Board level.
Focus areas for 2021/22
• To focus upon Board succession, in particular for the
Chairman and the Senior Independent Director, taking into
account the recommendations from the Parker Review.
• To continue our work to improve diversity across the
Group, taking into account the recommendations from the
Parker Review.
Bellway p.l.c. Annual Report and Accounts 2021
78
Governance • The Committee considered and recommended to the
Board that Ian McHoul be invited to remain on the Board
for a second three-year term from 1 February 2021.
• Planning for Board succession with regard to the
recommendations of the Parker Review.
• Presentation from the Group HR Director on Equality,
Diversity and Inclusion across the Group and support for
the existing proposed action plan for further improvement.
• Also during the year, the Committee continued to develop,
with support from the executive management and
Group Human Resources, the succession plan for those
immediately below Board level. This exercise will look to
promote diversity and inclusion where possible.
The Committee have had oversight of the following activities
undertaken by the Group General Counsel and Company
Secretary with support from the Group HR Director.
• Continue to work with the recruitment consultants’ panel,
with a particular focus on improving diversity.
• Promoting the benefits of the new site manager training
programme which is being run in partnership with the
NHBC. The first cohort of 15 employees includes six females
and a further two 15 person cohorts are due to commence
by the end of the financial year.
• We launched a series of case studies in our staff newsletter
focusing on female employees who are progressing their
careers within the business.
• Working with the Regional Chairmen and Managing
Directors to develop progression and retention plans for
key employees within each division, promoting diversity
where possible.
• The roll out of leadership development training for
Regional Chairmen, Managing Directors and Group heads
of department.
Focus in 2021/22
• Succession of the Chairman and Senior Independent
Director. The Committee recognises the importance of
gender and ethnic diversity and as part of the succession
plan is working with an agency to identify a diverse pool
of candidates to increase the diversity of the current Board
where possible.
• Chairman succession is being led by the Senior
Independent Director. The Chairman’s nine year tenure
as a Non-Executive Director ends on 31 July 2022. It is the
intention of the Group to extend his tenure for a further
five months beyond this nine year period with a planned
retirement at the 2022 AGM. Succession planning is well
underway and the Committee have engaged specialist
consultants to assist with appointing the successor.
• Senior Independent Director succession will be led by the
Chairman. The Senior Independent Director’s nine year
tenure ends on 31 July 2022. It is intended that a successor
will be appointed by this date.
• To continue our work to improve diversity across the
Group, taking into account the recommendations from the
Parker Review.
Director and employee profile
The following tables show the gender and ethnicity split in
the Group as at 31 July 2021. For the first time the Group has
reported Board and workforce ethnicity statistics and will
report on progress towards improving diversity in future years.
More detail on the Group’s efforts to improve diversity can be
found on page 18:
Male
No.
Male
%
Female
No.
Female
%
Total
No.
Total
%
Board of Directors
Executive
Committee and
direct reports
4
11
Senior managers
140
Other employees
1,819
Total
1,974
67
69
82
67
2
5
33
31
6
16
30
897
934
18
170
33 2,716
2,908
<1
<1
6
93
Asian or
Asian British
Black or
Black British
Mixed/Multiple
Ethnicity
Other
Ethnic/Arab
White British/
European/Non-
European
Any other
ethnic group
Prefer not
to say
Not
specified
Board of Directors
Executive Committee and
direct reports
Monthly paid employees
Weekly paid employees
Total
–
–
39
1
40
–
–
24
9
33
–
1
23
3
27
–
–
5
2
7
6
15
2,020
622
2,663
–
–
5
1
6
–
–
26
2
28
–
–
84
20
104
Paul Hampden Smith
Chairman
18 October 2021
Bellway p.l.c. Annual Report and Accounts 2021
79
GovernanceGovernance Audit Committee Report
Audit, Risk and Internal Control
I am pleased to provide you with our Audit Committee
Report. This provides you with an update of the work
undertaken by the Audit Committee (the ‘Committee’)
during the period, and sets out how we have discharged our
responsibilities and provided assurance on the integrity of the
2021 Annual Report and Accounts, along with an insight into
key areas considered.
The Committee supports the Board in achieving the
objectives of the corporate governance framework, with its
principal activities focused on:
• The integrity of financial reporting.
• The quality of narrative reporting
• The quality and effectiveness of internal controls and
risk management systems.
• Procedures relating to the prevention and detection
of fraud and bribery.
• Risk and internal audit.
• External audit.
Committee governance
The Committee currently comprises three Independent
Non-Executive Directors, who have significant and
diverse experience. I believe that between us we have
an appropriate and relevant combination of experience
and knowledge.
I am a Chartered Accountant, currently Chairman of Vitec
Group plc, Chair the Audit Committee of both Britvic plc
and Youngs & Co.’s Brewery P.L.C. and was Chief Financial
Officer of Amec Foster Wheeler plc until 2017. The Board
considers that I have recent and relevant financial experience
as required by the Code. As part of the effectiveness review,
the Nomination Committee has also confirmed that it is
confident that the collective and broad experience of the
Committee members enables them to act effectively as an
Audit Committee.
Further information on the experience and knowledge of the
Committee members is included in the Directors’ biographies
on pages 70 to 71.
In line with the terms of reference, there were three meetings
of the Committee during the year, scheduled in line with the
Group’s financial reporting timetable, and all members of the
Committee attended each meeting.
The Chairman, Group Chief Executive, Group Finance
Director, Group General Counsel and Company Secretary,
Group Financial Controller and Group Head of Risk and
Audit attend meetings by invitation and were present at all
meetings during the year. In addition, the Group IT Director
and Head of Infrastructure presented at one meeting in the
period. The Committee is supported by the Deputy Group
Company Secretary who acts as Secretary to the Committee.
The Committee supports
the Board in achieving the
objectives of the corporate
governance framework.
Ian McHoul
Chairman of the Audit Committee
Membership and meeting attendance
Director
Ian McHoul
(Chairman)
Date appointed to
the Committee
1 February 2018,
appointed Committee
Chairman on 12
December 2018
Denise Jagger
1 August 2013
Jill Caseberry
1 October 2017
Number of
meetings
attended during
the year
3/3
3/3
3/3
Main focus in 2020/21
• Reviewed whether the disclosure of notable one-off items
as exceptional and non-exceptional is appropriate.
• Oversaw the transition of the external auditor from KPMG
LLP to Ernst & Young LLP.
• Considered the risks associated with cyber security and the
Groups IT system.
• Reviewed the findings from various areas of internal
audit focus.
Focus areas for 2021/22
• Reviewing the performance of the external auditor after the
first audit cycle.
• Internal controls and risk management.
• Ensuring the Group has the appropriate disclosures
required by the TCFD in the 2022 Annual Report and
Accounts.
Bellway p.l.c. Annual Report and Accounts 2021
80
Governance Representatives of KPMG LLP (‘KPMG’) attended the October
2020 meeting where they also met with the Committee
independently of management. Following the completion of
the external audit tender process in the prior financial year,
Ernst & Young LLP (“EY”) were also present at the October
2020 meeting to ensure a smooth transition from KPMG. EY
attended all of the subsequent meetings where they also met
with the Committee independently of management.
No significant concerns were raised during the discussions
between the external auditors and the Committee. I also had
further discussions, independently of each other, with the
Group Finance Director, Group Head of Risk and Audit and
external auditor, and reported relevant information to other
members of the Committee.
Detailed papers are prepared and circulated in advance of
Committee meetings by both management and the external
auditor, thereby allowing informed discussions, challenge
and decisions to take place.
Responsibilities and terms of reference
A comprehensive version of the Committee’s terms of
reference is available on the Group’s website at www.
bellwayplc.co.uk/investor-centre/governance/committees.
A review of the terms of reference during the period
determined that they remain appropriate and in line with best
practice, reflecting the Committee’s responsibilities in line with
both the Code and other regulations.
Main activities during the year
The Committee has been in regular contact with
management since the onset of COVID-19 to consider
whether the pandemic has had any impact on key
judgement and accounting areas. During the year, this has
included a review of land values, the treatment of significant,
one-off items, the presentation of the net legacy building
safety expense and related items, and the Group’s viability
and going concern assessments insofar as these issues
affected the year ended 31 July 2020 or 31 July 2021.
The activities undertaken at the October 2021 meeting
concluded the Committee’s activities in relation to the
Group’s financial reporting for the year ended 31 July 2021.
The main activities performed by the Committee at these
meetings are described below:
Meeting date
Activities
October 2020
The Committee:
• Reviewed and challenged papers produced
by management in relation to the impact the
COVID-19 pandemic has had on key judgements
and accounting areas. These included a review
of the approach taken with regards to site
valuations, land values, and the treatment of
exceptional items.
• Reviewed the final draft of the 2020 Annual Report
and Accounts, together with a report produced by
KPMG, which detailed their findings both on areas
of key financial reporting judgements/matters and
other areas of audit focus.
• Reviewed and concluded that the 2020 Annual
Report and Accounts presented a fair, balanced
and understandable assessment of the Group’s
position and prospects after considering reports
from the external auditor. The Committee
recommended the 2020 Annual Report and
Accounts to the Board for approval.
• Reviewed the draft viability statement to appear
in the 2020 Annual Report and Accounts and
the presumption that the Group remains a
going concern, together with the supporting
assumptions and financial forecasts.
• Received a paper on significant judgmental
areas prepared by management and provided
appropriate challenge to the assessment of items
designated as exceptional.
• Reviewed a paper which analysed notable one-off
items, both exceptional and non-exceptional, that
affected profit during the year ended 31 July 2020
and provided challenge of the treatment of this.
• Considered and challenged management about
the use of alternative performance measures
(“APMs”) and whether they are appropriate or
whether GAAP measures would be more relevant.
• Considered a paper produced by management
setting out management’s assessment in relation
to potential risks associated with legacy building
safety improvements and work that will be
performed and whether appropriate provisions
and disclosures were included in the financial
statements of the Group, including the contingent
liability note.
• Reviewed and approved the Slavery and Human
Trafficking Statement 2020.
• Received and challenged a Risk and Internal
Audit update.
• Considered the findings of the performance
evaluation of the Committee.
• Received a report from KPMG on the outcomes of
the Kingman, Brydon and CMA consultations into
the audit market.
• Held a private meeting with KPMG and the Group
Head of Risk and Audit.
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GovernanceGovernance Audit Committee Report continued
Meeting date
Activities
January 2021
The Committee:
• Received and challenged a risk management
update from the Group Head of Risk and Audit
and reviewed the Risk Management Policy.
• Received and challenged an update on the
Internal Audit activities undertaken in the previous
calendar year and provided feedback on the
proposed 2021 Internal Audit plan.
• Received and challenged a presentation from
the Group IT Director and Head of Infrastructure
on cyber security which included information
on the Group’s IT system, general and Bellway
specific cyber risks, existing controls and ongoing
improvements. It was agreed that a follow-up
presentation would be made at the October 2021
Committee meeting.
• Reviewed the terms of reference of the
Committee, number of meetings and skills and
experience of the Committee. No items were
identified that needed to be updated.
• Reviewed the Group’s policies and procedures
in relation to Whistleblowing, Anti-Bribery and
Corruption, Anti-Slavery and Data Protection.
• Reviewed and challenged a report produced
by management setting out the prospective
accounting treatment, recognition and disclosure
of items relating to legacy building safety
improvements.
• Reviewed and approved the Group’s amended
accounting policies in relation to i) revenue
recognition, and ii) trade and other receivables.
• Assessed the performance of the new external
auditor, including obtaining an explanation from
EY in relation to the firmwide annual Audit Quality
Inspection findings compared to their peers and
understanding the effect, if any, this had on the
Bellway audit.
• Obtained an audit transition update from EY.
• Held a private meeting with EY and the Group
Head of Risk and Audit.
March 2021
The Committee:
• Considered a paper produced by management
setting out management’s assessment in relation
to potential risks associated with legacy building
safety improvements and work that will be
performed and whether appropriate provisions,
disclosures and narrative were included in the
Interim Announcement.
• Reviewed, discussed and challenged a paper
produced by management setting out the basis
for preparing the Interim Announcement on a
going concern basis. The paper incorporated
a sensitivity analysis based on the Group’s
internal forecasts.
• Reviewed the final draft of the 2021 Interim
Announcement.
• Challenged EY’s audit plan, including the
proposed Group, subsidiary and divisional
materiality for the 2021 audit. This included
understanding the differences in approach
compared to the previous external auditor. EY
also discussed how they intended to perform the
audit depending on COVID-19 restrictions, and
the Committee obtained confirmation that quality
and timely delivery would be unaffected.
• Received confirmation that the audit fee for the
year ending 31 July 2021 was unchanged from the
audit tender.
• Reviewed the Independent Auditor Policy.
• Reviewed and challenged a Risk and Internal
Audit update, including an update to the Internal
Audit plan.
• Held a private meeting with EY and the Group
Head of Risk and Audit.
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82
Governance Meeting date
Activities
October 2021
The Committee:
• Reviewed the final draft of the 2021 Annual Report
and Accounts, together with a report produced by
EY which detailed their findings both on areas of
key financial reporting matters and other areas of
audit focus.
• Reviewed and concluded that the 2021 Annual
Report and Accounts presented a fair, balanced
and understandable assessment of the Group’s
position and prospects after considering reports
from both internal audit and the external auditor.
The Committee recommended the 2021 Annual
Report and Accounts to the Board for approval.
• Reviewed the draft viability statement to appear
in the 2021 Annual Report and Accounts, together
with the supporting assumptions and financial
forecasts.
• Received a paper on significant judgemental
areas prepared by management, including the
controls, and provided appropriate challenge.
• Reviewed a paper which analysed notable one-
off items, both those separately disclosed on the
face of the income or otherwise, that affected
profit during the year and provided challenge of
the treatment of these.
• Considered and challenged management
about the use of APMs and whether they are
appropriate or whether GAAP measures would
be more relevant.
• Considered a paper produced by management
setting out management’s assessment in relation
to potential risks associated with legacy building
safety improvements and work that will be
performed and whether appropriate provisions
and disclosures were included in the financial
statements of the Group, including the contingent
liability note.
• Reviewed a paper produced by management
setting out which improvements suggested by the
FRC had been incorporated in to the 2021 Annual
Report and Accounts, and the rationale for those
that had not been.
• Reviewed and approved the Slavery and Human
Trafficking Statement 2021.
• Reviewed a paper produced by management
setting out the main controls for preventing and
detecting fraud.
• Reviewed and challenged a Risk and Internal
Audit update.
• Considered whether the interaction between
the internal audit and risk function and external
auditor during the period has been appropriate.
• Reviewed and considered the effectiveness of the
internal audit function.
• Considered the findings of the performance
evaluation of the Committee.
• Held a private meeting with EY and the Group
Head of Risk and Audit.
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GovernanceGovernance Audit Committee Report continued
Integrity of financial reporting
Significant financial reporting matters
In carrying out its duties, the Committee is required to assess
whether suitable accounting policies have been adopted and
to challenge the robustness of significant financial matters
that affect the Annual Report and Accounts. This process
includes reviewing and challenging papers produced by
management and confirming whether the policies and
judgements remain appropriate for the Group.
The Committee consider the following to be the most
significant financial reporting matters based on their potential
effect on the Group’s financial statements:
• Revenue recognition (new).
• Cost of sales recognition.
• Carrying amount of land and work in progress.
• Going concern.
• Legacy building safety improvement provision.
• Net legacy building safety expense disclosure.
The table below sets out the matters considered and
the action performed by the Committee during the year
in relation to these significant financial reporting matters
of the Group.
Key financial matters
Action performed by the Committee
Conclusion
Revenue recognition (new)
Matter considered
Revenue of £3,122.5 million has been recognised
in the period. The majority of housing revenue
is recognised on a point in time basis either i)
when the completed dwelling is transferred to the
customer; or ii) when the home is build complete
and all material contractual obligations have been
satisfied. For a small number of contracts, revenue
is recognised over time from the point that the
land is irrevocably transferred to the customer.
The Committee understands the Group’s
revenue recognition policy and the related
systems and controls.
During the year the Committee reviewed two
papers produced by internal audit setting out the
revenue recognition policy and adherence with
this around reporting periods.
The external auditor explained to the Committee
that they had assessed the design effectiveness
of key controls surrounding revenue recognition,
summarised the output of data analytics
in identifying unusual trends and provided
an explanation of the detailed substantive
testing performed.
The Committee also reviewed a summary
prepared by EY explaining the findings from their
work testing the design of the Group’s systems
and controls pertaining to revenue recognition.
Following enquiries
with management
and the external
auditor, the Committee
concluded that there
are appropriate systems
and internal controls
in place to ensure
revenue is recognised
appropriately, and that
the Group’s revenue
recognition policy has
been properly applied
in these financial
statements.
Cost of sales (before net legacy building safety expense) recognition
Matter considered
Cost of sales (before net legacy building safety
expense) of £2,470.6 million has been recognised
on housing and other revenue. Cost of sales for
completed housing sales is recognised based
on the latest whole site/phase margin, which
is derived as part of the site/phase valuation
process. These valuations are updated frequently
throughout the life of the site/phase and
include both actual and forecast selling prices,
land costs and construction costs. The forecast
costs and revenues are estimates and are
inherently uncertain due to potential changes in
market conditions.
The Committee understands the Group’s gross
profit recognition policy and the related systems
and controls.
Management outlined the existing systems and
controls surrounding gross profit recognition
and the valuation process. The Committee
discussed these controls, challenging
management where appropriate.
The external auditor explained to the Committee
that they had assessed the design effectiveness of
key controls surrounding gross profit recognition
and the valuation process, summarised the
output of data analytics in identifying unusual
trends and provided an explanation of the
detailed substantive testing performed.
The Committee also reviewed a summary
prepared by EY explaining the findings from their
work testing the design of the Group’s systems
and controls pertaining to the valuation process.
Following enquiries
with management
and the external
auditor, the Committee
concluded that there are
appropriate systems and
internal controls in place
to assess and quantify
both actual and forecast
selling prices and costs,
and that the Group’s
profit recognition policy
is appropriate and has
been properly applied
in these financial
statements.
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84
Governance Key financial matters
Action performed by the Committee
Conclusion
Carrying amount of land and work in progress
Matter considered
Land and work in progress are the most
significant assets on the Group’s balance sheet
and at 31 July 2021 had a book value of £3,915.3
million. The carrying value of land and work
in progress is affected by both the revenue
recognition and profit recognition policies of
the Group. In addition all inventory is held at the
lower of cost and net realisable value, which is
determined by the whole site/phase margin as
set out in the ‘cost of sales recognition’ section.
The risk is that for any site/phase, currently
trading or not, that the whole site/phase margin
may be negative resulting in a net realisable
value that is below cost. Divisional management
review all sites/phases to ensure any with a
forecast negative whole site/phase margin have
an appropriate provision, and this has been re-
assessed at regular intervals during the year.
Going concern
Matter considered
The financial statements have been prepared on
a going concern basis. If the financial statements
were not prepared on this basis, significant
adjustments and presentational changes would
be required to the balance sheet.
The Committee understands the Group’s
methodology in reviewing the carrying value of
the Group’s land and work in progress and the
surrounding controls. Management provided
a summary of the work undertaken which was
considered by the Committee.
The external auditor explained to the Committee
the work they performed in relation to the
carrying value of the Group’s land and work in
progress. This included the procedures identified
in relation to profit recognition and a review of
the latest site/phase valuation for all sites/phases
active during the year and those that are yet to
commence production.
Following enquiries
with management
and the external
auditor, the Committee
concluded that there
are appropriate systems
and internal controls
in place to assess the
carrying value of the
Group’s land and work
in progress, and that
the carrying value of
these assets in the
financial statements
is appropriate.
The Committee reviewed a paper produced by
management setting out detailed forecasts and
adverse scenarios compared to a base case
forecast. These were then compared against
the Group’s debt facilities to show the expected
headroom and debt covenant compliance and to
determine whether the Group could continue to
meet its liabilities as they fall due.
Further details in relation to the Group’s going
concern and viability assessment can be found
on pages 55 and 129..
Following a review of
this paper and challenge
of both management
and the external
auditor, the Committee
concluded that the
going concern basis of
preparation continues
to be appropriate in the
context of the Group’s
expected funding and
liquidity position.
Legacy building safety improvement provision
Matter considered
Legacy building safety improvement provisions
totalling £116.0 million were recognised in the
balance sheet as at 31 July 2021.
The Committee reviewed a paper setting out
the latest building regulations and Government
guidance in the complex area of fire safety, the
IAS 37 requirements for recognising a provision,
and how this applies to the developments that
management are currently aware of that may
require replacement cladding and/or related fire
safety works.
The paper set out the utilisation of the provision
during the year, estimates of the remaining
provision and the expense recognised in the
income statement during the year.
Following a review of
this paper and enquiry
with management and
the external auditor, the
Committee concluded
that the legacy building
safety improvement
provision held in
the balance sheet
is appropriate.
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85
GovernanceGovernance Audit Committee Report continued
Key financial matters
Action performed by the Committee
Conclusion
Net legacy building safety expense disclosure
Matter considered
A net legacy building safety expense of £51.8
million has been recognised in the year.
Separate disclosure is required on the income
statement when, in the opinion of the Board,
a transaction is material by size or nature and
of such significance.
The Committee understands the accounting
and presentational requirements of IFRSs relating
to the separate disclosure of material items of
income or expense that could affect decisions
made by the primary users of the Annual Report
and Accounts.
The Committee reviewed a paper produced by
management using the above framework, which
set out the treatment of whether the net legacy
building safety expense should be disclosed
separately. The Committee ensured consistent
principles were established and applied, and that
the external auditor agreed with the conclusions
reached early in the reporting process.
The Committee gave careful consideration to
the judgements made in the presentation and
disclosure of the net legacy building safety
expense, ensuring the Annual Report and
Accounts as a whole provides a balanced view,
including the presentation of GAAP measures
and APMs.
Following enquiries
with management
and the external
auditor, the Committee
concluded that the
net legacy building
safety expense is
appropriately presented
and disclosed in the
financial statements.
Viability statement
In accordance with provision 31 of the Code and the FRC
guidance on Risk Management, Internal Control and Related
Financial and Business Reporting, the Committee challenged
management on the assumptions, methodology and
timespan that the viability statement covers.
A paper by management was considered by the Committee
which set out the resilience of the Group to the emerging
and principal risks and uncertainties to various adverse
sensitivities. These scenarios included a reduction in both the
total number of legal completions and private average selling
price, with overheads, land spend and construction spend
reducing accordingly. The results were then compared to
the Group’s financing facilities to ensure sufficient headroom
exists and to determine whether the Group could continue to
meet its liabilities as they fall due.
The paper concluded that the viability statement and going
concern basis of preparation is appropriate. This was then
recommended to the Board for approval.
Financial Reporting Council (‘FRC’)
During the year the Group received a letter from the FRC’s
Conduct Committee in relation to the 2020 Annual Report
and Accounts. This letter noted a relatively small number
of areas where the FRC believed that users of the accounts
would benefit from improvements to existing disclosures,
if the matters are considered material and relevant. The
Committee received and challenged a paper produced
by management setting out, with rationale, whether each
suggested improvement should be incorporated in to the
FY21 Annual Report and Accounts. The majority of the
improvements suggested by the FRC have been included,
and this approach was agreed by the Committee. The FRC
provides no assurance that the Annual Report and Accounts
are correct in all material aspects nor verifies the information
provided, but considers compliance with reporting
requirements. There has been no further correspondence
with the FRC.
Quality of narrative reporting
2021 Annual Report and Accounts: fair, balanced
and understandable
Group Risk and Audit and Company Secretarial provided
a paper to the Committee to assist them in concluding
whether the 2021 Annual Report and Accounts are fair,
balanced and understandable. This independent review
of the Annual Report and Accounts ensured the various
components satisfied the requirements when read as a
whole. This review also considered whether feedback
provided by shareholders in respect of the 2020 Annual
Report and Accounts has been reflected.
Bellway p.l.c. Annual Report and Accounts 2021
86
Governance In addition, the Committee performed a comprehensive review of the Annual Report and Accounts considering items such as:
Fair
Balanced
Understandable
• Provide a comprehensive review of
the Group’s strategy and activities
during the year which is consistent
with the business model.
• Provide a balanced view of the
performance and position of the entity,
with both significant positive and
negative points disclosed.
• The Annual Report and Accounts are
clear and understandable and have
consistent messaging throughout.
• The narrative section is both
consistent throughout and also with
the financial results and performance.
• The key accounting judgements
considered by the Committee are
appropriately disclosed and are
consistent with those considered
by EY.
• There are clear links between the
strategy and KPIs.
• Market conditions are clearly
described, and principal risks and
uncertainties are both accurate and
complete.
• All material transactions and issues
faced by the Group are included
within the financial statements and
disclosed where required.
• The KPIs and APMs have remained
consistent and there has been no
change in the methodology.
The Committee concluded that the 2021 Annual Report and Accounts, when taken as a whole, is fair, balanced and understandable.
ESG and climate risk considerations
ESG and climate risks are considered by the Board due
to their importance, although the associated disclosure
requirements are separately reviewed by the Committee.
The Committee is aware of the increasing significance of ESG
reporting matters and received a summary report from KPMG
at the October 2020 meeting setting out their expected road
map of climate risk disclosures in the annual report and
accounts. This report, along with a subsequent update from
EY in October 2021, has enabled the Committee to review
and assess the Group’s existing disclosures in relation to
sustainability. Furthermore, management are assessing the
additional disclosure requirements that need to be included
in the 2022 Annual Report and Accounts, when The Task
Force on Climate-related Financial Disclosures (“TCFD”)
become mandatory.
Quality and effectiveness of internal controls
and risk management systems
The Committee is responsible for reviewing and assessing
the Group’s internal controls and risk management systems
and providing guidance on these to the Board. The Board is
responsible for reviewing the effectiveness of the system of
internal controls.
Throughout the year the risk register for the Group has been
reviewed and updated by management. This review includes
ensuring the completeness of risks, assessing their likelihood,
their impact and the effectiveness of the control environment
to mitigate the risks.
Risk is considered by the Board, with a full review of the
risk register taking place throughout the business at least
annually. The internal control and risk management process
only reduces the risk of material misstatement or loss, and
does not eliminate this risk completely.
The principal risks facing the Group, which are described in
the Strategic Report on pages 48 to 51, are regularly reviewed
and cover all aspects of Bellway’s operations including land
acquisition, planning, construction, health and safety, sales,
HR, IT and legal and regulatory compliance.
The continuing role of the Board is, on a systematic and
ongoing basis, to review the key emerging and principal
risks inherent in the business, the operation of the systems
and controls necessary to manage such risks and their
effectiveness, and to satisfy itself that all reasonable steps are
being taken to mitigate these risks.
The key areas of control are as follows:
• The Board has agreed a list of key risks which affect the
Group, that are reviewed throughout the year and has
considered the extent to which the measures taken by
the Group mitigate those risks.
• The acquisition of land and land interests is initiated by
divisional management and reviewed by the appropriate
Regional Chairman prior to submission to Head Office
for approval. All land acquisitions must achieve minimum
financial acquisition criteria and are subject to approval
by the Executive Directors and in certain circumstances,
approval by the Board.
• A comprehensive monitoring and reporting system is
in place including annual budgets, monthly forecasting
and management reporting, incorporating variance
analysis and commentary. This is produced by divisional
management and reviewed by the Regional Chairmen
and functional heads at Head Office. Summaries are also
provided to the Executive Directors.
• Monthly divisional board meetings are held to review
divisional performance, which are attended by the
Regional Chairmen. The Executive Directors attend certain
divisional board meetings on a regular basis during the
year, and this is supplemented with Regional Chairmen
visits to divisions.
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87
GovernanceGovernance Audit Committee Report continued
• Site/phase valuations are produced periodically throughout
the life of a site/phase, with a summary of the actual and
forecast costs and revenues produced at a divisional level
prior to review by the divisional management team and
Head Office team.
• Regular visits to sites by in-house health and safety teams
and external consultants to monitor health and safety
standards and performance.
• A central treasury function operates at Head Office
ensuring the appropriate financing is obtained for the
Group as a whole.
• A number of the Group’s key functions are dealt with
centrally. These include taxation, pensions, insurance, IT,
legal, HR, regulatory compliance and company secretarial
functions. This centralisation ensures a consistent approach
and the appropriate range of skills to manage these
specialised areas.
Throughout the year, the Committee received reports from
the Group Risk and Internal Audit team on the following
areas of focus:
Procedures relating to the prevention and
detection of fraud and bribery
Whistleblowing
The Group’s Whistleblowing Policy is well publicised at all
locations and allows all employees and members of the
supply chain to raise concerns in confidence to either the
Group General Counsel and Company Secretary, Deputy
Group Company Secretary or, alternatively, an independent
third party. The Group encourages employees and members
of the supply chain to raise any concerns in an open
and honest way. These concerns could be in relation to
possible wrongdoing in financial reporting, breaches of
Group policies and procedures, or other matters such as
harassment, bullying, money laundering, modern slavery
or discrimination.
All whistleblowing reports are investigated and confidentially
investigated by senior, independent personnel and the
findings are reported to the Board.
During the year the Committee approved minor changes
to the Whistleblowing Policy.
Review
Focus and outcomes
Legal completions
(half-year and year-end)
2 reviews
Divisional compliance
9 reviews
Testing of legal completions is undertaken on a bi-annual basis to check that sales have been
recorded and recognised in the correct period, with appropriate supporting documentation.
For FY21, this work provided positive assurance that the processes operate effectively and
prevent the occurrence of cut-off issues.
These reviews assess whether the design and operation of accounting and commercial
processes in trading divisions is compliant with the requirements of key Group policies.
Findings and recommendations have resulted in policy improvement, updated procedural
guidance and focused training for divisional management.
Fire safety risk assessment
1 review
This risk assessment provided positive assurance that robust processes, controls and action
plans are in place to effectively manage fire projects and remediation works across the Group.
GDPR compliance
1 review
Health and safety
1 review
This review focused on the paper based records held within sales offices and sites offices,
including the need to collate such information, and storage and disposal processes. No
material recommendations were raised.
This review considered how the Group monitors the health and safety practices of its
subcontractors. In light of the ongoing pandemic, consideration was also given to COVID-19
safety measures implemented at sites. Recommendations were minor and resulted in some
enhanced communications from the Group Health and Safety function to sites.
Journals
(half-year and year-end)
2 reviews
Testing of journals is undertaken on a bi-annual basis to check the validity and accuracy of a
sample of transactions and confirm that appropriate journal reviews are being undertaken by
the trading divisions. For FY21, only administrative improvement opportunities were identified.
Strategic land management
risk assessment
1 review
This risk assessment provided positive assurance that robust processes, controls and action
plans are in place to ensure the Group makes appropriate land purchases and maintains
a sufficient strategic land bank.
System access management
risk review
1 review
This risk assessment provided positive assurance that robust processes, controls and action
plans are in place to ensure access to Group systems and networks is allocated on an
‘as needed’ basis, in line with current roles and responsibilities.
Third party management
1 review
This risk assessment provided positive assurance that robust processes, controls and
action plans are in place to risk assess, manage and monitor the Group’s key third parties
(including subcontractors and suppliers).
Where any control recommendations are made by the external auditors, these are considered, and where relevant are
implemented to further strengthen the control environment.
Bellway p.l.c. Annual Report and Accounts 2021
88
Governance The Committee acknowledges the provisions contained in
the Code in respect of audit tendering. In conformance with
these requirements, Bellway will be required to tender the
external audit no later than for the 2030 financial year end.
Auditor independence and non-audit fees
The Independent Auditor Policy, which seeks to preserve the
independence of the external auditor by defining those non-
audit services which the external auditor may and may not
provide, was reviewed during the year.
Any engagement with the external auditor needs to be
approved, in advance, by the Audit Committee.
The Group’s external auditor is only engaged to provide
statutory audit services.
For an analysis of fees paid to EY see note 4 to the accounts.
The ratio of non-audit fees for the year to the external audit
fee was 0:1. The Committee considers EY to be independent
and EY, in accordance with professional ethical standards,
provided the Committee with written confirmation of
its independence throughout the year. The Committee
monitors all fees paid to the external auditor at each
Committee meeting.
The Group has a policy which includes certain restrictions on
the recruitment of employees from the external auditor.
The Committee confirms there are no independence issues
in relation to the external auditor and that these policies have
been adhered to throughout the year.
Audit Committee evaluation and effectiveness
During the year the Committee assessed both the
performance of the Committee as a whole and that of
its individual members utilising a questionnaire that was
internally facilitated. No major areas of improvement
were identified.
Following a review of these results, I consider the Committee
to be effective and it provides a robust and independent
oversight over the financial reporting, narrative reporting,
internal control and risk management, fraud and bribery
prevention and detection, risk and internal audit, and
external audit activities of the Group. The Committee has an
appropriate and complementary set of skills and experience
that enables it to deliver the aforementioned.
Ian McHoul
Chairman of the Audit Committee
18 October 2021
Bribery Act
The Group’s Anti-Bribery and Corruption Policy and
procedures are circulated throughout the Group and
are included on the Group’s intranet.
Internal audit
Testing of processes which help the Group prevent and
detect fraud is undertaken as part of a rolling programme
throughout the year by the Group Risk and Internal
Audit team, and is focused in the following areas: bank
reconciliations, employee expenses, payments, journal
transactions, sales completions, site valuations and supplier
bank details.
Risk and internal audit
The Group has a risk and audit function which, in part,
performs internal audit reviews. The Group Head of Risk
and Audit has a direct reporting line into both the Group
Finance Director and myself. During the year the risk and
audit function undertook a number of internal audit reviews,
utilising specialists from within relevant functions. The Group
Head of Risk and Audit provided the Committee with a
summary of the findings together with recommendations
to further enhance the control environment. A register
is maintained centrally which monitors progress against
any system and control enhancements to ensure they
are implemented appropriately and in a timely and
controlled manner.
External audit
Audit performance and effectiveness
The performance of the external auditor is regularly reviewed
by both management and the Committee, and this is done
formally on an annual basis. As set out in my 2020 Audit
Committee report, the Group appointed EY as its external
auditor for the year ended 31 July 2021. Accordingly, it was not
considered appropriate to formally review the performance
of KPMG, the previous external auditor, in relation to the year
ended 31 July 2020. Instead, the Committee considered both:
• The performance of EY in relation to the Audit Quality
Inspection (‘AQI’) results that were published on 14 July
2020, understanding whether any of the findings would
have affected the Bellway audit; and
• The performance of the EY engagement partner in the
AQI’s over the last three years.
Following this review, the Committee recommended to the
Board, which is in turn recommending to the shareholders,
that EY be re-appointed as auditor of the Group.
Auditor rotation
For the audit of the year ended 31 July 2020, EY attended
key meetings to observe KPMG during the audit process to
ensure a smooth transition. Following the completion of the
audit for the year ended 31 July 2020, both management and
the Committee continued to focus on ensuring a smooth
transition, including setting up workshops with relevant head
office functional heads and a site visit to ensure EY had
obtained a detailed understanding of the Bellway processes,
systems and controls in advance of starting their audit
planning procedures. There has been regular communication
between EY and both management and the Committee
throughout the transition process.
Bellway p.l.c. Annual Report and Accounts 2021
89
GovernanceGovernance Remuneration Report
Remuneration Committee Report
Performance and reward in 2020/21
The Committee continues to operate a remuneration
structure based on the three core elements of basic salary,
annual cash bonus and a share-based long-term incentive
plan, which it considers closely aligns management interests
with those of stakeholders.
The Group has delivered a positive set of results, consistent
with its growth strategy despite COVID-19 headwinds.
The number of housing completions rose by 34.8% to 10,138
(2020 – 7,522), underlying operating profit rose to £531.5
million(1,4) (2020 – £321.7 million). Basic earnings per share rose
by 102.4% to 316.9p per share (2020 – 156.6p) and underlying
RoCE increased to 16.9%(1,4) (2020 – 10.8%).
The Company has awarded the Executive Directors a
bonus payment of 119.42% of basic salary and the long-term
incentive plan awarded in November 2018 will vest at 28.7%
of the maximum award based on performance over the three
financial years to 31 July 2021. These shares are required to be
held for a further two years following vesting. The Committee
considers that these outcomes are reflective of the strong
performance of the Group and the Executive Directors during
the twelve-month and the three year period to 31 July 2021.
The Committee determined that there was no reason to
exercise its powers of discretion in relation to either the bonus
or LTIP outcomes.
As we disclosed last year, whilst not a requirement of the
current policy, the Group Chief Executive informed the
Committee that he will invest all bonus he receives for FY21
above 90% of salary (after paying tax and national insurance)
in Bellway shares which he will keep for a minimum of
three years.
During the year, the Committee approved the grant of PSP
Awards to the Executive Directors which will vest to the extent
TSR performance conditions are met over the period to 31
July 2023, with any shares delivered being subject to a further
2 year holding period. Whilst ordinarily the awards would be
over shares worth 150% of salary, in light of the reduced share
price at the time of grant and to avoid any windfall gains, it
was agreed it would be appropriate to reduce the award to
140% of salary. Details of these awards are set out on pages
94 and 95.
The Committee continues
to operate a remuneration
structure… which it considers
closely aligns management
interests with those
of stakeholders.
Jill Caseberry
Chair of the Remuneration Committee
Annual Statement
Dear Shareholder
I am pleased to present the Report of the Remuneration
Committee (the ‘Committee’). This report consists of this
Annual Statement and the Annual Report on Remuneration
for the 2020/21 financial year, which will be subject to a single
advisory shareholder vote at the forthcoming AGM.
In 2020 as the Company responded to COVID-19, the
Committee decided it would not be appropriate to undertake
a full review of the 2017 Directors’ Remuneration Policy which
had been due for review. The Policy, which was subject
to minimal changes in 2020, has undergone a full review
this year, detailed consultation with shareholders over the
Summer months and is also included within this report. It will
be presented as a resolution to our shareholders at the 2021
AGM (resolution 3).
Bellway p.l.c. Annual Report and Accounts 2021
90
Governance We are proposing to increase the limit on PSP awards to
200% of salary but retain the PSP award level of 150% of salary
for Executive Directors in 2021/22. The Committee considers
this level of award is currently sufficient to incentivise long-
term, sustained performance but will keep this under review.
Any proposal to increase this level of grant in future years
will be discussed first with leading shareholders. We are
proposing to introduce a third, equally weighted measure
this year of earnings per share alongside the two relative TSR
performance tests against housebuilders and the FTSE 350.
The Committee has also started to develop a 3 year target
for carbon reduction in our supply chain as a fourth equally
weighted measure in the PSP which we intend to introduce
from 2022/23. We would have liked to introduce this measure
for the 2021 grant. However, we wish the performance
achievement to be externally verified and for the Committee
to have the benefit of external expertise to set the targets and
did not feel we could set a suitably robust target range by the
time we need to make the grant.
Concluding remarks
The Committee continues to monitor changes in best
practice and corporate governance to ensure the policy,
how it is operated and our disclosures remain appropriate.
We hope you are supportive of the approach we have
taken during these unprecedented times and will support
the resolutions approving this report and the policy at the
2021 AGM.
Jill Caseberry
Chair of the Remuneration Committee
18 October 2021
How we will implement the Remuneration Policy
in 2021/22
Although we are seeking authority for a revised policy at
this year’s AGM, we are not proposing to make significant
changes in how it will be operated.
There will be a 3.2% increase to the Executive Directors’
salaries in 2021/22 which is in line with the level of average
increase to the workforce in general. As previously noted,
the pension rates for the Directors will be aligned with
those of the workforce at the end of 2022. All other benefits
remain unchanged.
The 2021/22 annual bonus will continue to be based mainly
on financial performance with a bonus opportunity of 80% of
salary based on underlying operating profit. The remaining
bonus opportunity of 40% of salary will be based on the
same strategic measures as last year of land bank, customer
care and employee engagement. There has been a modest
re-weighting between categories to recognise the increasing
importance of the land bank, success of the Customer First
initiative and employee engagement. Health and safety
performance will be taken into account as part of the
Committee’s overall assessment of the bonus payment which
it does every year before making a final determination.
We are proposing to introduce mandatory deferral into
Bellway shares for 3 years of any bonus earned above the
level of 100% of salary. This structure for deferral recognises
that the bonus opportunity for Executive Directors is below
the mid-market level for both housebuilding companies and
UK listed companies of similar size to Bellway. However, if an
Executive Director’s shareholding is below the target of 200%
of salary, then they are encouraged to build that holding
through share purchases as well as retaining shares they earn
through our incentive plans. Our proposed new policy also
normally requires this level of shareholding to be retained for
two full years after leaving Bellway for whatever reason.
The Committee believes that the manner in which it sets
and operates this policy is clear to executives and is aligned
to our corporate culture. We operate it with regard to risks
inherent in the business and marketplace, providing the
opportunity for executives to earn rewards in a manner which
is proportionate to the value delivered against clear targets.
Bellway p.l.c. Annual Report and Accounts 2021
91
GovernanceGovernance Remuneration Report continued
Remuneration at a glance
How remuneration links to our strategy (see pages 31 to 34 for details of our performance).
Strategic objective
Link to remuneration
Metric
Performance against metric
Earnings growth and driving
down costs
Annual bonus and future
long-term incentive plan
awards
Underlying operating profit
Achieved
Volume growth and focus
on RoCE
Customer First
Customer First
Employee Engagement
Annual bonus
Sufficient land bank of plots with DPP
Achieved
Annual bonus
Annual bonus
Annual bonus
Retain 5-star homebuilder3 status
Customer satisfaction score
Achieved
Achieved
Results of Employee Engagement Survey
Partly achieved
Customer First and responsible
employer/developer
Underpin to annual bonus Overall health and safety performance
Achieved
Value creation through capital
and dividend growth
Long-term incentive plan Relative TSR against two comparator groups Partly achieved
How our executive directors were paid during 2020/21
Chief
Executive
Group
Finance
Director
43%
41%
16%
£2,021
42%
39%
19%
0
0
0
£
£1,227
0
£500
£1,000
£000
£1,500
£2,000
Fixed pay
Other items
Annual bonus
Long-term share awards
Impact of share price fall on LTIP
Bonus outcomes – see page 94
The 2020/21 bonus was based on financial and strategic targets.
Strategic
objective
Operating profit
(underlying)
Weighting
(% of salary)
Threshold
(25% pays out)
Maximum value
(100% pays out)
85.2%
£384.750
million
£435.375
million
Actual(a)
£541.9
million
Payment
(% of maximum)
100%
Payment
(% of salary)
85.2%
Strategic objectives and performance against target
Land bank
Customer
First
The land bank of plots with DPP (available for completion in the following financial year)
exceeded the maximum target and an award of 16.8% of salary was achieved.
We retained our 5-star homebuilder3 status.
The Group’s customer satisfaction score in 2021 was 86.6% compared with the base
of 85.0%.
Score
Achieved in full – 16.8%
of salary awarded.
Achieved in full – 7.2%
of salary awarded.
Achieved – 4.8% of
salary awarded.
Employee
Engagement
The Group’s employee engagement score in 2021 was 88.75% compared with the base
of 77%.
Partly achieved – 5.42%
of salary awarded.
Note:
a. For underlying operating profit and land bank bonus purposes, targets and outcomes include our share of joint ventures.
LTIP outcomes – see page 95
The PSP awards granted in 2018/19 were based on a three-year TSR performance for the period to 31 July 2021.
Metric
Performance condition
Threshold target
Stretch target
Actual % vesting
50% of
awards
50% of
awards
Total
Relative TSR against an index of peer housebuilders
24.5% TSR
(median)
47.0% TSR
(median +22.5%)
21.1%
Bellway TSR
Relative TSR against the FTSE 250 (excluding
financial services companies and investment trusts)
Rank 75
(median)
Rank 38 (upper
quartile)
Rank 59
Bellway
0%
28.7%
28.7%
Bellway p.l.c. Annual Report and Accounts 2021
92
Governance Annual Report on Remuneration
Committee membership and activity
The Committee met seven times during the year and details of the Committee members and their attendance are set out in the
table below.
Membership and meeting attendance
Director
Jill Caseberry (Chair)
Paul Hampden Smith
Denise Jagger
Ian McHoul
Date appointed to the Committee
Number of meetings
attended during the year
1 October 2017 (appointed as Committee Chair on 13 December 2017)
1 August 2013
1 August 2013
1 February 2018
7/7
7/7
7/7
7/7
The operation of the Committee is conducted by reference to its terms of reference which have been prepared to comply with
relevant statutory, regulatory and corporate governance requirements and best practice and are available at www.bellwayplc.
co.uk/investor-centre/governance/committees.
None of the Committee members have a personal financial interest, other than as shareholders, in the matters to be decided.
There are no conflicts of interest arising from cross-directorships and no day-to-day involvement in running the business.
The Committee appointed Korn Ferry as independent external advisers, following a competitive tender process, on 1 January
2019. Korn Ferry do not provide any other services to the Company other than to the Remuneration Committee and the Board
Committee on Non-Executive Directors’ Remuneration. They are members of the Remuneration Consultants Group and abide
by its Code of Conduct. The Committee is satisfied that Korn Ferry are independent. The total fee paid to Korn Ferry for advice
to the committees during the year was £68,616 (2020 – £78,052). The Committee also benefited from advice received from the
Group General Counsel and Company Secretary on issues other than those relating to his own remuneration.
The remuneration of the non-executive directors (apart from the Chairman) is determined by the Board Committee on Non-
Executive Directors’ Remuneration, which comprises the executive directors. It also receives advice from the Group General
Counsel and Company Secretary and Korn Ferry.
Main focus in 2020/21
• Approved the long-term incentive awards vesting levels for the 2019/20 year.
• Approved the 2019/20 Remuneration Report.
• Set the bonus targets for the 2021/22 year.
• Engaged with employees on executive remuneration through the Employee Listening Groups.
• Made awards under the long-term incentive scheme.
• Reviewed and determined the remuneration packages for the Executive Directors and the Group General Counsel and
Company Secretary, and the first tier of management below Board level.
• Reviewed remuneration policies for senior management below Board level and the wider workforce.
• Considered the impact of COVID-19 and reflected on executive remuneration.
• Conducted a review of the Directors’ Remuneration Policy for approval at the 2021 AGM.
Focus areas for 2021/22
• Approve the bonus payments and long-term incentive awards vesting levels for the 2020/21 year.
• Approve the 2020/21 Remuneration Report.
• Set the bonus targets for the 2022/23 year.
• Engage with employees on executive remuneration through the Employee Listening Groups.
• Make awards under the long-term incentive scheme.
• Review and determine the remuneration packages for the Executive Directors and the Group General Counsel and
Company Secretary, and the first tier of management below Board level.
• Review remuneration policies for senior management below Board level and the wider workforce.
Bellway p.l.c. Annual Report and Accounts 2021
93
GovernanceGovernance Remuneration Report continued
Implementation of Remuneration Policy in 2020/21
The auditor is required to report on the information contained in the following part of this report, as noted on the
relevant sections.
Salary and fees for the year ended 31 July 2021
For 2020/21, Jason Honeyman received a salary of £689,000 and Keith Adey received a salary of £400,427.
Annual bonus for the year ended 31 July 2021
The annual bonus is payable in November 2021 for performance during the year ended 31 July 2021. The performance targets
for the 2020/21 bonus comprised of underlying operating profit and three strategic targets.
The actual bonus payment against underlying operating profit was determined on the following basis:
Strategic
objective
Operating profit
(underlying)
Weighting
(% of salary)
Threshold
(25% pays out)
Maximum value
(100% pays out)
85.2%
£384.750
million
£435.375
million
Actual(a)
£541.9
million
Payment
(% of maximum)
100%
Payment
(% of salary)
85.2%
Underlying operating profit including our share of joint ventures grew by 67.9% to £541.9 million which is above the maximum
threshold.
The basis for payment of the actual bonus against the three strategic measures is set out below:
Strategic pillar Objectives and performance against target
Land bank
Customer
First
Level of land bank plots with detailed planning permission (‘DPP’) (available for
completion in the following financial year) to ensure our growth aspirations are not
frustrated by land shortages in future years. A threshold payment of 4.2% of salary would
be triggered for a threshold number of plots with DPP, with an additional 1% payment for
further improved performance, up to a maximum of 16.8% of salary. The land bank targets
are commercially sensitive and will be disclosed one year in arrears.(b)
The land bank of plots with DPP (available for completion in the following financial year)
exceeded the maximum target and an award of 16.8% of salary was achieved.
Retention of 5-star homebuilder3 status (as measured by the HBF).
We retained our 5-star homebuilder3 status.
Overall customer satisfaction score (as measured by NHBC): A threshold payment of
1.2% of salary would be triggered for a threshold score of 85.0%, with an additional
bonus opportunity on a straight line basis for further improvement in the score, up to
a maximum of 4.8% of salary for a score of at least 86.5%.
Opportunity and score
Maximum –
16.8% of salary
Achieved in full – 16.8%
of salary awarded.
Maximum –
7.2% of salary
Achieved in full – 7.2%
of salary awarded.
Maximum –
4.8% of salary
The Group’s customer satisfaction score in 2021 was 86.6% compared with the base
of 85.0%.
Achieved in full– 4.8%
of salary awarded.
Employee
Engagement
Employee engagement scores (as measured by the August 2021 employee survey):
A threshold payment of 1.5% of salary would be triggered for a threshold score of 77%,
with an additional bonus opportunity on a straight line basis for further improvement in
score, up to a maximum of 6% of salary for a scores of at least 90%.
Maximum –
6% of salary
The Group’s employee engagement score in 2021 was 88.75% compared with the base
of target 77.0%.
5.42% of salary
awarded.
Note:
a. For underlying operating profit and land bank bonus purposes, targets and outcomes include our share of joint ventures.
b. The 2019/20 base target was set at 11,950 plots with a maximum target of 12,200 plots. The actual performance achieved was 9,450 plots.
Health and safety performance is taken into account by the Committee as part of its overall assessment of the bonus payment,
and the Committee has discretion to reduce the overall bonus payment if it considers that health and safety standards have
been unsatisfactory. The Committee is satisfied with the health and safety standards over the year as Bellway continues to
improve performance on the Safety Services UK health and safety incident rate (previously the NHBC health and safety incident
rate), and have improved the score this year to 0.497 (2020 – 0.714).
Bellway p.l.c. Annual Report and Accounts 2021
94
Governance Long-term incentives vesting in respect of performance period ended 31 July 2021
The PSP awards granted in 2018/19 were based on a three-year TSR performance for the period to 31 July 2021. The applicable
vesting percentages will be as follows:
Metric
Performance condition
Threshold target
Stretch target
Actual % vesting
50% of
awards
50% of
awards
Total
Relative TSR against an index of peer housebuilders
comprising Barratt Developments PLC, The
Berkeley Group plc, Bovis Homes Group PLC, Crest
Nicholson Holdings plc, Persimmon plc, Redrow plc
and Taylor Wimpey plc (‘Index’): 25% of this part of
an award vests at the median, increasing pro-rata,
to full vesting at median +22.5% (+7.5% p.a.).
Relative TSR against the FTSE 250 (excluding
financial services companies and investment
trusts): 25% of this part of an award vests at
median, increasing pro-rata, to full vesting at the
upper quartile.
24.5% TSR
(median)
47.0% TSR
(median +22.5%)
21.1%
Bellway TSR
0%
Rank 75 (median)
Rank 38 (upper
quartile)
Rank 59
Bellway
28.7%
28.7%
Regardless of TSR performance, no part of an award will vest unless the Committee is satisfied that there has been an
improvement in the underlying financial performance of the Group over the performance period.
The Committee agreed that this underpin had been met and considered there were no circumstances that warranted the
exercise of discretion. As a result, the following awards are expected to vest in November 2021, and will be subject to a two-year
post-vesting holding period whereby shares may not be sold, other than to pay tax, until November 2023.
Director
Jason Honeyman
Keith Adey
Notes:
Value on award
£000
Number of
shares granted
Vesting
(% of max)
Guaranteed
number of
shares to vest
Share price
change(a)
£000
Dividend
equivalent
£000
Estimated value
at vesting(a)
£000
795
589
28,909
21,413
28.7
28.7
8,301
6,148
56
41
33
24
318
235
a.
Based on a share price of £34.23, being the average share price for the last quarter of the financial year i.e. 1 May – 31 July 2021 as a proxy for the share price at vesting. The estimated value
at vesting includes the value of dividend equivalent shares.
Bellway p.l.c. Annual Report and Accounts 2021
95
GovernanceGovernance Remuneration Report continued
Single figure of total remuneration (audited)
Salary and
fees(a)
£
Taxable
benefits(b)
£
Non-executive Chairman
Paul Hampden
Smith
2021
221,340
2020
213,962
–
–
Executive directors
Pension(c)
£
–
–
Annual
bonus
£
Sub-total
£
Long-term
incentives(d)
£
Other
items(e)
£
Total
£
Total fixed
remuneration
£
Total variable
remuneration
£
–
–
221,340
213,962
–
–
–
–
221,340
221,340
213,962
213,962
–
–
Jason Honeyman 2021 689,000 49,293 137,800 822,804 1,698,897
317,670 4,495 2,021,062
876,093
1,144,969
2020 666,034 44,905 137,800
–
848,739
257,021 4,500
1,110,260
848,739
261,521
Keith Adey
2021 400,427 33,311 80,085
478,190
992,013 235,300
–
1,227,313
500,364
257,021 2,250
759,635
513,823
500,364
713,490
259,271
2020
387,079 33,200 80,085
Non-executive directors
Denise Jagger
2021
69,550
Jill Caseberry
Ian McHoul
2020
67,232
2021
2020
2021
2020
69,550
67,232
69,550
67,232
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
69,550
67,232
69,550
67,232
69,550
67,232
–
–
–
–
–
–
–
–
–
–
–
–
69,550
67,232
69,550
67,232
69,550
67,232
69,550
67,232
69,550
67,232
69,550
67,232
–
–
–
–
–
–
Total
2021 1,519,417 82,604 217,885 1,300,994 3,120,900
552,970 4,495 3,678,365
1,819,906 1,858,459
2020 1,468,771
78,105 217,885
–
1,764,761
514,042 6,750 2,285,553
1,764,761
520,792
Notes:
a. The 2019/20 salary and fees reflects the 20% reduction for April and May 2020 agreed by the Board due to the negative impact of the COVID-19 pandemic.
b. Taxable benefits include car allowance and health insurance and £15,982 for Jason Honeyman which relates to hotel and travel costs.
c.
d.
Pension includes both payments in lieu of pension of £215,352 and contributions to a defined contribution scheme of £2,533. None of the directors are members of the Group’s defined
benefit scheme and only Keith Adey was a member of the defined contribution scheme for part of the year.
The value of long-term incentives in 2021 reflects the vesting of the November 2018 PSP awards, which will be exercisable in 2021/22, including additional shares in lieu of dividends
accrued from the date of grant to the date of vesting. The value shown is based on a share price of £34.23, being the average share price for the last quarter of the financial year i.e. 1 May
– 31 July 2021 as a proxy for the share price at vesting. The 2020 figures for Jason Honeyman and Keith Adey have been adjusted to reflect the actual share prices at the dates of vesting,
which took place after the publication of last year’s report.
e. Other items refer to the discount on the awards, during the year stated, under the Group’s all-employee savings-related share option scheme.
Directors’ share-based rewards and options (audited)
Details all directors’ interests in the Company share-based reward schemes are shown.
Jason Honeyman
Scheme
PSP(a)
PSP(b)
PSP(c)
2013 SRSOS(f)
PSP(d)
2013 SRSOS(f)
Totals
Awards/
options held at
1 August 2020
Granted/
awarded
during the year
Exercised
during
the year
Lapsed during
the year
Awards/
options held at
31 July 2021
Exercise
price/market
price at date of
award (p)
Date of grant/
award
Exercisable/
capable of
vesting from
16,822
28,909
30,667
712
–
–
77,110
–
–
–
–
39,005
771
39,776
(9,066)
(7,756)
–
–
–
–
–
–
–
(712)
–
–
–
28,909
30,667
–
3,450.0
2,750.0
3,370.0
2,528.0
10.11.2017
10.11.2020
22.10.2018
22.10.2021
16.10.2019
16.10.2022
03.12.2019
01.02.2023
39,005
2,317.0
27.10.2020
27.10.2023
771
2,333.0
04.12.2020
01.02.2024
(9,066)
(8,468)
99,352
Bellway p.l.c. Annual Report and Accounts 2021
96
Governance Keith Adey
Scheme
PSP(a)
PSP(b)
PSP(c)
2013 SRSOS(f)
2013 SRSOS(f)
PSP(d)
Totals
Notes:
Awards/
options held at 1
August 2020
Granted/
awarded
during the year
Exercised
during
the year
Lapsed during
the year
Awards/
options held at
31 July 2021
16,822
21,413
17,823
621
356
–
57,035
–
–
–
–
–
22,668
22,668
(9,066)
(7,756)
–
–
–
–
–
–
–
–
–
–
(9,066)
(7,756)
–
21,413
17,823
621
356
22,668
62,881
Exercise
price/market
price at date of
award (p)
Date of grant/
award
Exercisable/
capable of
vesting from
3,450.0
2,750.0
3,370.0
2,414.4
2,528.0
10.11.2017
10.11.2020
22.10.2018
22.10.2021
16.10.2019
16.10.2022
03.12.2018
01.02.2024
03.12.2019
01.02.2023
2,317.0
27.10.2020
27.10.2023
a.
b.
c.
d.
The performance period was 1 August 2017 – 31 July 2020. The TSR performance condition was in two parts. Half was measured by reference to the median of a group of UK housebuilders
comprising Barratt Developments PLC, The Berkeley Group plc, Bovis Homes Group PLC, Crest Nicholson Holdings plc, Persimmon plc, Redrow plc and Taylor Wimpey plc (‘Housebuilders’
Index’). If Bellway’s TSR matched that of the median of the companies in that group, 25% of the awards would vest. Full vesting would be achieved for at least a 7.5% per annum
outperformance of the median (22.5% in total). The other half was measured by reference to the companies in the FTSE 250 Index (excluding financial services companies and investment
trusts). Awards would start to vest at 25% if Bellway’s TSR matches the median of the companies in the group, increasing on a straight-line basis so that full vesting would be achieved
if Bellway’s TSR reached the upper quartile. Regardless of TSR performance, no part of an award will vest unless the Committee is satisfied that there has been an improvement in the
underlying financial performance of the Company over the performance period. The first part of the performance condition was vested at 37.8% and the second at 57.6%, so 47.7% of these
awards vested. Dividend equivalents shares were also delivered to the participants in respect of the shares vesting (J Honeyman: 1,036 shares / K Adey: 1,036 shares).
The performance period for the awards granted in October 2018 finished on 31 July 2021. Details of the vesting of these awards which will take place after this Report is published are set out
in full under the heading ‘Long-term incentives vesting in respect of performance period ended 31 July 2021’ above.
The performance period is 1 August 2019 – 31 July 2022. The awards are subject to the same TSR performance condition set out in note a above, and these awards are also subject to
clawback provisions.
On 27 October 2020, awards of performance shares under the PSP were made to Jason Honeyman and Keith Adey, equal to 140% of their respective salaries at the date of grant.
Whilst ordinarily awards of 150% of salary are granted, the Committee agreed to reduce the award to 140% of salary in light of the depressed share price at the time of grant and to avoid
any windfall gains. The face values on grant of these awards were therefore £964,594 and £560,580 respectively. The performance period is 1 August 2020 – 31 July 2023 The awards are
subject to the same TSR performance condition set out in note a above, and these awards are also subject to clawback provisions. The awards were in the form of nil cost options.
e. All of the above awards set out in notes a-d were granted for nil consideration.
f.
g.
Further details of the 2013 SRSOS are shown in the summary of outstanding share options in note 24 to the accounts.
The value of long-term incentive plans for the executive directors which were exercised in the year and those which will become exercisable in 2021/22 are shown in the single figure of
total remuneration table on page 96.
h. The market price of the ordinary shares at 31 July 2021 was 3,282p and the closing range during the year was 2,060p to 3,712p.
Payments to past directors (audited)
No past director received any payments from the Company during the year.
Payments for loss of office (audited)
No payments have been made in respect of loss of office during the 2020/21 financial year.
Statement of directors’ shareholdings and share interests (audited)
The directors’ interests (including family interests) in the ordinary share capital of the Company at 31 July 2021 are set out below:
Director
Jason Honeyman
Keith Adey
Paul Hampden Smith
Denise Jagger
Jill Caseberry
Ian McHoul
Notes:
Beneficially
owned at
31 July 2021(c)
% basic
salary held
by executive
directors in
shares(a)(b)
Shareholding
target of 200% of
basic salary met?
Beneficially
owned at
31 July 2020
Outstanding and
unvested PSP
awards
Outstanding
and unvested
share options
Share options
exercised in
the year
26,503
74,558
20,386
2,462
470
–
116
In progress
560
N/A
N/A
N/A
N/A
Yes
N/A
N/A
N/A
N/A
21,707
69,762
15,842
2,462
470
–
88,485
60,649
N/A
N/A
N/A
N/A
771
977
N/A
N/A
N/A
N/A
9,066
9,066
N/A
N/A
N/A
N/A
a.
Executive directors are required to accumulate a minimum shareholding equivalent to 200% of basic salary. Jason Honeyman joined the Board in September 2017 so has not yet had
sufficient time to build the target shareholding from vesting share awards. Jason agreed to invest all bonus he receives in FY21 above 90% of salary (after paying tax and national insurance)
in Bellway shares.
b. The % shareholding is based on salaries as at 31 July 2021 using the average share price for the year.
c.
Includes shares owned by partner.
d. There has been no change in any of the above interests between 31 July 2021 and the date of this report.
Bellway p.l.c. Annual Report and Accounts 2021
97
GovernanceGovernance Remuneration Report continued
The following section of this report is not required to be audited.
Implementation of Remuneration Policy in 2021/22
This section sets out how the Company will implement the Remuneration Policy for the 2021/22 financial year. Full details
of how each element will operate are set out in the Remuneration Policy table later in this report.
The Committee has taken into account the remuneration and related policies for the rest of the workforce generally and
engaged with the workforce through the Employee Listening Groups when setting the 2021/22 targets for the Executive
Directors.
Basic salaries
The Committee has awarded Jason Honeyman and Keith Adey salary increases in line with the average increases given to the
general workforce of around 3.2% for 2021/22. Therefore from 1 August 2021, Jason’s salary was increased to £711,048 p.a., and
Keith’s salary was increased to £413,241 p.a.
Annual bonus
For the 2021/22 financial year, the bonus opportunity will continue to be limited to 120% of basic salary. The performance
conditions relate to a stretching target of underlying operating profit (with a maximum payment of 80% of basic salary
achievable) and the following strategic performance measures which provide a maximum bonus opportunity of 40% of basic
salary.
Strategic
measure
Land bank
Customer
First
Employee
Engagement
Objectives
Increase in the land bank of plots with DPP (available for completion in the following
financial year) in the year to 31 July 2022 to ensure our growth aspirations are not
frustrated by land shortages in future years.
This will be in four parts:
• 5% of salary for retaining 5-star homebuilder3 status (as measured by the HBF).
• 5% of salary linked to 9 month post completion customer satisfaction score (as
measured by NHBC).
• 2.5% of salary linked to overall customer satisfaction score (as measured by NHBC).
• 2.5% of salary linked to employee survey quality score.
The customer satisfaction score element is assessed using the average of six key
indicators, as measured by the NHBC. This measure is used as it reflects the metrics by
which the performance of each division is managed by the Executive Directors.
Targets relating to the annual employee engagement survey.
Score
Maximum –
20% of salary
Maximum –
15% of salary
Maximum –
5% of salary
In the event that the threshold profit criterion is not met, no bonus will be payable under the strategic targets. Health and safety
performance will be taken into account as part of the Committee’s overall assessment of the bonus payment.
The Committee would have discretion if, for example, health and safety standards have been unsatisfactory, or there has been
a major safety failure, to reduce the overall bonus payment and could, in exceptional cases, reduce the overall bonus payment
to nil. Maintaining a strong health and safety record remains a critical objective and this bonus structure allows for health and
safety to have a greater influence on annual bonus outcomes.
The actual annual bonus performance targets are considered to be commercially sensitive at this time, and the Committee will
disclose these retrospectively in next year’s annual report on remuneration, provided they are no longer commercially sensitive.
Long-term incentives
The Company anticipates making a grant under the PSP in October 2021 with a face value equivalent up to 150% of salary to
the Executive Directors. Awards will vest to the executive directors after three years, subject to the achievement of performance
conditions based around adjusted Earnings Per Share (EPS) and TSR over three years. TSR measures the total return on a
notional investment in Bellway shares, compared to the return on the same notional investment in shares in a group of other
companies or an index. One third of the award will be subject to achieving a level of EPS in 2023/24. In setting the EPS targets
the Committee considered analysts consensus figures, internal forecasts and the impacts expected from the new anticipated
Residential Property Developer Tax (RPDT) from April 2022, increase in corporation tax rate from April 2023 and the end of
Help-to-Buy. The remainder of this award will be subject to a relative TSR condition with one third of awards measured against
a group of housebuilders and one third against the constituents of the FTSE 350 (excluding financial services companies and
investment trusts). Regardless of the vesting outcome the Committee may adjust the level of vesting (including to nil) to such
extent as it considers appropriate to ensure the level of vesting is a true reflection of the overall performance of the Company
over the performance period.
Bellway p.l.c. Annual Report and Accounts 2021
98
Governance Metric
Performance condition
1/3 of
awards
1/3 of
awards
Underlying EPS in 2023/24. (Calculated using underlying profit and, due to the current
uncertainty over the timing of its introduction and rate, pre RDPT)
Relative TSR against a group of peer housebuilders comprising Barratt Developments
PLC, The Berkeley Group plc, Crest Nicholson Holdings plc, McCarthy & Stone plc,
Persimmon plc, Redrow plc, Taylor Wimpey plc and Vistry Group PLC (previously called
Bovis Homes Group PLC): 25% of this part of an award vests at the median, increasing
pro-rata, to full vesting at median +7.5% p.a.
Threshold target
Stretch target
383p
436p
Median
Median
+7.5% p.a.
1/3 of
awards
Relative TSR against the FTSE 350 (excluding financial services companies and
investment trusts): 25% of this part of an award vests at median, increasing pro-rata, to
full vesting at the upper quartile.
Median
Upper
quartile
Chairman and Non-Executive Director fees from 1 August 2021
Director
Non-executive Chairman fee
Non-executive director fee
Senior independent Non-Executive Director, Audit and Remuneration Committee
Chair fees
Fee from
1 August 2020
£
%
increase
Fee from
1 August 2021
£
221,340
58,200
11,350
3.2%
3.2%
3.2%
228,423
60,063
11,713
The Company’s Articles of Association specify an annual limit on non-executive director fees of £500,000. This excludes the
fees for the Chairman and additional fees payable to the Senior Independent Non-Executive Director and to Committee Chairs.
Shareholder approval is required to amend this limit.
Performance graph and table
The graph below shows the TSR performance over the past ten years of the Company, the FTSE 250 Index and the bespoke
Housebuilders’ Index (as defined in note a on page 97). The FTSE 250 Index has been selected as the most appropriate
‘broad equity market index’ as the Company has been a constituent of the FTSE 250 Index over this period. The bespoke
Housebuilders’ Index has been selected as these companies have been used for the Company’s long-term incentive plans.
This graph shows the value, at 31 July 2021, of £100 invested in Bellway on 31 July 2011 compared with the value of £100 invested
in the FTSE 250 Index and £100 invested equally in each of the other housebuilders, who form part of the Housebuilders Index.
The other points plotted are the values at intervening financial year ends.
Total shareholder return
800
700
600
500
400
300
200
100
)
d
e
s
a
b
e
r
(
£
n
r
u
t
e
r
r
e
d
l
o
h
e
r
a
h
s
l
a
t
o
T
0
31 July
2011
468
403
378
362
177
176
575575
559
548
547
587
571
206
223
212
518
504
180
762
686
257
254
218
140
271
245
150
124124
119
100
31 July
2012
31 July
2013
31 July
2014
31 July
2015
31 July
2016
31 July
2017
31 July
2018
31 July
2019
31 July
2020
31 July
2021
Source: Datastream (Refinitiv Datastream)
Bellway
Housebuilder’s Index
FTSE 250 Index
Bellway p.l.c. Annual Report and Accounts 2021
99
GovernanceGovernance
Remuneration Report continued
Group Chief Executive total remuneration
The table below sets out the total remuneration for the Group Chief Executive over the same ten-year period as for the chart
overleaf, together with the percentage of annual bonus paid and the vesting of long-term incentives as a percentage of the
maximum (relating to the performance periods ending in that year).
2012
1,396
2013
1,243(a)
2014
1,450
2015
1,960
2016
2,785
2017
3,468
2018(c)
1,737
2019(d)
1,220
2020
1,110(b)
2021(e)
2,021
99.3%
100.0%
91.6%
88.8%
95.8%
93.8%
0.0%
76.7%
0.0%
99.5%
0.0%
0.0%
50.0%
50.0%
100.0%
100.0%
99.8%
30.6%
47.7%
28.7%
Total remuneration
(£000)
Annual bonus paid
(as % of maximum)
PSP vesting (as a %
of maximum)
Notes:
a.
John Watson held the role of Group Chief Executive up until 31 January 2013 and Ted Ayres was Group Chief Executive for the remainder of the financial year from 1 February 2013 to
31 July 2013. The total remuneration for the period as Group Chief Executive was £714,053 for John Watson and £528,500 for Ted Ayres.
b. Restated as per footnote d to the table on page 96.
c. Ted Ayres was absent during the 2017/18 financial year due to ill health and so the figures shown are lower than would normally be expected if he had been at work during the year.
d. Jason Honeyman was appointed as Group Chief Executive on 1 August 2018.
e.
The value of long-term incentives in 2021 reflects the vesting of the November 2018 PSP awards, which will be exercisable in 2021/22, including additional shares in lieu of dividends
accrued from the date of grant to the date of vesting. The value shown is based on a share price of £34.29, being the average share price for the last quarter of the financial year i.e. 1 May –
31 July 2021 as a proxy for the shares at vesting.
Percentage change in remuneration of directors compared to workforce
The table below shows the percentage change in base salary, benefits and bonus between FY20 and FY21 in respect of the
Directors of the Company and the average for all other employees. Over time, the percentage change over five years will
eventually be disclosed.
All other employees
J Honeyman (Group Chief Executive)(b)
K Adey (Group Finance Director)
P Hampden Smith (Chair)
D Jagger (INED)
J Caseberry (INED)
I McHoul (INED)
Notes:
% Change in
salary/ fees
FY20–FY21(a)
% Change in
benefits
FY20–FY21
% Change in
bonus
FY20–FY21(c)
% Change in
salary/ fees
FY19–FY20(a)
% Change in
benefits
FY19–FY20
% Change in
bonus
FY19–FY20(c)
Nil
+3.4
+3.4
+3.4
+3.4
+3.4
+3.4
Nil
+9.8
+0.3
n/a
n/a
n/a
n/a
+100
+100
+100
n/a
n/a
n/a
n/a
+2
+25.6
-1.4
+31.4
+2.3
-1.4
+4.4
Nil
+38.5
+2.4
n/a
n/a
n/a
n/a
-100
-100
-100
n/a
n/a
n/a
n/a
a.
The comparative figures used for the Board are the actual salary and fees paid as per the Single figure of remuneration table on page 96. This also reflects the 20% reduction in salary and
fees in April and May 2020 due to the COVID-19 pandemic. As such, whilst Directors’ salary and fee rates did not increase, the 3.4% increase between FY20 and FY21 is due to the FY20
amounts reflecting the temporary reductions agreed in light of the pandemic.
b.
Upon appointment as Group Chief Executive, the Board had agreed a salary increase for Jason Honeyman to be implemented for the financial year beginning August 2019. Details of
Jason’s benefits are included in note b page 96.
c. No bonus was paid in the 2019/20 financial year.
CEO pay ratio
We are publishing our CEO pay ratio figures for the financial years 2018/19, 2019/20 and 2020/21. Over time, ten-year ratios will
eventually be disclosed.
Financial year
Method
2018/19
2019/20
2020/21
A
A
A
Upper quartile
Median
Lower quartile
Pay
ratio
Total pay
and benefits
£
Salary
component
£
19:1
18:1
31:1
62,168
60,675
65,866
50,200
24,400
52,279
Pay
ratio
Total pay
and benefits
£
Salary
component
£
Pay
ratio
Total pay
and benefits
£
Salary
component
£
28:1
27:1
45:1
42,845
40,415
44,864
22,647
22,000
40,556
40:1
43:1
68:1
29,858
25,580
29,886
23,305
25,200
24,750
The pay ratios have been calculated as at 31 July 2021 using Option A of the Regulations, that is, the full-time equivalent pay
and benefits for all of our employees to identify those employees on the quartiles. Option A has been selected as it is the most
statistically accurate method of calculation. Employee benefits include company car, car allowance, private medical, employer
pension contributions and share option gains. All payments are included on a cash basis, with the exception of the annual
bonus. The annual bonus earned during the 2020/21 financial year, which is expected to be paid in November 2021, has been
approved for the Group Chief Executive, whilst management’s best estimate for all other staff has been used in the calculations.
The increase in the CEO pay ratio in the current year is driven by the bonus opportunity for the Group Chief Executive being
greater than that of the wider workforce, coupled with LTIP opportunities that are not offered to the wider workforce.
Bellway p.l.c. Annual Report and Accounts 2021
100
Governance Jason Honeyman was appointed as Group Chief Executive on 1 August 2018, with a phased increase to his salary implemented
in the 2019/20 financial year, this resulted in a lower CEO pay ratio in 2018/19.
Importance of remuneration relative to dividends and section 106 and CIL payments
The table below shows the relative expenditure of the Group in respect of employee remuneration, dividends and section 106
and CIL payments, together with the percentage change in each, for the financial years ended 31 July 2020 and 31 July 2021.
The directors have chosen dividends and section 106 and CIL payments as comparators to employee costs as they consider
that these demonstrate the relative importance of the remuneration of its employees to the returns the Group generates to
shareholders and the contribution it makes to developing communities through section 106 and CIL payments.
Employee costs(a)
Dividends(b)
Section 106 and CIL payments(c)
Notes:
2021
£m
159.9
144.8
71.3
2020
£m
155.2
61.7
60.5
% charge
3.0
134.7
17.9
a. Employee costs are calculated as wages and salaries, bonus and taxable benefits (including the directors).
b. The dividend figures shown are the interim and final dividends paid or payable for the relevant financial year less forfeited dividends (see note 21 to the accounts).
c. The section 106 and CIL payments figures are calculated from invoices received for these payments.
Dilution limits/shares held in Trust to satisfy awards
The Bellway Employee Share Trust (1992) (the ‘Trust’) holds market-purchased shares to satisfy awards made under some of the
Company’s executive and employee share schemes. At 31 July 2021 the Trust held 101,853 shares. It is the Company’s current
intention to use new issue shares to satisfy awards made under the PSP. Awards made under the deferred bonus plans (to
which the executive directors are not eligible) must be satisfied using market-purchased shares. The SRSOS uses new issued
shares. The Company’s share plans comply with the IA guidance on dilution limits and the position as at 31 July 2021 was:
Limit of 5% in any ten years under all executive share plans
Limit of 10% in any ten years under all share plans
Actual 0.35%
Actual 1.56%
Statement of voting at AGMs
The votes cast by proxy at AGMs in relation to resolutions regarding directors’ remuneration are set out in the table below:
For
Against
Total votes cast (excluding votes withheld)
Directors’ Remuneration Policy
(binding vote at AGM on
11 December 2020)
Remuneration Report
(advisory vote at AGM on
11 December 2020)
Number
of votes
% of
votes cast
Number
of votes
% of
votes cast
93,065,733
4,188,306
95.69
97,042,919
4.31
517,629
99.47
0.53
97,254,039
100.000
97,560,548
100.000
Votes withheld
1,395,314
1,088,805
At the AGM on 6 December 2021, the Company’s shareholders will have an advisory vote on the Remuneration Report and a
binding vote on the Directors’ Remuneration Policy. I hope you are supportive of the approach we have taken and understand
the rationale for the decisions we have taken.
On behalf of the Board
Jill Caseberry
Chair of the Remuneration Committee
18 October 2021
Bellway p.l.c. Annual Report and Accounts 2021
101
GovernanceGovernance Remuneration Report continued
Directors’ Remuneration Policy
This part of the remuneration report, the Directors’ Remuneration Policy, has been prepared in accordance with The Large and
Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.
The overall remuneration policy has been developed in compliance with the principles of the 2018 UK Corporate Governance
Code, UK institutional investor guidance and the Listing Rules.
The remuneration policy set out on the following pages is submitted to shareholders for approval at the AGM on 6 December
2021. It is the Company’s current intention that this Policy will apply for 3 years.
Summary of changes
Summary of changes
Annual Bonus
The new policy will introduce deferral of bonus into shares for 3 years for the amount of bonus that
exceeds 100% of salary.
Shareholding guidelines We will introduce post-cessation shareholding requirements for executive directors to retain their in-
employment guideline of 200% of salary for 2 years post departure.
Long-term incentives
To provide flexibility for future years we propose to increase the limit of long-term incentive
opportunity under the Policy to 200% of salary. This increase will not apply for the year ahead and we
will consult with leading shareholders before any increase takes effect.
Policy principles
The Directors’ Remuneration Policy is aligned with the principles within the 2018 UK Corporate Governance Code and these
principles are taken into account in its implementation:
Principles
Considerations within the Policy
Clarity: remuneration arrangements should be
transparent and promote effective engagement
with shareholders and the workforce.
We clearly communicate our approach to remuneration in this report and
in all communications with shareholders whilst providing transparency
in our rationale. This also allows straightforward engagement with the
wider workforce.
Simplicity: remuneration structures should avoid
complexity and their rationale and operation
should be easy to understand.
Risk: remuneration arrangements should ensure
reputational and other risks from excessive
rewards, and behavioural risks that can arise
from target-based incentive plans, are identified
and mitigated.
We have structured the Remuneration Policy to be as simple as possible, within
the confines of ensuring arrangements are in line with the business strategy,
have a robust link between pay and performance and are designed with
consideration of investor expectations.
We mitigate against these risks through a carefully designed policy which
includes a balance between financial and non-financial bonus metrics, a
Performance Share Plan which is based on long-term performance, deferral
of a portion of the annual bonus into shares, and shareholding requirements.
The Committee also has the ability to apply discretion and clawback provisions
if incentive payment levels are inappropriate.
Predictability: the range of possible values of
rewards to individual directors and any other
limits or discretions should be identified and
explained at the time of approving the policy.
We carefully consider the range of likely performance outcomes for
incentive plans when setting performance target ranges and at the time of
assessment would use discretion where necessary if the formulaic result is
considered inappropriate.
Proportionality: the link between individual
awards, the delivery of strategy and the long-
term performance of the Company should
be clear. Outcomes should not reward
poor performance.
The opportunity under incentive plans is determined based on a proportion of
salary with the quantum determined to ensure that there is an appropriate link
between pay and performance.
The performance conditions applying to the incentives are aligned with the
Company’s strategy and are reviewed on an annual basis to consider whether
they are working effectively.
There are provisions to override the formula-driven outcome of incentive
plans and clawback provisions to ensure that there is not reward for
poor performance.
Alignment to culture: incentive schemes
should drive behaviours consistent with
Company purpose, values and strategy.
The annual bonus is based on both financial and non-financial metrics
aligned with the strategy incentivising the profitability of the Company whilst
maintaining a focus on our customers and the quality of our service.
Bellway p.l.c. Annual Report and Accounts 2021
102
Governance Objectives of Remuneration Policy
The aim of the Committee is to ensure that the Company has competitive remuneration packages in place that will promote
the long-term success of the Company and motivate executive directors in the overall interests of shareholders, the Group, its
employees and its customers.
The Committee has a policy of paying a level of remuneration comparable with that at a peer group of similar UK housebuilding
businesses, subject to experience and performance.
The Committee uses this comparative approach to benchmarking with caution, recognising the relatively few direct
housebuilding comparators, their differing size and the risk of an upward ratchet effect with any peer-based analysis. The
structure of the package has been designed to ensure that the performance-related elements of remuneration (annual bonus
and long-term incentives) constitute a significant proportion of an executive’s potential total remuneration package, but are only
receivable if stretching performance targets are achieved.
The structure of the performance conditions for annual bonus and long-term incentives has been designed to provide a
strong link to the Group’s performance, namely a focus on maximising profit in a sustainable fashion and producing superior
shareholder returns, thereby generating a strong alignment of interest between senior executives and shareholders. The two-
year post-vesting holding period which applies to the long-term incentive plan (which also applies to good leavers) reinforces
that alignment.
Decision-making process
The Committee is responsible for the determination of the Directors’ Remuneration Policy and how it is implemented. In
addressing this responsibility the Committee works with management and external advisers to develop proposals and
recommendations. The Committee considers the source of information presented to it, analyses the detail and ensures that
independent judgement is exercised when making decisions. Information is independently verified where there are conflicts of
interest and no individual is present when their remuneration is being discussed.
Consideration of employment conditions elsewhere in the Group
We have commenced using our Employee Listening Groups to provide an opportunity to engage with the workforce on
executive remuneration and for employees to raise issues which are reported to the Board. This is one of the UK Corporate
Governance Code’s requirements. In determining the elements of remuneration for the Executive Directors, the Committee
takes into consideration the pay and conditions of employees throughout the Group as a whole, paying particular attention to
the levels of basic pay increase awarded to the workforce generally.
All eligible employees, including the Executive Directors, can join the Group’s savings-related share option scheme, have
life assurance benefits and have access to pension arrangements. A significant proportion of employees benefit from health
insurance, a company car or car allowance and are eligible to participate in a discretionary bonus scheme.
The Committee is regularly updated of any significant policy changes for the workforce generally and management below
Board level in particular.
Clawback/malus
The time period over which clawback/malus will apply to bonuses in respect of bonus years commencing and PSP awards
granted after 1 August 2018 is at any time before the third anniversary of payment of bonus or vesting of PSP award, as relevant.
Incentive plan discretions
The Committee will operate the annual bonus plan and PSP in accordance with their respective rules. As part of the rules the
Committee holds certain discretions which are required for both an efficient operation and administration of these plans, and
are consistent with standard market practice. Any use of the discretions would, where relevant, be explained in the Annual
Report on Remuneration and may, as appropriate, be the subject of consultation with the Company’s major shareholders.
Choice of performance measures and approaches to target-setting
The performance measures used in the annual bonus and long-term incentive plan are aligned with the Company’s KPIs and
the business strategy.
For the annual bonus, underlying operating profit is an appropriate barometer of short-term performance as management will
neither benefit from, or be penalised by, one-off or short-term impacts on the Group’s profit, it also acts as an incentive for the
sustainable development of the business. Customer care and land bank are important drivers of future growth and employee
metrics and maintaining a strong health and safety record is very important to our employee base and the Group.
The Committee believes that relative TSR is an appropriate long-term performance metric as it generates an alignment of
interest between executives and institutional shareholders by providing a reward mechanism for delivering superior stock
market performance. The TSR performance is independently calculated for the Committee. Other performance metrics will be
introduced if they align with the Company’s strategy including for 2021/22 Earnings Per Share, which is an important measure of
the Company’s profitability to pay dividends to shareholders.
Targets for incentive plans are set to be stretching but achievable, taking into account internal and external reference points,
including internal forecasts and market consensus.
Bellway p.l.c. Annual Report and Accounts 2021
103
GovernanceGovernance Remuneration Report continued
Policy table
This section of the report describes the key components of each element of the remuneration arrangements for executive and
non-executive directors.
Component and
link to strategy
Salary
To be market
competitive and
therefore assist
in recruiting,
retaining and
motivating high-
quality executives.
Reflects individual
role and
experience
Operation
Maximum opportunity
Framework to assess performance
In addition to the reviews by
the Chairman, as part of the
annual Board evaluation, the
performance of the executives
and the Company is kept
under continuous review
by the Board.
Salaries are normally reviewed in July
each year and changes normally take
effect from 1 August. They are typically
determined by reference to market
levels of a peer group of similar UK
housebuilding businesses, taking
account of salaries at other companies
of a similar size, and by taking
account of the role, performance, and
experience of the individual, Company
performance, salary increases
throughout the rest of the business and
economic conditions.
Where salaries of new executive
directors are positioned below market
levels, the Committee’s policy is to
progress these over time, with increases
potentially higher than for the general
workforce, as experience is gained,
subject to performance.
No prescribed maximum.
Increases are normally in
line with the average for the
workforce generally.
Increases may be below
or above this e.g. due to
promotion, change in
responsibility or experience,
role change or a significant
change in the size, value and/
or complexity of the Company.
Salaries are set out in
the Annual Report on
Remuneration.
Pension
To provide a
structure and value
that is market
competitive
Pension contributions into the
Company’s Group Self Invested
Personal Pension Plan and/or a
salary supplement in lieu of pension
contributions.
Up to 20% of salary.
Not applicable.
The rate for current Directors
will be aligned with that of the
workforce at the end of 2022.
Benefits
To provide a range
and value that is
market competitive
Typically comprises car or car
allowance, life assurance and health
insurance. Other benefits may be
provided where appropriate.
Any expenses incurred in carrying
out duties will be fully reimbursed by
the Company including any personal
taxation associated with such expenses.
Not applicable.
Not applicable.
Bellway p.l.c. Annual Report and Accounts 2021
104
Governance Component and
link to strategy
Annual bonus
To reward
achievement with
a combination
of financial and
non-financial
operational-based
performance
targets in
accordance with
Group KPIs.
Operation
Maximum opportunity
Framework to assess performance
Annual bonuses are normally payable
in cash in November following the
year end on 31 July, subject to the
achievement of performance targets
that were set at the start of the
financial year.
The Company operates a recovery
mechanism which allows the
Company to clawback some or all
of the payments made under the
variable components of an individual’s
remuneration, in the following
circumstances:
(i) material misstatement of results;
(ii) error in assessing a
performance condition;
(iii) gross misconduct by the individual;
(iv) in the case of corporate failure; or
(v) in the case of material
reputational damage.
Any bonus over 100% of base salary will
be deferred into shares which will have
to be held for three years.
120% of basic salary maximum. The bonus may be based on
a combination of financial
and strategic objectives,
with financial performance
accounting for a majority of the
overall bonus opportunity.
The Committee determines
the choice of measure(s) and
their weighting for each year
to ensure alignment with the
Board’s priorities and Company
strategy over the short to
medium-term.
The level of pay-out at
threshold for financial metrics
will not be more than 40% of
maximum, and varies for non-
financial metrics.
Full vesting will take place
for equalling or exceeding
maximum, subject to the health
and safety underpin.
The Committee has discretion
to adjust the payment outcome
to ensure it reflects the
individual’s contribution and/
or the overall performance
of the Company over the
performance period.
Details of the performance
measures used are set out
in the Annual Report on
Remuneration.
Bellway p.l.c. Annual Report and Accounts 2021
105
GovernanceGovernance Remuneration Report continued
Component and
link to strategy
Operation
Share ownership guideline for executive directors
Maximum opportunity
Framework to assess performance
Not applicable.
Not applicable.
To align executive
directors’ interests
with those of
shareholders.
Executive directors are required to
accumulate a minimum shareholding
equivalent to 200% of basic salary.
Within a period of three months of
appointment an executive director must
acquire a minimum of 1,000 ordinary
shares in the Company and must retain
at least 50% of any shares awarded
under the PSP, after allowance for
paying tax, until the requisite number of
shares has been accumulated.
If personal circumstances make
this difficult, the Committee would
exercise discretion.
Long-term incentives (‘PSP’)
To encourage
long-term
value creation,
aid retention,
encourage
shareholding and
promote alignment
of interests with
shareholders.
The Company operates a PSP as its
primary long-term incentive.
200% of basic salary.
Annual awards of nil-cost options or
conditional awards may be made under
the PSP to the executive directors, at the
discretion of the Committee.
Awards normally vest three years after
grant, subject to the achievement of
stretching performance targets.
Dividend equivalents (in cash or shares)
may be payable, and will only accrue
during the vesting and holding period
on awards that ultimately vest.
The Company operates recovery
and withholding mechanisms which
allow the Company, in exceptional
circumstances, to clawback some or
all of the payments made, or recover
unvested awards, in the following
circumstances:
(i) material misstatement of results;
(ii) error in assessing a
performance condition;
(iii) gross misconduct by the individual;
(iv) in the case of corporate failure; or
(v) in the case of material
reputational damage.
A minimum holding period of two years
applies to awards post vesting.
PSP awards are subject to
stretching three-year targets.
No more than 25% of a part of
an award will vest at threshold
with full vesting taking place
for equalling or exceeding
maximum targets set.
Awards to be granted in
2021/22 will be subject to
relative TSR and EPS targets. For
future awards the Committee
may choose another measure,
such as, RoCE, NAV, or ESG
measures in conjunction with
or as an alternative to TSR and
EPS, depending on the medium
to long-term priorities of the
Group at the time of grant.
The Committee has discretion
to adjust the vesting outcome
in exceptional circumstances
to ensure it is a true reflection
of the overall performance
of the Company over the
performance period.
Further details of the
performance metrics
applying to the awards are
set out in the Annual Report
on Remuneration.
Bellway p.l.c. Annual Report and Accounts 2021
106
Governance Component and
link to strategy
Operation
All-employee share schemes
Maximum opportunity
Framework to assess performance
To encourage
employees to
build a stake
in the future of
the Company.
The executive directors can participate
in any HMRC-approved all-employee
plans operated by the Company.
Subject to prevailing
HMRC limits.
Not applicable.
Chairman and non-executive directors
The aggregate of NED fees
is set out in the Articles of
Association and is currently
£429,990 p.a.
The performance of the
non-executive directors is
assessed by the Chairman.
The senior independent non-
executive director reviews the
performance of the Chairman in
conjunction with the directors.
To set appropriate
fees in light of the
time commitment,
responsibilities,
wider market and
best practice.
The Chairman’s fee is determined by
the Remuneration Committee.
The remuneration of the non-executive
directors is determined by the Board
Committee on Non-Executive Directors’
Remuneration, which comprises the
executive directors.
Fee levels are normally reviewed
annually, taking into account the time
commitment and responsibilities of
the roles including membership or
chairmanship of Board committees and
the level of fees for similar positions in
comparable companies.
Non-executive directors are not
normally entitled to any taxable benefits
or pension. They do not participate
in any bonus or long-term incentive
plans and they are not entitled to
compensation on termination of their
arrangements, other than normal notice
provisions of three months given by
either party.
Travel, accommodation and other
related expenses incurred in carrying
out the role will be paid by the
Company including any personal
taxation associated with such expenses.
For the avoidance of doubt, under this Directors’ Remuneration Policy, authority is given to the Company to honour any
commitments entered into with current or former directors that is consistent with the approved remuneration policy in force at
the time the commitment was made (or, if made before the current policy was approved, as have been disclosed previously
to shareholders), or was made at the time when the relevant individual was not a director of the Company. Details of any
payments made to former directors will be set out in the Annual Report on Remuneration as they arise.
Bellway p.l.c. Annual Report and Accounts 2021
107
GovernanceGovernance Remuneration Report continued
Approach to recruitment remuneration
In arriving at a total package and in considering the quantum for each element of the package, the Committee will take into
account the skills and experience of the candidate and the market rate for a candidate of that experience, as well as the
importance of securing the preferred candidate.
Element
Salary
General policy
Detail
At a level required to attract the
most appropriate candidate.
Pension and benefits
In accordance with
Company policies.
Bonus
In accordance with
existing schemes.
Long-term
incentives (PSP)
In accordance with Company
policies and maximum limits in
the PSP rules.
Buyout of forfeited
remuneration
The Committee may make
an award in cash or shares to
replace deferred or incentive
pay forfeited by an executive
leaving a previous employer
(and, if required, by relying on
the flexibility provided in the
Listing Rules to grant such
replacement awards).
Discretion to pay lower basic salary with incremental increases,
potentially higher than for the general workforce, as new appointee
becomes established in the role.
Additional benefits in relation to recruitment may be provided
where considered appropriate, for example, relocation expenses
or allowances, legal fees and other recruitment-related costs may
be payable.
Any new director’s pension contributions will be in line with the
wider workforce. The current employer pension contribution rate is
between 5% and 10% of salary.
Depending on the timing of recruitment, bespoke targets could be
introduced for an individual within the maximum individual limits of
the annual bonus plan applicable at the time.
Pro-rating would be applied as appropriate for intra-year joiners.
An award may be made in the year of joining or, alternatively,
the award can be delayed until the following year.
Targets would normally be the same as for other directors and
grant levels consistent within the permitted individual maximum
under the rules of the plan and this policy.
Awards would, where possible, be consistent with the awards
forfeited in terms of the vehicle, structure, vesting periods, expected
value and performance conditions.
Service contracts and loss of office payment policy
The details of the executive directors’ service contracts are as follows:
Executive director
Jason Honeyman
Keith Adey
First appointed as a
director
Current contract
commencement date
1 September 2017
1 August 2018
1 February 2012
1 February 2012
Notice period
from employer
6 months
12 months
Notice period
from executive
6 months
6 months
Our policy is that notice periods for Executive Directors should be no longer than 12 months.
The Executive Directors may accept external appointments provided that such appointments do not, in any way, prejudice their
ability to perform their duties as Executive Directors of the Company. The extent to which any Executive Director is allowed to
retain any fees payable in respect of such appointments, or whether such fees are remitted to the Company, will be assessed on
a case-by-case basis. Neither of the Executive Directors currently holds any outside appointments.
Our policy is that notice periods for non-executive directors should be no longer than three months, save in the case of the
Chairman whose notice period may extend to six months.
Currently, all non-executive directors have letters of appointment with the Company for no more than three years, subject to
annual reappointment at the AGM, with a three-month notice period by either side. The appointment letters for the Chairman
and non-executive directors provide that no compensation is payable on termination, other than fees accrued and expenses.
Bellway p.l.c. Annual Report and Accounts 2021
108
Governance Non-executive director
Paul Hampden Smith
Denise Jagger
Jill Caseberry
Ian McHoul
First appointed as
a director
Current letter
of appointment
commencement date
Current letter of
appointment
end date
1 August 2013
12 December 2018
12 December 2021
1 August 2013
1 August 2019
31 July 2022
1 October 2017
1 October 2017 30 September 2023
1 February 2018
1 February 2021
31 January 2024
The overriding principle for payments on loss of office will be to honour contractual remuneration entitlements. The Committee
would determine, on an equitable basis, the appropriate treatment of performance-linked elements of the package, taking
account of the circumstances, in accordance with the rules of each respective plan. Failure will not be rewarded.
The Company may pay statutory claims. Reasonable costs of legal expenses incurred by the director may be reimbursed by the
Company by making direct payment to the professional adviser.
Element
Bad leaver(a)
Departure on agreed terms(b)
Good leaver(c)
Nil.
Salary, pension
and benefits
(after cessation of
employment)
Up to 12 months’ basic salary, benefits
and pension.
Payments may be phased and
subject to offsetting against alternative
income from elsewhere during the
notice period.
Apart from death, the Company may pay
up to 12 months’ basic salary, benefits and
pension, less any period of notice worked.
Payments may be phased and subject to
offsetting against alternative income from
elsewhere during the notice period.
Annual bonus
No bonus payable.
PSP (and SMP
awards granted in
2014 or before)
All awards, including
those which have
vested but are
unexercised will
lapse immediately
upon cessation of
employment.
Other payments
Nil.
The Company may pay in lieu
of notice an amount equivalent
to 12 months’ salary, pension
and benefits.
For the proportion of the financial
year worked, bonus may be payable
pro-rata, subject to performance,
at the discretion of the Committee.
There will be no bonus payment
in respect of any period of notice
not worked.
Awards will lapse upon cessation of
employment, unless the Committee
decides otherwise, in which case
awards may vest.
Where employment ends before the
vesting date, awards may vest at the
normal time (other than by exception)
to the extent that the performance
conditions have been satisfied.
The level of vested award will be
reduced, pro-rata, based upon
the period of time after the grant
date and ending on the date of
cessation of employment, relative to
the three-year performance period
unless the Committee, acting fairly
and reasonably, decides that such a
scaling back is inappropriate in any
particular case.
Depending upon circumstances, the
Committee may consider payments
in respect of an unfair dismissal
award, outplacement support and
assistance with legal fees.
The Company may pay in lieu of notice
an amount equivalent to 12 months’ salary,
pension and benefits.
For the proportion of the financial year
worked, bonus may be payable pro-rata,
subject to performance, at the discretion of
the Committee.
Awards may be exercised within 12 months
of the vesting date.
Where employment ends before the
vesting date, awards may be exercised
at the normal vesting time (other than by
exception) and only to the extent that the
performance conditions have been satisfied.
The level of vested award will be reduced,
pro-rata, based upon the period of time
after the grant date and ending on the date
of cessation of employment, relative to the
three-year performance period unless the
Committee, acting fairly and reasonably,
decides that such a scaling back is
inappropriate in any particular case.
The Company may pay for outplacement
support and assistance with legal fees.
Notes:
a. For example, normal resignation from the Company or termination for cause (e.g. disciplinary issues).
b.
This may cover a range of circumstances such as business reorganisation, changes in reporting structure, change in requirements for the role, termination as a result of a failure to be
re-elected at an AGM, etc.
c. Leaver for compassionate reasons such as death, injury, disability or retirement, with the agreement of the employer.
Bellway p.l.c. Annual Report and Accounts 2021
109
GovernanceGovernance Remuneration Report continued
Illustrations of the application of current Remuneration Policy
The remuneration policy results in a significant portion of remuneration received by Executive Directors being dependent on
the Group’s performance. The chart below illustrates how the total pay opportunities for the executive directors vary under three
performance scenarios: minimum, target and maximum. The chart is indicative, as share price movement and dividend accrual
have been excluded unless otherwise noted.
Chief Executive
Group Finance Director
3,500
3,000
2,500
2,000
1,500
0
0
0
£
1,000
£903k
£903k
£2,822k
£3,355k
48%
38%
£1,862k
29%
23%
30%
25%
100%
48%
32%
27%
500
0
0
0
0
£
3,500
3,000
2,500
2,000
1,500
1,000
500
0
£1,645k
£1,995k
48%
£1,087k
38%
28%
23%
£529k
30%
25%
100%
49%
32%
27%
Minimum
Target
Maximum
Maximum
with share
price growth
Minimum
Target
Maximum
Maximum
with share
price growth
Fixed pay
Annual bonus
Long-term share awards
Notes:
a. Chart labels show proportion of total package comprised of each element.
b. Assumptions:
• Minimum: fixed pay only (salary + benefits + pension/pay in lieu of pension). Salary is based on actual for 2021/22, benefits are based on the value of actual benefits received in 2020/21
and pension/pay in lieu of pension is based on policy of 20% of salary applicable in 2021/22.
• Target: fixed pay plus 50% of maximum bonus payment plus PSP award of 150% of salary with 50% of the award vesting.
• Maximum: fixed pay plus 100% of maximum bonus payment plus PSP award of 150% of salary with 100% of the award vesting.
• Maximum with share price increase: the Maximum scenario with the impact of a 50% increase in share price on the PSP illustrated.
Bellway p.l.c. Annual Report and Accounts 2021
110
Governance Directors’ Report
The Directors have
proposed a final ordinary
dividend for the year
ended 31 July 2021 of
82.5p per share.
Simon Scougall
Group General Counsel and Company Secretary
The Directors of Bellway p.l.c. present their report in
accordance with section 415 of the Companies Act 2006.
Bellway p.l.c. is the holding company of the Bellway group of
companies and is a UK publicly listed company whose shares
are traded on the London Stock Exchange. The main trading
company is Bellway Homes Limited and this and all other
subsidiaries and joint arrangements of the Group are listed in
note 27 to the accounts.
The following table sets out where information can be
found which is required to be reported on in the Directors’
Report, but has been included elsewhere in the Annual
Report and Accounts, and is simply cross-referenced here to
avoid repetition.
Topic
Directors
Page number
70 to 71
Appointment and replacement
of directors
76 and in the Articles
Directors’ interests
97
Future developments
41 of the Strategic Report
Group undertakings
Environmental issues
156
59 to 61 of the
Strategic Report
s172 statement/reporting
20 of the Strategic Report
Greenhouse gas emissions
61 of the Strategic Report
Whistleblowing
88
Financial risk management
53 of the Strategic Report
Going concern
54 of the Strategic Report
Results and dividends
The profit for the year attributable to equity holders of
the parent company amounts to £390.7 million (2020 –
£192.9 million).
The Directors have proposed a final ordinary dividend for
the year ended 31 July 2021 of 82.5p per share (2020 – 50.0p).
This has not been included within creditors as it was not
approved by shareholders before the end of the financial
year. The Directors recommend payment of the final dividend
on Wednesday 12 January 2022 to shareholders on the
Register of Members at the close of business on Friday
3 December 2021.
Dividends paid during the year comprise the final dividend
of 50.0p per share in respect of the year ended 31 July 2020,
together with an interim dividend in respect of the year
ended 31 July 2021 of 35.0p per share.
Bellway p.l.c. Annual Report and Accounts 2021
111
GovernanceGovernance Directors’ Report continued
Directors’ indemnities and Directors’ and officers’
liability insurance
The Company carries appropriate insurance cover in respect
of possible legal action being taken against its directors,
officers and senior employees. The Articles provide the
directors and officers with further protection against liability
to third parties, subject to the conditions set out in the
Companies Act 2006. Such qualifying third-party indemnity
provision remains in force as at the date of this report.
Restrictions on the transfer of shares
The restrictions on the transfer of shares are set out in the
Articles. In compliance with the Company’s Share Dealing
Code, Company approval is required for Directors, certain
employees and those persons closely associated with them
to deal in the Company’s ordinary shares. No person has
special rights of control over the Company’s share capital.
There has been no amendments to these procedures during
the year.
Major interests in shares
As at 31 July 2021 and as at the date of this report, the
Company had been notified under DTR 5 of the following
interests, amounting to 3% or more of the voting rights in the
issued ordinary share capital of the Company:
Rights in relation to the shares held in the
employee benefit trust
The voting rights on shares held in the Bellway Employee
Share Trust (1992) in relation to the Company’s employee
share schemes are exercisable by the trustees.
As at 31 July 2021
As at 18 October 2021
Number of
shares with
voting rights
% total
voting
rights
Number of
shares with
voting rights
% total
voting
rights
6,148,373
4.99
6,148,373
4.99
Restrictions on voting rights
Details of the deadlines for exercising voting rights are set out
in the Articles. The Directors are not aware of any agreements
between shareholders that may result in restrictions on the
transfer of securities or on voting rights.
Dimensional Fund
Advisors LP
Polaris Capital
Management, LLC
Credit Suisse
Securities (Europe) Ltd
4,979,520
4.04
4,913,744
3.99
3,890,282
3.38 3,890,282
3.38
Post balance sheet events
There were no post balance sheet events.
Information on those third parties with which the
Company has contracts or arrangements essential
to its business
The Company is party to a number of debt agreements with
major clearing banks. The withdrawal of such facilities could
have a material effect on the financing of the business. There
are no other arrangements that the Group considers to be
critical to the performance of the business.
Takeovers directive and change of control
The Company is party to a number of banking agreements
that may be terminable in the event of a change of control
of the Company. On a change of control any outstanding
options and awards granted under the Group’s share
schemes would become exercisable, subject to any
performance conditions being met.
Share capital
The Company’s total issued share capital, as at 31 July 2021,
consisted of 123,396,422 ordinary shares of 12.5p each.
Further details of the issued capital of the Company can be
found in note 19 to the accounts. The rights and obligations
attaching to the ordinary shares in the Company are set out
in the Articles of Association (the ‘Articles’). Copies of the
Articles can be obtained from Companies House or by writing
to the Group General Counsel and Company Secretary at the
Company’s registered office.
Amendments to the Articles
The Company may amend its Articles by passing a
special resolution at a general meeting of its shareholders.
The Company Articles were last updated at the AGM on 11
December 2020 to allow for virtual meetings in response to
COVID-19. The Company does not intend to hold a virtual
only AGM.
Powers of the Board
The business and affairs of the Company are managed
by the Directors, who may exercise all such powers of the
Company as are, not by law or by the Articles, required to
be exercised by the Company in general meetings. Subject
to the provisions of the Articles, all powers of the Directors
are exercised at meetings of the Directors which have been
validly convened and at which a quorum is present.
Allotment of shares
During the year, 50,588 new ordinary shares were issued to
satisfy awards made under the Company’s employee share
schemes. The Directors have authority to allot shares within
limits agreed by shareholders. Details of the renewal of this
authority, including the resolutions which seek to renew this
authority, are set out in the Notice of Meeting of the AGM, to
be held on Monday 6 December 2021.
Purchase of the Company’s own shares
The Company was given authority at the AGM on 11
December 2020 to purchase its own ordinary shares. As at
the date of this report, no market purchases have been made
by the Company. This authority will expire at the end of the
forthcoming AGM. Details of the renewal of this authority
including the resolution which seeks to renew this authority
for a further year are set out in the Notice of Meeting of
the AGM.
Bellway p.l.c. Annual Report and Accounts 2021
112
Governance All new employees, when eligible, are automatically
entered into the Group’s pension arrangements. In addition,
we operate a savings-related share option scheme and
have discretionary bonus arrangements in place. We also
provide life assurance cover to all of our employees, offer a
private medical scheme (depending on seniority) and offer
childcare vouchers.
Health and safety at work
We promote all aspects of health and safety throughout our
operations in the interests of employees, subcontractors,
suppliers, customers and visitors to our sites and premises.
Health and safety issues are considered at each Board
meeting and are addressed in the Strategic Report and on
our website at www.bellwayplc.co.uk/corporate-responsibility.
The Board receives external advice and training from
specialist advisers on both the Directors’ and the Company’s
regulatory obligations.
Auditor
In accordance with section 489 of the Companies Act
2006, a resolution for the re-appointment of Ernst & Young
LLP as auditor of the Company is to be proposed at the
forthcoming AGM.
AGM – special business
Five resolutions will be proposed as special business at the
AGM to be held on Monday 6 December 2021. Explanatory
notes on these resolutions are set out in the Notice of
Meeting of the AGM.
Disclosure of all relevant information to the auditor
The Directors who held office at the date of this report
confirm that, so far as they are each aware, there is no
relevant audit information of which the Company’s auditor
is unaware and that each Director has taken all the steps
that he or she ought to have taken as a Director to make
himself or herself aware of any relevant audit information
and to establish that the Company’s auditor is aware of
that information. This confirmation is given and should be
interpreted in accordance with the provisions of section 418
of the Companies Act 2006.
Listing Rules
There are no disclosures required by LR9.8.4 that apply to
the Company.
Accountability and audit
The Going Concern Statement, Long-Term Viability Statement
and the Statement of Directors’ Responsibilities in respect of
the Annual Report and Accounts are shown on pages 54, 55
and 114 respectively.
The Audit Committee, whose role is detailed on pages 80 to
89, has meetings at least twice a year with the Company’s
auditor, Ernst & Young LLP.
People
The important role that our people perform is described
throughout the Strategic Report. The following disclosures
provide additional information on how we treat our people
and how we engage with them.
We are an equal opportunities employer. It is our policy
to develop and apply, throughout the Group, procedures
and practices which are designed to ensure that equal
opportunities are provided to all of our employees, or
those who seek employment with the Group, irrespective
of their age, colour, disability, ethnic origin, gender, marital
status, nationality, parental status, race, religion, belief or
sexual orientation.
All employees, whether part-time, full-time or temporary,
are treated fairly and equally. Selection for employment,
promotion, training or other matters affecting their
employment is on the basis of aptitude and ability. All
employees are supported and encouraged to develop
to their full potential and the talents and resources of the
workforce are fully utilised to maximise the efficiency of
the organisation. Training at each division is planned and
monitored through an annual training plan.
It is our policy to give full and fair consideration to the
employment needs of disabled persons (and persons
who become disabled whilst employed by the Group)
and to comply with any current legislation with regard to
disabled persons.
The importance of good communications with employees
is recognised by the Directors and senior management
team. Employee Listening Groups are held on a regular
basis to engage in open communication and a newsletter is
issued to all of our employees. Each division maintains good
employee relations using a variety of means appropriate to
its own particular needs, with guidance when necessary from
Group Office.
Bellway p.l.c. Annual Report and Accounts 2021
113
GovernanceGovernance Directors’ Report continued
Statement of directors’ responsibilities in respect of
the financial statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
United Kingdom law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the Group and parent
company financial statements in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006. Under company
law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and the company and of the
profit or loss of the Group and the company for that period.
Under the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules, Group financial statements are
required to be prepared in accordance with international
financial reporting standards (IFRS) adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the
European Union.
In preparing these financial statements the Directors are
required to:
• Select suitable accounting policies in accordance with IAS
8 Accounting Policies, Changes in Accounting Estimates
and Errors and then apply them consistently;
• Make judgements and accounting estimates that are
reasonable and prudent;
• Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• Provide additional disclosures when compliance with
the specific requirements in IFRS is insufficient to enable
users to understand the impact of particular transactions,
other events and conditions on the Group and company
financial position and financial performance;
• In respect of the Group financial statements, state whether
international accounting standards in conformity with
the requirements of the Companies Act 2006 and IFRSs
adopted pursuant to Regulation(EC) No 1606/2002 as
it applies in the European Union have been followed,
subject to any material departures disclosed and
explained in the financial statements;
• In respect of the parent company financial statements, state
whether international accounting standards in conformity
with the requirements of the Companies Act 2006,
have been followed, subject to any material departures
disclosed and explained in the financial statements; and
• Prepare the financial statements on the going concern
basis unless it is appropriate to presume that the company
and/ or the Group will not continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the company’s and Group’s transactions and disclose with
reasonable accuracy at any time the financial position of the
company and the Group and enable them to ensure that
the company and the Group financial statements comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and parent company
and Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, Directors’ report,
Directors’ Remuneration Report and corporate governance
statement that comply with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website.
Directors’ responsibility statement (DTR 4.1)
The Directors confirm, to the best of their knowledge:
• That the consolidated financial statements, prepared in
accordance with international accounting standards in
conformity with the requirements of the Companies Act
2006 and IFRSs adopted pursuant to Regulation(EC) No
1606/2002 as it applies in the European Union), give a true
and fair view of the assets, liabilities, financial position and
profit of the parent company and undertakings included in
the consolidation taken as a whole;
• That the annual report, including the strategic report,
includes a fair review of the development and performance
of the business and the position of the company and
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks
and uncertainties that they face; and
• That they consider the annual report, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
company’s position, performance, business model
and strategy.
By order of the Board
Simon Scougall
Group General Counsel and Company Secretary
18 October 2021
Bellway p.l.c. Annual Report and Accounts 2021
114
Governance Independent Auditor’s Report
Independent Auditor’s report to the members of Bellway p.lc.
Opinion
In our opinion:
• Bellway p.l.c.’s Group financial statements and parent
company financial statements (the “financial statements”)
give a true and fair view of the state of the Group’s and of
the parent company’s affairs as at 31 July 2021 and of the
Group’s profit for the year then ended;
• The Group financial statements have been properly
prepared in accordance with International Accounting
Standards in conformity with the requirements of
the Companies Act 2006 and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No.1606/2002 as it applies in the European Union;
• The parent company financial statements have been
properly prepared in accordance with International
Accounting Standards in conformity with the requirements
of the Companies Act 2006 as applied in accordance with
section 408 of the Companies Act 2006; and
• The financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements of Bellway
p.l.c. (the ‘parent company’) and its subsidiaries and joint
arrangements (the ‘Group’) for the year ended 31 July 2021
which comprise:
Group
Parent company
Consolidated balance sheet as at
31 July 2021
Balance sheet as at
31 July 2021
Consolidated income statement for
the year then ended
Consolidated statement of
comprehensive income for the
year then ended
Consolidated statement of changes
in equity for the year then ended
Statement of changes
in equity for the year
then ended
Statement of cash flows
for the year then ended
Related notes 1 to
28 to the financial
statements including a
summary of significant
accounting policies
Consolidated statement of cash
flows for the year then ended
Related notes 1 to 28 to the financial
statements, including a summary of
significant accounting policies
The financial reporting framework that has been applied
in their preparation is applicable law and International
Accounting Standards in conformity with the requirements
of the Companies Act 2006 and, as regards to the Group
financial statements, International Financial Reporting
Standards adopted pursuant to Regulation (EC) No.1606/2002
as it applies in the European Union and as regards the parent
company financial statements, as applied in accordance with
section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of
the Group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group
and parent company’s ability to continue to adopt the going
concern basis of accounting included:
• In conjunction with our walkthrough of the Group’s
financial close process, we obtained an understanding
of management’s going concern assessment process
and challenged management to ensure key factors
were considered in their assessment. We have obtained
an understanding of each of management’s modelled
scenarios, including the base case, severe but plausible
downside case and reverse stress test cases. The reverse
stress test cases have been prepared to illustrate severe
and unrealistic assumptions which achieve or nearly
achieve a break case i.e. where the Group runs out of cash
or breaches a debt covenant.
• We obtained management’s going concern assessment,
including the cashflow forecast for the going concern
period through to 31 July 2023 and tested these for
arithmetical accuracy.
• We challenged the appropriateness of the key assumptions
in management’s forecasts, including the impact of
housing completions and average selling price on
revenue generation, in the context of our knowledge
of the business, historical performance and the position
of the business at the year-end. We also assessed these
against information from the Office of National Statistics
noting no contradictory indicators. We considered the
appropriateness of the methods used to calculate the
cash flow forecasts. We determined through inspection
and testing of the methodology and calculations that the
methods utilised were appropriately sophisticated to be
able to make an appropriate assessment for Bellway.
Bellway p.l.c. Annual Report and Accounts 2021
115
GovernanceGovernance Independent Auditor’s Report continued
• We obtained the reverse stress testing cases prepared
by management and assessed the plausibility of these
and the severe downside case scenarios by challenging
the assumptions made and considering indicators of
contradictory evidence.
• We considered the mitigating factors included in the
cashflow forecasts that are within control of the Group.
This includes assessment of the Group’s operating and
non-operating cash outflows relating to discretionary
bonus payments and dividend payments and evaluating
the Group’s ability to control these outflows as mitigating
actions if required.
• We subjected the severe downside model to additional
stress testing to confirm management have considered
a balanced range of outcomes in their assessment of
going concern.
• Further to above, we note the Group has successfully
renewed £75 million of facilities that were due for expiration
by 31 July 2022.
• We reviewed the Group’s going concern disclosures
included in the Annual Report and Accounts in order
to assess whether the disclosures were appropriate and
described the assessment management performed and
the key judgements taken.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Group and parent company’s ability
to continue as a going concern over the period to 31 July
2023 from when the financial statements are authorised
for issue.
In relation to the Group and parent company’s reporting on
how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in
relation to the Directors’ statement in the financial statements
about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future
events or conditions can be predicted, this statement is not
a guarantee as to the Group’s and parent company’s ability
to continue as a going concern.
Overview of our audit approach
Audit scope
• We performed an audit of the complete
financial information of Bellway p.l.c.
components.
• The components where we performed
full scope audit procedures accounted
for 99% of profit before taxation, 99% of
revenue and 99% of total assets.
Key audit matters • Inappropriate revenue recognition; and
• Inappropriate cost of sales recognition
and valuation of work-in-progress and
land on sites under development
Materiality
• Overall Group materiality of £23.1m
which represents 5% of profit
before taxation.
First year
transition
• The year ended 31 July 2021 is our first
as auditor of the Group.
• We performed transition procedures
including shadowing of the previous
auditor through the 31 July 2020 audit,
and attended certain close meetings
and Audit Committee meetings.
• Our audit transition activities focused
on the following areas:
– We evaluated key judgements and the
Group’s accounting policies.
– We undertook reviews of the
predecessor auditor files to consider
working papers in relation to significant
audit risk matters, to identify and assess
the nature, timing and extent of audit
procedures performed in forming the
prior year auditor opinion.
– We understood and walked through
the key processes.
Bellway p.l.c. Annual Report and Accounts 2021
116
Governance An overview of the scope of the parent company
and Group audits
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit
scope for each company within the Group. Taken together,
this enables us to form an opinion on the consolidated
financial statements.
We take into account size, risk profile, the organisation of the
group and effectiveness of Group-wide controls, changes in
the business environment and other factors such as recent
internal audit results when assessing the level of work to be
performed at each company.
In assessing the risk of material misstatement to the Group
financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the financial
statements, of the 9 reporting components of the Group, we
selected 2 components covering entities which represent the
principal business units within the Group.
For the two components selected (“full scope components”),
which were selected based on their size or risk characteristics,
we performed an audit of their complete financial
information. The full scope components accounted for 99%
(2020: 100%) of the Group’s profit before taxation, 99% (2020:
100%) of the Group’s revenue and 99% (2020: 100%) of the
Group’s total assets. All remaining 7 components together
represent 1% of the Group’s profit before taxation. For these
components, we performed other procedures, including
analytical review, testing of consolidation journals and
intercompany eliminations to respond to any potential risks
of material misstatement to the Group financial statements.
The statutory audits of these 7 components were performed
concurrently with the Group audit.
Involvement with component teams
All audit work performed for the purposes of the audit was
undertaken by the Group audit team.
Impact of COVID-19 – audit logistics
We completed our audit utilising a hybrid model combining
remote working with attendance at certain Divisional
locations and Head Office. We engaged with Bellway
throughout the audit, using video calls, share-screen
functionality, secure encrypted document exchanges
and data downloads to avoid any limitation on audit
evidence required.
We attended certain closing meetings and the Audit
Committee conclusion meeting in person, with other
meetings performed via video conference calls.
We refined our methods of interaction to ensure direction
by the Partner in Charge throughout the audit, ensuring
involvement in key calls throughout the audit both internally
and with Bellway management.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on the overall
audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we
do not provide a separate opinion on these matters.
Bellway p.l.c. Annual Report and Accounts 2021
117
GovernanceGovernance Independent Auditor’s Report continued
Key observations communicated
to the Audit Committee
We did not identify any
evidence of material
misstatement in the
revenue recognised in
the year as a result of
inappropriate revenue
recognition or application
of cut off.
We did not identify any
evidence of inappropriate
management override in
respect of the amount of
revenue recorded.
Risk
Our response to the risk
Inappropriate
revenue recognition
Refer to the Audit Committee
Report (page 84); Accounting
policies and Note 1 and 10 of the
Consolidated Financial Statements
(pages 131, 132 and 140)
The Group has reported:
• Revenues of £3,122.5 million
(2020: £2,225.4 million)
• Trade receivables of £17.0 million
(2020: £32.3 million).
We identified a specific risk of
fraud and error in respect of
inappropriate revenue recognition
arising from sales transactions
being recorded ahead of
performance obligations being
satisfied. Revenue is recognised
at the point in time when the
performance obligation is
satisfied being legal or practical
completion. There is a risk that
management may recognise
revenue in advance of legal or
practical completion of plot sale
through inappropriate application
of cut off or manual postings
recording revenue in an earlier
period than appropriate. We
focused our procedures on the
occurrence of revenue and
existence of trade receivables.
Walkthrough and controls
• We performed walkthroughs of each significant class of
revenue transactions which consists of private sales and
housing association sales, and other income relating to part
exchange sales and assessed the design effectiveness of
key controls.
Timing of revenue recognition
• We applied a data analytics approach which allowed us to
interrogate full populations of revenue transactions across
all divisions to focus on the anomalies and unusual trends.
This work has enabled us to obtain assurance through a
3- way correlation between sales, accounts receivables
and cash postings. We tested this correlation through
a sample of revenue transactions from cash entries to
source documentation. We also searched for associated
identification of transactions which were processed outside
of the expected transaction flow.
• We reviewed the output of the work performed by internal
audit in respect of revenue recognised on plot completions
2 weeks prior and 2 weeks post the year end. In line with
our identified audit risk, we tested items classified as higher
risk and agreed these items to completion statements to
confirm the performance obligation was satisfied in advance
of year end.
• We performed test of details in relation to unit sales at
year end. We agreed a sample of transactions pre-year
end and post year end to legal or practical completion
statements, land registry documentation and evidence of
cash receipts. We selected these transactions randomly
to incorporate unpredictability within our testing. We
confirmed that revenue recognition is appropriate based on
the performance obligation being satisfied when practical
completion takes place.
Management override
• We performed inquiries of management at Group and
divisions regarding awareness of instances of fraud.
We extended these inquiries beyond the finance team
and inquired with Group General Counsel and Company
Secretary, Regional Chairmen and the Divisional
Director teams.
• We performed specific procedures in relation to manual
journals impacting revenue. We focused on entries with
specific characteristics, such as journals from outside normal
revenue patterns and those with unusual descriptions.
Examples of items reviewed were part exchange and Help-
to-Buy transactions.
Bellway p.l.c. Annual Report and Accounts 2021
118
Governance Key observations communicated
to the Audit Committee
We performed a range
of procedures over these
balances, such as targeted
testing informed by data
analytics and observation
of divisional valuation
meetings and we are
satisfied the carrying value
is appropriate.
Risk
Our response to the risk
Inappropriate recognition of cost
of sales margin and valuation of
work in progress and land on
sites under development
Refer to the Audit Committee
Report (page 84); Accounting
policies and Notes 3 and 7 of the
Consolidated Financial Statements
(pages 134 and 137)
The Group has reported:
• Cost of sales before net
legacy safety building
expense of £2,470.6 million
(2020: £1,803.2 million)
• Land £2,483.9 million
(2020: £2,216.2 million)
• Work-in-progress of £1,431.4
million (2020: £1,496.1 million)
• Showhomes £115.1 million
(2020: £124.6 million)
The site margin applied to plot
sales includes assumptions
regarding forecast revenue
and costs which are subject to
estimation uncertainty. There
is a risk that costs of sales and
margin recognised in the financial
statements and resulting valuation
of work in progress including
land in respect of sites under
development, may be misstated
if the site margin is incorrectly
determined, whether arising from
fraud or error.
Walkthrough and controls
• We performed a walkthrough of management’s controls
in place covering the monitoring and updating of site
valuations to assess design effectiveness.
• We attended and observed the valuation meeting at each
of the 22 divisions held closest to year end. As part of this,
we observed the level of review applied by management in
challenging assumptions within site valuations.
• We inspected a sample of action logs in respect of the
valuation meetings attended. This included ensuring the
process which is undertaken to challenge the margin,
forecast costs to complete and any other factors that could
impact on the margin was followed in accordance with the
group commercial policy.
• We performed inquiries of Regional Chairmen and the
Divisional Director teams to further understand any other
specific risks.
Testing appropriateness of assumption underpinning
site margin
• We utilised data analytics in order to identify higher risk sites
based on certain risk indicators. We identified certain sites
for testing and performed the following procedures where
appropriate:
• We assessed management’s inputs into projected future
selling prices by developing an expectation of revenue at
a plot level, utilising historical sales experience. We assessed
this using the average selling price on sold plots, based
on house types and square footage. Where necessary we
further corroborated exceptions to advertised plot release
prices and/or selling prices recorded in the Bellway sales
system.
• We assessed management’s inputs into projected costs on
a site by site basis. We did this by a detailed review of the
cost estimate and sampling key elements to supporting
documentation including sub-contractor orders, quotations,
tender documentation and invoices.
• We performed specific procedures to assess whether there
were material movements recorded in the final stages of
site adjustments, the net impact of this was not material. We
tested a sample of developments where the last plot was
sold during FY 21 and compared the final site margin to the
previous quarterly valuation.
• We performed specific procedures to assess whether there
have been any material movements in the site margins post-
year end. Where we identified sites with margin adjustments,
the net impact of this was not material.
Bellway p.l.c. Annual Report and Accounts 2021
119
GovernanceGovernance Independent Auditor’s Report continued
In the prior year, the Auditor’s report included a key audit
matter in relation to going concern. Our conclusions on
going concern are included on page 115 and 116. In the
prior year, the Auditor’s report included a key audit matter in
relation to the parent company in respect of recoverability of
parent company’s investment in subsidiaries and amounts
owed by Group undertakings. In the current year, we
consider this is not a key audit matter on the basis that we do
not consider it to represent an area where there is a higher
risk that a material misstatement will occur.
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users
of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £23.1 million
(2020: £21.0 million), which is 5% (2020: 4.1%) of Group profit
before taxation. We believe that profit before taxation provides
us with an appropriate basis of materiality that is appropriately
focused on the users of the financial statements.
We determined materiality for the parent company to be £2.6
million (2020: £5.4 million), which is 0.5% (2020: 1.0%) of total
assets. As the parent company does not trade and is not profit
focused, we believe total assets is an appropriate basis to
determine materiality.
Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to
an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements
exceeds materiality.
On the basis of this being our first year of audit, together with
our risk assessments and assessment of the Group’s overall
control environment, our judgement was that performance
materiality was 50% (2020: 75%) of our planning materiality,
namely £11.55 million (2020: £15.75 million).
Audit work at component locations for the purpose of
obtaining audit coverage over significant financial statement
accounts is undertaken based on a percentage of total
performance materiality. The performance materiality set for
each component is based on the relative scale and risk of
the component to the Group as a whole and our assessment
of the risk of misstatement at that component. In the current
year, the range of performance materiality allocated to
components was £1.3 million to £8.7 million.
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of £1.1 million
(2020: £1 million), which is set at 5% of planning materiality,
as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming
our opinion.
Other information
The other information comprises the information included
in the annual report and accounts set out on pages 1 to
114, including the Strategic Report, the Directors’ Report,
the Remuneration Committee Report and Corporate
Governance reporting, other than the financial statements
and our auditor’s report thereon. The Directors are
responsible for the other information contained within the
Annual Report and Accounts.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements,
we are required to determine whether there is a material
misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there
is a material misstatement of the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• The information given in the Strategic Report and the
Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
• The Strategic Report and the Directors’ Report have been
prepared in accordance with applicable legal requirements.
Bellway p.l.c. Annual Report and Accounts 2021
120
Governance Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the group
and the parent company and its environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• Adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• The parent company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• Certain disclosures of Directors’ remuneration specified by
law are not made; or
• We have not received all the information and explanations
we require for our audit.
Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement
in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the
Group and Company’s compliance with the provisions of the
UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with
the financial statements or our knowledge obtained during
the audit::
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 54;
• Directors’ explanation as to its assessment of the
Company’s prospects, the period this assessment covers
and why the period is appropriate set out on page 54;
• Directors’ statement on fair, balanced and understandable
set out on page 114;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
pages 48–51;
• The section of the Annual Report and Accounts that
describes the review of effectiveness of risk management
and internal control systems set out on pages 87–88;
• The section describing the work of the Audit Committee set
out on pages 80–89.
Responsibilities of directors
As explained more fully in the Directors’ responsibilities
statement set out on page 114, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group and parent company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either
intend to liquidate the Group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
financial statements.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention
and detection of fraud rests with both those charged with
governance of the company and management.
Bellway p.l.c. Annual Report and Accounts 2021
121
GovernanceGovernance Independent Auditor’s Report continued
Other matters we are required to address
• Following the recommendation from the Audit Committee,
we were appointed by the company on 11 December 2020
to audit the financial statements for the year ended 31 July
2021 and subsequent financial periods.
• The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Group or the parent
company and we remain independent of the Group and
the parent company in conducting the audit.
• The audit opinion is consistent with the additional report to
the Audit Committee.
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an Auditor’s report
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Mark Morritt (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Newcastle-upon-Tyne
18 October 2021
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to the Group
and determined that the most significant are those that
relate to the reporting framework (International Financial
Reporting Standards adopted pursuant to Regulation
(EC) No.1606/2002 as it applies in the European Union,
the Companies Act 2006 and UK Corporate Governance
Code), tax legislation, employment law, health and safety
legislation, fire and building safety legislation.
• We understood how the Group is complying with those
frameworks by making inquiries with management, internal
audit and those responsible for legal and compliance
procedures and the Group General Counsel and Company
Secretary. We corroborated our enquiries through our
review of Board minutes and review of Group compliance
with policies and processes. We obtained and reviewed
legal correspondence to support our audit procedures and
to assess management positions reported in respect of
legacy building safety improvements.
• We assessed the susceptibility of the Group financial
statements to material misstatement, including how fraud
might occur by meeting with management from various
parts of the business to understand where it considered
there was a susceptibility to fraud. We also considered
performance targets and their propensity to influence
efforts made by management to manage earnings.
We considered the programmes and controls that the
Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud; and how senior
management monitors those programmes and controls.
Where the risk was considered to be higher, we performed
audit procedures to address each identified fraud risk.
These procedures included testing manual journals and
were designed to provide reasonable assurance that the
financial statements were free from fraud and error.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations. Our procedures involved journal entry
testing, with a focus on manual consolidation journals, and
journals indicating large or unusual transactions based
on our understanding of the business; enquiries of Group
management and internal audit; and focused testing,
as referred to in the key audit matters section above.
In addition, we completed procedures to conclude on
the compliance of the disclosures in the Annual Report
and Accounts with the requirements of the relevant
accounting standards, UK legislation and the UK Corporate
Governance Code 2018.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Bellway p.l.c. Annual Report and Accounts 2021
122
Governance Accounts
Contents
Primary statements
Group Income Statement
Group Statement of Comprehensive Income
Statements of Changes in Equity
Balance Sheets
Parent Company Income Statement
Cash Flow Statements
Basis of preparation
Basis of preparation
Going concern
Basis of consolidation
Effect of new standards and interpretations effective
for the first time
Standards and interpretations in issue but not yet effective
Notes to the Financial Statements
Notes to the Financial Statements
Performance for the year
1.
Revenue
2. Net legacy building safety expense and exceptional items
3.
Cost of sales recognition
4. Operating profit
4a. Part-exchange properties
4b. Operating profit is stated after charging/(crediting)
4c. Auditor’s remuneration
5.
Earnings per ordinary share
Taxation
6.
Taxation
6a.
Income tax recognised in the income statement
124
124
125
127
127
128
129
129
130
130
130
131
131
132
134
134
134
134
134
135
135
136
6b. Tax recognised in equity and other comprehensive income 136
6c. Deferred taxation
Working capital
Inventories
7.
8.
9.
Trade and other receivables
Trade and other payables
10.
Provisions and reimbursement assets
136
137
138
139
140
Business combinations and other
investing activities
11.
Property, plant and equipment
12.
Financial assets and equity accounted joint arrangements,
and investments in subsidiaries
13.
Joint arrangements
14. Acquisition of joint arrangement
15. Commitments
Financing
16. Net cash
16a. Reconciliation of net cash flow to net cash
16b. Analysis of net cash
17.
18.
Finance income and expenses
Financial instruments
Shareholder capital
Issued capital
19.
20. Reserves
21. Dividends on equity shares
Directors and employees
22. Employee information
23. Retirement benefit asset
24. Share based payments
Contingencies, related parties and subsidiaries
25. Contingent liabilities
26. Related party transactions
27. Group undertakings
28. Resident management companies
Other information
29. Alternative performance measures
Five year record
141
142
142
143
144
145
145
145
146
146
148
148
149
149
150
152
154
155
156
157
163
166
Key to financial statement icons
Throughout the financial statements the below icons are used and they represent the following:
Accounting policy
The accounting policies set out within the financial statements have, unless otherwise stated, been applied
consistently to all periods presented in these consolidated financial statements.
Accounting estimate
The Directors consider these areas to be the major sources of estimation that have been made in these
financial statements.
Accounting judgement
The Directors consider these to be the major judgements that could have a significant effect on the financial
statements when applying the Group’s accounting policies.
Bellway p.l.c. Annual Report and Accounts 2021
123
AccountsAccounts Group Income Statement
for the year ended 31 July 2021
2021
Before net
legacy building
safety expense
2021
Net legacy
building safety
expense (note 2)
2021
Total
2020
Before net
legacy building
safety expense
and exceptional
items
2020
Net legacy
building safety
expense and
exceptional items
(note 2)
Note
£m
3,122.5
(2,470.6)
651.9
54.6
(54.9)
(120.1)
531.5
0.6
(11.7)
10.4
530.8
(98.1)
432.7
Revenue
Cost of sales
Gross profit
Other operating income
Other operating expenses
Administrative expenses
Operating profit
Finance income
Finance expenses
Share of result of joint ventures
Profit before taxation
Income tax expense
Profit for the year*
Earnings per ordinary share
– Basic
Earnings per ordinary share
– Diluted
1
4
4
4
17
17
13
6
5
5
£m
–
(51.8)
(51.8)
–
–
–
(51.8)
–
–
–
(51.8)
9.8
(42.0)
£m
3,122.5
(2,522.4)
£m
2,225.4
(1,803.2)
422.2
153.0
(156.1)
(97.4)
321.7
0.2
(13.6)
1.0
309.3
(57.6)
251.7
600.1
54.6
(54.9)
(120.1)
479.7
0.6
(11.7)
10.4
479.0
(88.3)
390.7
316.9p
315.8p
£m
–
(71.9)
(71.9)
–
–
(0.7)
(72.6)
–
–
–
(72.6)
13.8
(58.8)
Group Statement of Comprehensive Income
for the year ended 31 July 2021
2020
Total
£m
2,225.4
(1,875.1)
350.3
153.0
(156.1)
(98.1)
249.1
0.2
(13.6)
1.0
236.7
(43.8)
192.9
156.6p
156.1p
Profit for the period
Other comprehensive income/(expense)
Items that will not be recycled to the income statement:
Remeasurement gains/(losses) on defined benefit pension plans
Income tax on other comprehensive (income)/expense
Other comprehensive income/(expense) for the period, net of income tax
Total comprehensive income for the period*
* All attributable to equity holders of the parent.
Note
23
6
2021
£m
390.7
2020
£m
192.9
8.5
(2.2)
6.3
397.0
(1.8)
0.3
(1.5)
191.4
Bellway p.l.c. Annual Report and Accounts 2021
124
Accounts
Statements of Changes in Equity
at 31 July 2021
Group
Note
Balance at 1 August 2019
Total comprehensive income
for the period
Profit for the period
Other comprehensive expense*
Total comprehensive income
for the period
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares
Shares issued
21
19
Credit in relation to share options
and tax thereon
6, 24
Total contributions by and
distributions to shareholders
Issued
capital
£m
15.3
Share
premium
£m
175.8
Capital
redemption
reserve
£m
20.0
Other
reserves
£m
1.5
Retained
earnings
£m
2,708.6
Total
equity
£m
2,921.2
–
–
–
–
0.1
–
0.1
–
–
–
–
2.6
–
2.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
192.9
(1.5)
192.9
(1.5)
191.4
191.4
(123.1)
(123.1)
–
1.8
2.7
1.8
(121.3)
(118.6)
Balance at 31 July 2020
15.4
178.4
20.0
1.5
2,778.7
2,994.0
Total comprehensive income for
the period
Profit for the period
Other comprehensive income*
Total comprehensive income
for the period
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares
Purchase of own shares
Shares issued
Credit in relation to share
options and tax thereon
Total contributions by and
distributions to shareholders
21
20
19
6, 24
–
–
–
–
–
–
–
–
–
–
–
–
–
1.4
–
1.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
390.7
6.3
397.0
(104.7)
(2.5)
–
2.6
390.7
6.3
397.0
(104.7)
(2.5)
1.4
2.6
(104.6)
(103.2)
Balance at 31 July 2021
15.4
179.8
20.0
1.5
3,071.1
3,287.8
* An additional breakdown is provided in the Group Statement of Comprehensive Income.
Bellway p.l.c. Annual Report and Accounts 2021
125
AccountsAccounts
Statements of Changes in Equity continued
at 31 July 2021
Company
Note
Balance at 1 August 2019
Issued
capital
£m
15.3
Share
premium
£m
175.8
Capital
redemption
reserve
£m
20.0
Other
reserves
Retained
earnings
£m
2.1
£m
427.2
Total
equity
£m
640.4
Total comprehensive income
for the period
Profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares
Shares issued
Credit in relation to share options
Total contributions by and
distributions to shareholders
21
19
24
–
–
–
–
0.1
–
0.1
–
–
–
–
2.6
–
2.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.9
–
0.9
0.9
–
0.9
(123.1)
(123.1)
–
2.1
2.7
2.1
(121.0)
(118.3)
Balance at 31 July 2020
15.4
178.4
20.0
2.1
307.1
523.0
Total comprehensive income for
the period
Profit for the period
Other comprehensive income
Total comprehensive income
for the period
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares
Purchase of own shares
Shares issued
Credit in relation to share options
Total contributions by and
distributions to shareholders
21
20
19
24
–
–
–
–
–
–
–
–
–
–
–
–
–
1.4
–
1.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
185.5
–
185.5
(104.7)
(2.5)
–
2.6
185.5
–
185.5
(104.7)
(2.5)
1.4
2.6
(104.6)
(103.2)
Balance at 31 July 2021
15.4
179.8
20.0
2.1
388.0
605.3
Bellway p.l.c. Annual Report and Accounts 2021
126
Accounts Balance Sheets
at 31 July 2021
Group
2020
£m
Company
2021
£m
Company
2020
£m
ASSETS
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Financial assets
Equity accounted joint arrangements
Deferred tax assets
Retirement benefit assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings
Trade and other payables
Deferred tax liabilities
Provisions
Current liabilities
Interest-bearing loans and borrowings
Corporation tax payable
Trade and other payables
Provisions
Total liabilities
Net assets
EQUITY
Issued capital
Share premium
Capital redemption reserve
Other reserves
Retained earnings
Total equity
Note
11
12
12
12
6
23
7
8
16
16
9
6
10
16
9
10
19
20
20
Group
2021
£m
35.7
–
39.6
15.7
0.9
10.2
102.1
36.7
–
55.5
5.3
0.5
1.3
99.3
4,032.2
3,863.0
82.2
460.3
4,574.7
4,676.8
130.0
89.7
8.2
89.0
316.9
–
4.0
1,041.1
27.0
1,072.1
1,389.0
3,287.8
15.4
179.8
20.0
1.5
3,071.1
3,287.8
69.9
51.4
3,984.3
4,083.6
–
131.2
2.6
–
133.8
50.0
1.5
834.0
70.3
955.8
1,089.6
2,994.0
15.4
178.4
20.0
1.5
2,778.7
2,994.0
–
40.4
–
–
–
–
–
37.8
–
–
–
–
40.4
37.8
–
512.3
52.8
565.1
605.5
–
432.8
52.7
485.5
523.3
–
–
–
–
–
–
–
0.2
–
0.2
0.2
–
–
–
–
–
–
–
0.3
–
0.3
0.3
605.3
523.0
15.4
179.8
20.0
2.1
388.0
605.3
15.4
178.4
20.0
2.1
307.1
523.0
Approved by the Board of Directors on 18 October 2021 and signed on its behalf by:
Paul Hampden Smith
Director
Keith Adey
Director
Registered number 1372603
Parent Company Income Statement
In accordance with the provisions of section 408 of the Companies Act 2006, a separate Income Statement for the Company
has not been presented. The Company’s profit for the year was £185.5 million (2020 – £0.9 million).
Bellway p.l.c. Annual Report and Accounts 2021
127
AccountsAccounts
Cash Flow Statements
for the year ended 31 July 2021
Cash flows from operating activities
Profit for the year
Depreciation charge
Investment impairment
Profit on sale of property, plant and equipment
Finance income
Finance expenses
Share-based payment expense
Share of post tax result of joint ventures
Income tax expense
Increase in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in provisions
Cash from operations
Interest paid
Income tax paid
Net cash inflow/(outflow) from operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Increase in loans to joint ventures
Repayment of loans by joint ventures
Acquisition of joint operation
Interest received
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
(Decrease)/increase in bank borrowings
Increase in fixed rate sterling USPP notes
Payment of lease liabilities
Proceeds from the issue of share capital on exercise of
share options
Purchase of own shares
Dividends paid
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
11
12
4
17
17
24
13
6
12
12
14
21
16
Group
2021
£m
390.7
6.5
–
(0.7)
(0.6)
11.7
2.6
(10.4)
88.3
(160.3)
(12.0)
158.1
45.7
519.6
(3.0)
(84.1)
432.5
(3.3)
1.5
(17.1)
33.0
(8.9)
0.4
5.6
(50.0)
130.0
(3.4)
1.4
(2.5)
(104.7)
(29.2)
408.9
51.4
460.3
Group
2020
£m
192.9
6.3
–
–
(0.2)
13.6
2.1
(1.0)
43.8
(385.0)
58.0
55.0
70.3
55.8
(6.0)
(107.7)
(57.9)
(8.3)
0.1
(9.9)
–
–
0.3
(17.8)
50.0
–
(3.7)
2.7
–
(123.1)
(74.1)
(149.8)
201.2
51.4
Company
2021
£m
Company
2020
£m
185.5
–
–
–
–
–
–
–
–
–
(79.5)
(0.1)
–
105.9
–
–
0.9
–
5.7
–
–
–
–
–
–
–
113.7
–
–
120.3
–
–
105.9
120.3
–
–
–
–
–
–
–
–
–
–
1.4
(2.5)
(104.7)
(105.8)
0.1
52.7
52.8
–
–
–
–
–
–
–
–
–
–
2.7
–
(123.1)
(120.4)
(0.1)
52.8
52.7
Bellway p.l.c. Annual Report and Accounts 2021
128
Accounts
Accounting Policies
Basis of preparation
Basis of preparation
Bellway p.l.c. (the ‘Company’) is a company incorporated in England and Wales.
The consolidated Group financial statements have been prepared and approved by the Directors in accordance with
International Accounting Standards (‘IAS’) in conformity with the requirements of the Companies Act 2006 and prepared in
accordance with International Financial Reporting Standards (‘IFRS’) as adopted pursuant to Regulation (EC) No. 1606/2002
as it applies in the European Union. The parent company financial statements are prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act 2006. On publishing the Company financial
statements here together with the Group financial statements, which were approved for issue on 18 October 2021, the Company
is taking advantage of the exemption in section 408 of the Companies Act 2006 not to present its individual income statement
and related notes that form a part of these financial statements.
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates.
The accounting policies set out within the notes to the financial statements have, except as noted below, been applied
consistently to all periods presented in these consolidated financial statements.
The Group has recently entered into a small number of contractual arrangements with certain social housing providers and this
will affect the recognition of the associated revenue and trade receivables in both the current and future accounting periods.
This has not had a material effect on the current year financial statements. The amended revenue recognition and trade and
other receivables accounting policies of the Group are included in note 1 and note 8.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position, are set out in the Chief Executive’s Market and Operational Review on pages 36 to 39. The financial position
of the Group, its cash flows, liquidity position and borrowing facilities are described in the Group Finance Director’s
Review on pages 40 to 43 and the Director’s Report on page 111. The Risk Management section on pages 52 to 55
sets out the Group’s policies and processes for managing its capital, financial risk, and its exposure to credit, liquidity,
interest rate and housing market risk.
The Group’s activities are financed principally by a combination of ordinary shares and cash in hand less debt. At 31
July 2021, Bellway had net cash of £330.3 million1 (note 16), having generated cash of £328.9 million (note 16) during
the year, including £519.6 million of cash from operations. The Group has operated within all its debt covenants
throughout the year, and covenant compliance was considered as part of the going concern assessment. In
addition, the Group had bank facilities of £420.0 million at 31 July 2021, expiring in tranches up to July 2024. These
have subsequently reduced to £370.0 million at 24 September 2021, with tranches expiring up to December 2025,
as a result of planned business as usual bank refinancing. Furthermore, the Group entered into a contractual
arrangement during the year to issue a sterling US Private Placement (‘USPP’) for a total amount of £130.0 million, as
part of its ordinary course of business financing arrangements. This USPP debt, which has maturity dates in seven
and ten years, was fully drawn down on 17 February 2021. In aggregate, this provided the Group with committed debt
lines of £550.0 million at 31 July 2021, which have reduced to £500.0 million at 24 September 2021.
Including committed debt lines and cash, Bellway had access to total funds of £880.3 million, along with net current
assets (excluding net cash) of £3,042.3 million at 31 July 2021, providing the Group with appropriate liquidity to meet
its current liabilities as they fall due.
The Group’s internal forecasts have been regularly updated, incorporating our actual experience along with our
expected future outturn. The latest available base forecast has been sensitised, setting out the Group’s resilience to
the principal risks and uncertainties in the most severe but plausible scenario. The sensitivity includes a recession
due to economic uncertainty and a deterioration in customer confidence. This could lead to a reduction in both the
total number of legal completions and private average selling price, with overheads, land spend and construction
spend reducing accordingly.
This sensitivity includes the following principal assumptions:
• Private completions in H1 FY22 are supported by the strong forward order book, but still fall to 83% of that achieved
in H1 of FY21. In the 12 months to 31 January 2023, private completions reduce by around 50% compared to the
pre-COVID-19 ‘lockdown’ peak. This is followed by a gradual recovery based on the lower base position.
• Private average selling price in H1 FY22 remains in line with internal forecasts due to the strong order book position.
In the 12 months to 31 January 2023, the private average selling price reduces by 10% compared to the latest
achieved pricing. This is followed by a gradual recovery based on the lower base position.
Bellway p.l.c. Annual Report and Accounts 2021
129
AccountsAccounts Accounting Policies continued
Going concern continued
• These assumptions reflect the Group’s experience in the 2008–09 global financial crisis.
A number of prudent mitigating actions were incorporated into the plausible but severe downside scenario,
including:
• Plots in the land bank only being replaced at the same rate that they are utilised.
• Construction spend is reduced in line with housing revenue.
• Dividends were reduced in line with earnings.
The sensitivity analysis was modelled over the period to 31 July 2023 for the going concern assessment, but
extended to the 31 July 2025 for the Director’s viability assessment. In addition to the scenario, several additional
mitigating measures remain available to management that were not included in the scenario. These include
withholding discretionary land spend and instead trading out of the substantial existing land holdings and further
reducing construction spend in recognition of the strong carried forward work in progress position at 31 July 2021.
In the scenario, the Group had significant headroom in both its financial debt covenants and existing debt facilities
and met its liabilities as they fall due. The going concern assessment is not considered to be materially affected by the
Future Homes Standard as it is due to be implemented beyond the assessment period.
The Directors consider that the Group is well placed to manage business and financial risks in the current economic
environment. Consequently, the Directors are confident that the Group and parent company will have sufficient
funds to continue to meet its liabilities as they fall due for the period to 31 July 2023, aligning with the first year end
after the minimum 12 month assessment period, and have therefore prepared the financial statements on a going
concern basis.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company made up to 31 July. The Company controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.
The financial statements of these entities are included in the consolidated financial statements from the date that
control commences until the date that control ceases.
Joint arrangements are those entities over whose activities the Group has joint control, established by contractual
agreement. A joint arrangement can take two forms:
(i) Joint venture – These entities are consolidated using the equity method of accounting.
(ii)
Joint operation – The Group’s share of the assets, liabilities and transactions of such entities are accounted for
directly as if they were assets, liabilities and transactions of the Group.
Effect of new standards and interpretations effective for the first time
The adoption of the new standards and interpretations effective for the first time in these financial statements has not had a
material effect on the Group’s profit for the year or equity.
Standards and interpretations in issue but not yet effective
At the date of authorisation of these financial statements there were a number of standards and interpretations which were in
issue but not yet effective. These have not been applied in these financial statements and are not expected to have a material
effect when adopted.
Bellway p.l.c. Annual Report and Accounts 2021
130
Accounts Notes to the Financial Statements
Performance for the year
1. Revenue
Revenue recognition
Revenue is measured at the fair value of consideration received or receivable, net of incentives.
Private housing sales and land sales
Revenue is recognised in the income statement at a point in time when the performance obligation, being the
transfer of a completed dwelling or land to a customer, has been satisfied. This is when legal title is transferred.
Social housing
The Group reviews social housing contracts on a contract by contract basis and determines the appropriate revenue
recognition based on the specific terms of each contract.
Where a contract with a housing association transfers both land and social housing on legal completion (“turnkey
and plot sale contracts” which typically represents around one third of social housing revenue), there is one
performance obligation and revenue is recognised in the income statement at a point in time when the homes are
build complete and all material contractual obligations have been fulfilled. This is when legal title is transferred.
Where a contract with a housing association transfers legal title of land once foundations are in place (“design and
build” contracts’ which typically represents around two thirds of social housing revenue) and separately transfers
the social housing dwellings when they are build complete, there is a judgement as to whether the sale of land is
a separate performance obligation for the purposes of revenue recognition and consequentially whether revenue
should be recognised over time or on a point in time basis for the social housing units. Based on the contractual
terms in the majority of such contracts, notably those that enable the Group to retain control over the land regardless
of the transfer of title, the Group has determined that these contracts include one performance obligation which
is appropriately recognised at a point in time, when the homes are build complete and all material contractual
obligations have been fulfilled.
The Group recognises revenue in the income statement over time for contracts where the control of land is
irrevocably transferred to the customer before or during construction. Revenue is recognised from the point that
control is irrevocably transferred to the customer.
Where revenue is recognised over time and the outcome of the contract can be estimated reliably, it is recognised
based on the stage of completion of the contract at the balance sheet date. This is usually by reference to surveys
of work performed to the balance sheet date. Variations to such contracts are included in revenue to the extent that
they have been agreed with the customer. Where the outcome of such a contract cannot be measured reliably,
revenue is recognised to the extent of costs incurred.
Incentives
Sales incentives are substantially cash in nature. Cash incentives are recognised as a reduction in housing revenue
by the cost to the Group of providing the incentive.
Rental income
Rental income is recognised in the income statement on a straight-line basis over the term of the lease.
Segmental analysis
The Executive Board (the Chief Operating Decision Maker as defined in IFRS 8 ‘Operating Segments’) regularly
reviews the Group’s performance and balance sheet position at both a consolidated and divisional level. Each
division is an operating segment as defined by IFRS 8 in that the Executive Board assess performance and allocates
resources at this level. All of the divisions have been aggregated in to one reporting segment on the basis that they
share similar economic characteristics including:
• National supply agreements are in place for key inputs including materials.
• Debt is raised centrally and the cost of capital is the same at each division.
• Sales demand at each division is subject to the same macroeconomic factors, such as mortgage availability and
government policy.
Additional information on average selling prices and the unit sales split between north, south, private and social has
been included in the Group Finance Director’s Review on pages 41 to 43. The Board does not, however, consider
these categories to be separate reportable segments as they review the entire operations at a consolidated and
divisional level when assessing performance and making decisions about the allocation of resources.
Bellway p.l.c. Annual Report and Accounts 2021
131
AccountsAccounts Notes to the Financial Statements continued
Performance for the year
1. Revenue continued
Revenue from contracts with customers
An analysis of the Group’s revenue is as follows:
Housing revenue
Non-housing revenue
Total revenue
The Group’s housing revenue can be analysed as follows:
(a) Private/social
Private
Social
Total housing revenue
(b) North/South
North
South
Total housing revenue
2021
£m
3,107.1
15.4
3,122.5
2021
£m
2,737.3
369.8
3,107.1
2021
£m
1,295.7
1,811.4
3,107.1
2020
£m
2,204.4
21.0
2,225.4
2020
£m
1,948.1
256.3
2,204.4
2020
£m
955.8
1,248.6
2,204.4
2. Net legacy building safety expense and exceptional items
Exceptional items are those which, in the opinion of the Board, are material by size or nature and of such significance
that they require separate disclosure on the face of the income statement.
Exceptional items
While preparing these financial statements, a major judgement which the Directors consider could have a significant
effect on the financial statements when applying the Group’s accounting policies is whether items should be treated
as exceptional or not, the value of such items is not considered to be an area of judgement. The Directors assessed
each possible exceptional item against a framework incorporating the Group’s accounting policy, the accounting
requirements of IAS 1 ‘Presentation of Financial Statements’ relating to the separate disclosure of material items of
income or expense and the FRC Company Guidance in relation to COVID-19 (updated 20 May 2020).
For the years ended 31 July 2021 and 31 July 2020, the Directors considered that the net legacy building safety
expense satisfied the requirements to be separately disclosed on the face of the income statement.
For the year ended 31 July 2020, the Directors considered other items when reviewing areas of the business that
could give rise to a COVID-19 related exceptional item and concluded that neither of the following items satisfied all
of the requirements of an exceptional item:
i)
ii)
Extended site durations, together with enhanced health and safety requirements relating to social distancing
measures – In addition to the costs set out in section (ii) below, further costs arising from extended site durations,
together with enhanced health and safety requirements relating to social distancing measures, led to an
additional cost of £21.7 million (2020 – £18.9 million). These incremental site-based costs continued to influence the
operating margin in the year.
Furloughed costs for non-site based employees – Following our decision on 23 March 2020 to close sites,
the Group furloughed around 75% of its workforce, with this principally comprising directly employed site
tradespeople, site managers and sales advisers. We paid these employees full basic salary throughout April 2020
and May 2020, and although eligible Bellway did not apply for a grant using the CJRS. The expense to the Group
relating to those furloughed employees, whose cost is not capitalised to a site, was considered in the review of
possible exceptional items.
Bellway p.l.c. Annual Report and Accounts 2021
132
Accounts 2. Net legacy building safety expense and exceptional items continued
Operating profit for the years ended 31 July 2021 and 31 July 2020 has been arrived at after recognising the following items in
the income statement:
Net legacy building safety expense (note 10)
COVID-19 related exceptional items
(a) Aborted land contracts
(b) Abnormal, non-productive site-based costs arising from the interruption to construction activity
during ‘lockdown’
(c) Restructuring costs
Total COVID-19 related exceptional expense
Total net legacy building safety expense and exceptional items
2021
£m
51.8
–
–
–
–
51.8
2020
£m
46.8
9.9
14.5
1.4
25.8
72.6
£51.8 million (2020 – £71.9 million) of the total net legacy building safety expense and exceptional items is recognised within cost of
sales and £nil (2020 – £0.7 million), relating to a proportion of the restructuring costs, is included within administrative expenses.
The income tax rate applied to the total net legacy building safety expense and exceptional items in the income statement is
the Group’s standard rate of corporation tax, 19.0% (2020 – 19.0%).
(i) Net legacy building safety expense
We continue to take a proactive approach to nationwide concerns with regards to fire safety in high-rise buildings across the
UK. Bellway recognises its responsibilities in its legacy apartment portfolio and continues to review combustion risks, in external
wall systems, on past high-rise developments.
Initially, our review efforts were directed towards those buildings over 18 metres in height, where Aluminium Composite Material
(‘ACM’) had been used in the construction of the external wall envelope. The scope of our review has since widened, following
the ‘Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings’, issued by the Ministry of Housing,
Communities and Local Government in January 2020.
We therefore now approach this issue, with the benefit of sector-wide hindsight and, by applying revised guidance which
clarifies the Government’s interpretation of the extant building regulations that were in place at the time of construction. Our
reviews, which often include the results of investigative surveys, consider whole external wall systems to determine whether the
combination of materials used adequately prevent external fire spread, thereby rendering the building safe.
As previously reported, Bellway has identified a number of developments, which obtained building regulation approval at the
time of construction, where the building materials used may not fully comply with this most recent Government guidance.
Notwithstanding the complexities in assessing legal liability, as a responsible developer, we continue to assess our portfolio of
legacy apartment schemes to determine the scope of potential remediation works.
As a result of this evaluation, Bellway has made an additional net exceptional expense of £51.8 million (2020 – £46.8 million) as
part of its commitment to help building owners remediate affected properties.
This is a highly complex area with judgements and estimates (note 10) in respect of the cost of remedial works, and the extent of
those properties within the scope of the applicable government guidance, which is likely to evolve.
The Group has also recognised recoveries from third parties, with gross income of £15.1 million (2020 – £1.7 million), relating to
those assets which are virtually certain. The majority has been received in cash with only £0.5 million (2020 – £nil) outstanding at
the year end.
(ii) COVID-19 related exceptional items
This category solely relates to the year ended 31 July 2020, with no items recognised during the year ended 31 July 2021.
The onset of the COVID-19 pandemic in March 2020 materially affected the Group, and a COVID-19 related exceptional item
was recognised in the financial statements for the year ended 31 July 2020.
Aborted land contracts – as conditions changed in the land market following the onset of COVID-19, a number of land deals
were aborted or indefinitely suspended, a full impairment of inventories was performed, resulting in a land impairment of £9.9
million during the year ended 31 July 2020.
Abnormal, non-productive site-based costs arising from the interruption to construction activity during ‘lockdown’ – a
number of site-based costs, which would have ordinarily been capitalised in to work-in-progress, were incurred when
construction activity was initially suspended across the Group as the UK entered the first national ‘lockdown’. These costs did
not contribute to bringing the inventory into its current location or condition during this period of interruption, and accordingly
£14.5 million was expensed to the income statement during the year ended 31 July 2020.
Restructuring costs – a modest workforce rationalisation programme was undertaken in response to reduced output and the
suspension of divisional expansion plans during the year ended 31 July 2020.
Bellway p.l.c. Annual Report and Accounts 2021
133
AccountsAccounts
Notes to the Financial Statements continued
3. Cost of sales recognition
Cost of sales recognition
Cost of sales is recognised for completed house sales as an allocation of the latest whole site/phase gross margin
which is an output of the site/phase valuation. These valuations, which are updated at frequent intervals throughout
the life of the site/phase, use actual and forecast selling prices, land costs and construction costs and are sensitive
to future movements in both the estimated cost to complete and expected selling prices. Forecast selling prices are
inherently uncertain due to changes in market conditions. This is a key estimate made in the financial statements.
To determine the amount of cost of sales that the Group should recognise on its sites/phases in the year, the Group
needs to allocate site/phase wide costs between all plots, both those already sold, and those plots to be sold in
future periods. The Group generally allocates site/phase wide costs based on expected total revenue unless this does
not reflect an appropriate apportionment of the costs. It is also necessary to estimate costs to complete on such sites/
phases. In addition, the Group makes estimates in relation to future sales prices on the site/phase. The Group has
a number of internal controls to assess and review the reasonableness of estimates made. If housing gross margin
decreased by 200 basis points, it is estimated that the quantum of housing cost of sales would increase by around
2.5%.
4. Operating profit
4a Part-exchange properties
Part-exchange properties
The purchase and subsequent sale of part-exchange properties is an activity undertaken in order to achieve the
sale of a new property. The original sale of private housing is recognised, as above, at the fair value of the part-
exchange property plus the cash received or receivable. The fair value of the part-exchange property is equal to the
amount assessed by external valuers. The onward sale of a part-exchange property is recognised at the fair value
of consideration received or receivable. As it is not considered a principal activity of the Group, the income and
expenses associated with this are recognised in other operating income and other operating expenses. Income is
recognised in the income statement at a point in time when the performance obligations have been satisfied. This is
when legal title is transferred.
All other operating income relates to the sale of part-exchange properties and all other operating expenses relate to the
associated fair value of the part-exchange properties less costs to sell.
4b Operating profit is stated after charging/(crediting)
Operating profit is stated after charging/(crediting)
Staff costs (note 22)
Depreciation of property, plant and equipment
Hire of plant and machinery
Profit on sale of property, plant and equipment
4c Auditor’s remuneration
Audit of these financial statements
Amounts receivable by the auditor and its associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation
Pension scheme audit
2021
£m
184.4
6.5
15.2
(0.7)
2021
£000
60
333
15
2020
£m
180.1
6.3
13.6
–
2020
£000
35
221
8
Amounts paid to the Company’s auditor and their associates in respect of services to the Company, other than the audit of
the Company’s financial statements, have not been disclosed as the information is required instead to be disclosed on a
consolidated basis. The relevant proportion of amounts paid to the auditor for the audit of financial statements of joint ventures
is £0.015 million (2020 – £0.018 million).
All of the amounts in this note for 2021 are in respect of services provided by Ernst & Young LLP, with those in 2020 relating to
services provided by KPMG LLP.
Bellway p.l.c. Annual Report and Accounts 2021
134
Accounts 5. Earnings per ordinary share
Basic earnings per ordinary share is calculated by dividing earnings by the weighted average number of ordinary shares in issue
during the year (excluding the weighted average number of ordinary shares held by the Trust which are treated as cancelled).
Diluted earnings per ordinary share uses the same earnings figure as the basic calculation. The weighted average number of
shares has been adjusted to reflect the dilutive effect of outstanding share options allocated under employee share schemes
where the market value exceeds the option price. Diluted earnings per ordinary share is calculated by dividing earnings by the
diluted weighted average number of ordinary shares.
Reconciliations of the earnings and weighted average number of shares used in the calculations are outlined below:
Earnings
2021
£m
Weighted
average
number of
ordinary
shares
2021
Number
For basic earnings per ordinary share
390.7 123,306,035
Dilutive effect of options and awards
411,633
For diluted earnings per ordinary share
390.7
123,717,668
Taxation
6. Taxation
Taxation
Earnings
per share
Earnings
Weighted
average
number of
ordinary
shares
2020
Number
2020
£m
192.9
123,205,211
390,245
192.9
123,595,456
Earnings per
share
2020
p
156.6
(0.5)
156.1
2021
p
316.9
(1.1)
315.8
The charge for taxation is based on the result for the year and takes into account current and deferred taxation.
The charge is recognised in the income statement except to the extent that it relates to either items recognised in
equity in which case it is recognised in equity or other comprehensive income in which case it is recognised in other
comprehensive income.
Deferred taxation
Deferred taxation is provided for all temporary differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that the related tax benefit will be realised.
6a Income tax recognised in the income statement
Current tax expense:
UK corporation tax
Adjustments in respect of prior years
Deferred tax expense:
Origination and reversal of temporary differences
Increase in tax rate
Adjustments in respect of prior years
Total income tax expense in income statement
2021
£m
89.8
(2.8)
87.0
0.1
1.1
0.1
1.3
88.3
2020
£m
43.4
(0.2)
43.2
0.3
0.2
0.1
0.6
43.8
Bellway p.l.c. Annual Report and Accounts 2021
135
AccountsAccounts Notes to the Financial Statements continued
6. Taxation continued
Reconciliation of effective tax rate:
Profit before taxation
Tax calculated at UK corporation tax rate
Non-taxable income and enhanced deductions
Remeasurement of deferred tax due to increase in tax rate
Adjustments in respect of prior years – current tax
Effective tax rate and tax expense for the year
– deferred tax
2021
%
19.0
(0.2)
0.2
(0.6)
–
18.4
2021
£m
479.0
91.0
(1.1)
1.1
(2.8)
0.1
88.3
2020
%
19.0
(0.5)
–
–
–
18.5
2020
£m
236.7
45.0
(1.1)
–
(0.2)
0.1
43.8
The effective tax expense is 18.4% of profit before taxation (2020 – 18.5%) and compares favourably to the Group’s standard
tax rate for the year of 19.0% (2020 – 19.0%). The lower effective tax rate in the current year is principally due to enhanced tax
deductions received by the Group in relation to land remediation relief and the finalisation of the prior year corporation tax
returns.
6b Tax recognised in equity and other comprehensive income
Deferred tax recognised directly in equity and other comprehensive income:
(Charge)/credit relating to remeasurements on the defined benefit pension scheme
Charge relating to equity-settled transactions
6c Deferred taxation
2021
£m
(2.2)
–
2020
£m
0.3
(0.3)
The following are the deferred tax assets/(liabilities) recognised by the Group and the movements thereon during the current
and prior year:
Group
At 1 August 2019
Reclassification
Income statement (charge)/credit
Credit to statement of comprehensive
income
Charge to equity
At 31 July 2020
Arising on acquisition of joint operation
(note 14)
Income statement (charge)/credit
Charge to statement of comprehensive
income
At 31 July 2021
Capital
allowances
£m
Retirement
benefit assets
£m
Share-based
payments
£m
(0.1)
–
(0.4)
–
–
(0.5)
–
(0.6)
–
(1.1)
(0.5)
–
(0.1)
0.3
–
(0.3)
–
(0.1)
(2.2)
(2.6)
0.7
–
0.1
–
(0.3)
0.5
–
0.4
–
0.9
Inventory
£m
–
(1.6)
(0.2)
–
–
(1.8)
(1.7)
(1.0)
–
(4.5)
The following is an analysis of the deferred tax balances for financial reporting purposes:
Share-based payments
Deferred tax assets
Capital allowances
Retirement benefit assets
Inventory
Deferred tax liabilities
Net deferred tax liability
Bellway p.l.c. Annual Report and Accounts 2021
136
Other temporary
differences
£m
(1.6)
1.6
–
–
–
–
–
–
–
–
2021
£m
0.9
0.9
(1.1)
(2.6)
(4.5)
(8.2)
(7.3)
Total
£m
(1.5)
–
(0.6)
0.3
(0.3)
(2.1)
(1.7)
(1.3)
(2.2)
(7.3)
2020
£m
0.5
0.5
(0.5)
(0.3)
(1.8)
(2.6)
(2.1)
Accounts
6. Taxation continued
The carrying amount of the deferred tax asset is reviewed at each balance sheet date and is recognised to the extent that there
will be sufficient taxable profits to allow the asset to be recovered.
The deferred tax assets/(liabilities) held by the Group at the start of the current year have been revalued at the substantively
enacted corporation tax rate that will be effective when they are expected to be realised. An increase in the UK corporation tax
rate to 25% from 1 April 2023 has been announced and substantively enacted at the balance sheet date.
The deferred tax assets/(liabilities) held by the Group at the start of the comparative year were revalued from 17% to 19% to reflect
the repeal, in March 2020, of the planned corporation tax rate reduction.
There are no deferred tax balances in respect of the Company.
Working capital
7. Inventories
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost, in relation to work in progress and
showhomes, comprises direct materials and, where applicable, direct labour costs and those overheads, not
including any general administrative overheads, that have been incurred in bringing the inventories to their
present location and condition. Net realisable value represents the estimated selling price less all estimated costs of
completion and overheads.
Land held for development, including land in the course of development until legal completion of the sale of the
asset, is initially recorded at cost. Regular reviews are carried out to identify any impairment in the value of the land
by comparing the total estimated selling prices less estimated selling expenses against the book cost of the land plus
estimated costs to complete. A provision is made for any irrecoverable amounts. Where, through deferred payment
terms, the fair value of land purchased differs from the amount that will subsequently be paid in settling the liability,
the difference is charged as a finance expense in the income statement over the period to settlement.
Options purchased in respect of land are capitalised initially at cost. Regular reviews are carried out for impairment in
the value of these options and provisions made accordingly to reflect loss of value. The impairment reviews consider
the period elapsed since the date of purchase of the option given that the option contract has not been exercised
at the review date. Further, the impairment reviews consider the remaining life of the option, taking account of any
concerns over whether the remaining time available will allow a successful exercise of the option. The carrying cost
of the option at the date of exercise is included within the cost of land purchased as a result of the option exercise.
Investments in land without the benefit of planning consent, either through the purchase of land or non-refundable
deposits paid on land purchase contracts subject to planning consent, are included initially at cost. Regular reviews
are carried out for impairment in the values of these investments and provision made to reflect any irrecoverable
element. The impairment reviews consider the existing use value of the land and assess the likelihood of achieving
planning consent and the value thereof.
Carrying amount of land held for development and work in progress
Inventories are carried at the lower of cost and net realisable value. Net realisable value represents the estimated
selling price (in the ordinary course of business) less all estimated costs of completion and overheads. Valuations of
site/phase work in progress are carried out at regular intervals and estimates of the cost to complete a site/phase
and estimates of anticipated revenues are required to enable a development profit to be determined. Management
are required to employ judgement in estimating the profitability of a site/phase and in assessing any impairment
provisions which may be required. If a 10% increase was applied to the inventories net realisable provision, this would
not have a material effect on the carrying value of work in progress and land held for development at the year end.
For both the years ended 31 July 2021 and 31 July 2020, a full review of inventories has been performed and write
downs have been made where cost exceeds net realisable value. Estimated selling prices have been reviewed on a
site by site/phase by phase basis and have been amended based on local management and the Board’s assessment
of current market conditions. For the year ended 31 July 2021 no exceptional charge resulted from the review. For the
year ended 31 July 2020, an exceptional item has been recognised related to the impairment of work in progress and
land held for development, further detail is given in note 2.
Bellway p.l.c. Annual Report and Accounts 2021
137
AccountsAccounts Notes to the Financial Statements continued
7. Inventories continued
Group
Land
Work in progress
Showhomes
Part-exchange properties
2021
£m
2,483.9
1,431.4
115.1
1.8
2020
£m
2,216.2
1,496.1
124.6
26.1
4,032.2
3,863.0
Inventories of £2,421.1 million were expensed in the year (2020 – £1,780.7 million), including exceptional land and work in
progress impairments of £nil (2020 – £24.4 million) (note 2).
In the ordinary course of business, inventories have been written off by a net £1.5 million in the year (2020 – £3.5 million).
Land with a carrying value of £278.9 million (2020 – £242.7 million) was used as security for land payables (note 9).
Land includes £1,808.4 million (2020 – £1,743.3 million) which is owned or unconditionally contracted by the Group and where
there is an implementable detailed planning permission.
During the year, the Group acquired 100% of the share capital of two private limited companies to access a land interest of
£19.8 million. These acquisitions did not satisfy the requirements of the business combination, the land relating to this amount is
included in ‘land’ in the above table.
The adoption of the Future Homes Standard in 2025 is not considered to have a material effect on the carrying value of
inventories as at 31 July 2021.
The Directors consider all inventories to be essentially current in nature although the Group’s operational cycle is such that
a proportion of inventories will not be realised within 12 months. It is not possible to determine with accuracy when specific
inventory will be realised as this is subject to a number of factors including consumer demand and planning permission delays.
The Company has no inventory.
8. Trade and other receivables
Trade and other receivables
Trade and other receivables are stated at their fair value at the date of initial recognition and subsequently at
amortised cost less allowances for impairment. Amounts recoverable on certain social housing contracts where
revenue is recognised over time are included in trade receivables to the extent that they have been invoiced,
or if not they are included within prepayments and accrued income, and are stated as the amount due less any
foreseeable losses.
The loss allowance for amounts owed by Group undertakings is equal to the 12-month expected credit losses
unless there has been a significant increase in credit risk since the date of initial recognition, in which case the loss
allowance is equal to the lifetime expected credit loss. A significant increase in credit risk is deemed to have occurred
if a review of available information indicates an increased probability of default.
Current receivables
Trade receivables
Other receivables
Amounts owed by Group undertakings
Prepayments and accrued income
Group
2021
£m
17.0
58.1
–
7.1
82.2
Group
2020
£m
32.3
32.5
–
5.1
69.9
Company
2021
£m
Company
2020
£m
–
–
512.3
–
512.3
–
–
432.8
–
432.8
The Group assesses the ageing of trade receivables in accordance with the policy on page 53. None of the trade receivables
are past their due dates (2020 – nil), and are therefore all rated as low risk.
Other receivables includes £38.6 million (2020 – £14.5 million) in relation to VAT recoverable and £0.5 million (2020 – £nil) of
reimbursement assets (note 10).
The Group has assessed expected credit losses and the loss allowance for trade and other receivables as immaterial.
The Company has assessed expected credit losses and the loss allowance for amounts owed by Group undertakings as
immaterial.
Bellway p.l.c. Annual Report and Accounts 2021
138
Accounts 9. Trade and other payables
Trade and other payables
Trade and other payables on normal terms are not interest-bearing and are stated at their nominal value. Trade
payables on deferred terms, most notably in relation to land purchases, are recorded initially at the fair value of all
expected future payments. The discount to nominal value is amortised over the period to settlement and charged to
finance expenses.
Leases
The lease liability is initially measured at the present value of the remaining lease payments, discounted using the
Group’s incremental borrowing rate. The lease term comprises the non-cancellable period of the contract, together
with periods covered by an option to extend the lease where the Group is reasonably certain to exercise that
option. Subsequently, the lease liability is measured by increasing the carrying amount to reflect interest on the lease
liability, and reducing it by the lease payments made. The lease liability is remeasured when the Group changes its
assessment of whether it will exercise an extension or termination option.
Right-of-use assets are initially measured at cost, comprising the initial measurement of the lease liability, plus any
initial direct costs and an estimate of asset retirement obligations, less any lease incentives. Subsequently, right-of-use
assets are measured at cost, less any accumulated depreciation and any accumulated impairment losses, and are
adjusted for certain remeasurements of the lease liability. Depreciation is calculated on a straight-line basis over the
length of the lease.
The Group has elected to apply exemptions for short-term leases and leases for which the underlying asset is of low
value. For these leases, payments are charged to the income statement on a straight-line basis over the term of the
relevant lease.
Right-of-use assets are presented in property, plant and equipment on the balance sheet and lease liabilities are
shown on the balance sheet in trade and other payables in current liabilities and non-current liabilities.
Payments on account
Payments on account, measured at amortised cost, are recorded as a liability on receipt and are released to the
income statement when revenue is recognised in accordance with the Group’s revenue recognition policy.
Non-current liabilities
Land payables
Lease liabilities
Group
2021
£m
75.4
14.3
89.7
Group
2020
£m
117.1
14.1
131.2
Company
2021
£m
Company
2020
£m
–
–
–
–
–
–
Land payables of £48.7 million (2020 – £82.0 million) are secured on the land to which they relate.
The carrying value of the land used for security is £48.1 million (2020 – £80.6 million).
Current liabilities
Trade payables
Land payables
Social security and other taxes
Other payables
Lease liabilities
Accrued expenses
Payments on account
Group
2021
£m
324.3
380.4
5.6
9.8
2.9
133.1
185.0
1,041.1
Group
2020
£m
273.0
226.5
5.0
12.1
3.0
92.4
222.0
834.0
Company
2021
£m
Company
2020
£m
–
–
–
0.2
–
–
–
0.2
–
–
–
0.3
–
–
–
0.3
Land payables of £234.4 million (2020 – £165.6 million) are secured on the land to which they relate.
The carrying value of the land used for security is £230.8 million (2020 – £162.1 million).
Bellway p.l.c. Annual Report and Accounts 2021
139
AccountsAccounts Notes to the Financial Statements continued
9. Trade and other payables continued
Payments on account comprises deposits received in advance which are contract liabilities. Deposits received in advance are
typically held for up to 18 months before the associated performance obligations are satisfied and the revenue is recognised.
The majority of the contract liabilities as at 31 July 2020 have been recognised as revenue in the current year. The approximate
transaction value allocated to the performance obligations that are unsatisfied at 31 July 2021 is £2,022.3 million (2020 – £1,760.2
million), the majority of which is expected to be recognised as revenue during the next financial year.
10. Provisions and reimbursement assets
Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past
transaction or event, and it is probable that the Group will be required to settle that obligation. Provisions are
measured at the Directors best estimate of the expenditure required to settle the obligation at the balance sheet date
and are discounted to the present value where the effect is material.
Legacy building safety improvements
The Directors consider that their assessment and judgement of the legacy building safety improvements provision, in
accordance with the Group’s accounting policies, could have a significant effect on the Group’s financial statements.
The Directors have established whether any remedial works are required to be performed on certain sites and if so,
has then assessed whether there is a legal or constructive obligation at the balance sheet date. A legal obligation,
assessed on a site by site basis, is present if Bellway is the responsible person for the site or if the building was
constructed within a specified time period. A constructive obligation is present if Bellway has communicated to the
involved parties (such as residents and building owners) that it will undertake the remedial works. If the Group has
identified that it has a legal or constructive obligation then a provision has been recognised for the latest estimated
cost of the remedial works.
This is a highly complex area with judgements in respect of the extent of those properties within the scope of
Bellway’s legacy building safety improvement provision and the provision could be extended should the latest
interpretation of Government guidance further evolve (note 25).
Legacy building safety improvements
The legacy building safety improvements provision has been established to carry out remedial corrective works
on a number of schemes. Management have estimated the cost of the corrective works for the current anticipated
scope, but this is inherently uncertain as the improvement works are at an early stage on most affected sites. These
estimates may change over time as further information is assessed, building works progress and the interpretation
of fire safety regulations further evolve. If costs in the provision are understated by 10%, operating profit in the period
would reduce by around 2%.
Group
At 1 August 2020
Additions (note 2)
Released (note 2)
Utilised/(recovered)
At 31 July 2021
The provision is classified as follows:
Current
Non-current
Total
Legacy
building safety
improvements
provision
£m
Reimbursement
assets
£m
(70.3)
(69.6)
2.7
21.2
(116.0)
–
15.1
–
(14.6)
0.5
Total
£m
(70.3)
(54.5)
2.7
6.6
(115.5)
Legacy building
safety
improvements
provision
£m
(27.0)
(89.0)
(116.0)
The Group has established a provision for the cost of performing fire remedial works on a number of legacy developments
(note 2). The timing of the provision is uncertain, so it has not been discounted.
The Company has no provisions.
Bellway p.l.c. Annual Report and Accounts 2021
140
Accounts Business combinations and other investing activities
11. Property, plant and equipment
Property, plant and equipment
Items are stated at cost less accumulated depreciation and impairment losses. Depreciation on property, plant and
equipment is charged to the income statement on a straight-line basis over their estimated useful lives over the
following number of years:
• Plant, fixtures and fittings – 3 to 10 years.
• Freehold buildings – 40 years.
Freehold land is not depreciated.
Right-of-use assets
The accounting policy for leases is included in note 9.
Group
Cost
At 1 August 2019
Additions
Disposals
Transfer to inventories
At 1 August 2020
Additions
Disposals
At 31 July 2021
Depreciation
At 1 August 2019
Charge for year
On disposals
Transfer to inventories
At 1 August 2020
Charge for year
On disposals
At 31 July 2021
Net book value
At 31 July 2021
At 31 July 2020
At 31 July 2019
The Company has no property, plant and equipment.
Land and
property
£m
11.2
6.8
–
(0.5)
17.5
0.3
(1.2)
16.6
2.7
0.4
–
(0.1)
3.0
0.4
(0.5)
2.9
13.7
14.5
8.5
Plant,
fixtures
and fittings
£m
17.6
1.5
(1.0)
–
18.1
3.0
(3.8)
17.3
10.3
2.4
(0.9)
–
11.8
2.6
(3.7)
10.7
6.6
6.3
7.3
Right-of-use
assets
£m
17.3
5.5
(0.8)
–
22.0
3.2
(1.5)
23.7
3.3
3.5
(0.7)
–
6.1
3.5
(1.3)
8.3
15.4
15.9
14.0
Total
£m
46.1
13.8
(1.8)
(0.5)
57.6
6.5
(6.5)
57.6
16.3
6.3
(1.6)
(0.1)
20.9
6.5
(5.5)
21.9
35.7
36.7
29.8
Bellway p.l.c. Annual Report and Accounts 2021
141
AccountsAccounts Notes to the Financial Statements continued
12. Financial assets and equity accounted joint arrangements, and investments in subsidiaries
Investments in subsidiaries
Interests in subsidiary undertakings are valued in the Company financial statements at cost less impairment.
The subsidiary undertakings and joint arrangements in which the Group has interests are incorporated in England and Wales. In
each case their principal activity is related to housebuilding. At the 31 July 2021, the Group was made up of 31 subsidiaries and 7
joint arrangements. Further details are included in note 27.
Where Bellway owns 100% of the voting rights of a business, the company is considered to be controlled by Bellway and is
treated as a subsidiary.
The Group and Company have the following investments or financial assets in subsidiaries and joint ventures:
Subsidiary undertakings
Interest in subsidiary undertakings’ shares at cost
Financial assets and equity accounted joint arrangements
Financial assets – loan to joint ventures
Interest in joint ventures – equity
Group
2021
£m
–
39.6
15.7
55.3
Group
2020
£m
–
55.5
5.3
60.8
Company
2021
£m
40.4
Company
2020
£m
37.8
–
–
–
–
–
–
55.3
60.8
40.4
37.8
During the year ended 31 July 2021, subsidiary undertakings in the Company were impaired by £5.7 million following an exercise
to dissolve several dormant companies across the Group. This movement was offset by the share-based payment charge of £2.1
million.
The movement on both the equity accounted joint ventures and related financial assets during the year is as follows:
At the start of the year
Increase in loans
Repayment of loans
Share of result
At the end of the year
2021
£m
60.8
17.1
(33.0)
10.4
55.3
2020
£m
49.9
9.9
–
1.0
60.8
13. Joint arrangements
DFE TW Residential Limited, Cramlington Developments Limited and Leebell Developments Limited are classified as joint
operations as the shareholders have substantially all of the economic benefit of the assets and fund the liabilities of the entities.
Ponton Road LLP, Fradley Residential LLP, Lambeth Regeneration LLP and Bellway Latimer Cherry Hinton LLP are classified as
joint ventures as the Group has rights to the net assets of the arrangements rather than the individual assets and liabilities.
Bellway Latimer Cherry Hinton LLP was incorporated during the year ended 31 July 2021.
Bellway p.l.c. Annual Report and Accounts 2021
142
Accounts 13. Joint arrangements continued
The Group’s share of the joint ventures’ net assets/(liabilities) and income/(expenses) are made up as follows:
Other joint
ventures
Total
Ponton
Road
LLP
Fradley
Residential
LLP
Other joint
ventures
2020
Ponton
Road
LLP
Fradley
Residential
LLP
£m
36.6
(27.4)
–
£m
10.0
(2.5)
(0.7)
2021
Bellway
Latimer
Cherry
Hinton
LLP
£m
41.7
(23.2)
(18.8)
£m
1.9
(1.9)
–
£m
90.2
(55.0)
(19.5)
£m
70.0
(69.5)
(0.5)
Current assets
Current liabilities
Non-current liabilities
Share of net
assets/liabilities) of
joint ventures
Revenue
Costs
Operating profit
Interest
Share of result of
joint ventures
9.2
6.8
(0.3)
–
15.7
54.9
(45.7)
9.2
–
9.2
7.7
(6.1)
1.6
(0.1)
1.5
–
–
–
(0.3)
(0.3)
–
–
–
–
–
62.6
(51.8)
10.8
(0.4)
10.4
–
–
–
–
0.1
0.1
Total
£m
79.3
(71.0)
(3.0)
5.3
4.3
(3.3)
1.0
–
1.0
£m
8.2
(1.3)
(1.6)
5.3
4.3
(3.3)
1.0
(0.1)
0.9
£m
1.1
(0.2)
(0.9)
–
–
–
–
–
–
Guarantees relating to the overdrafts of the joint arrangements have been given by the Company (see note 25).
The Group has assessed expected credit losses and the loss allowance for joint venture financial assets as immaterial.
14. Acquisition of joint arrangement
The Group acquired 50% of the ordinary share capital of DFE TW Residential Limited (“DFE”) on 22 January 2021 for £8.9 million
cash consideration solely to access a land interest which was immediately transferred to both shareholders of DFE. As part of
the acquisition of DFE there was no transfer of trade, nor any transfer of employees. DFE progressed its land interest through
the planning process prior to acquisition and therefore the Group concluded DFE satisfied the definition of a business. As the
shareholders of DFE have substantially all of the economic benefit of the assets and fund the liabilities of DFE, this entity is
deemed to be a joint operation.
The Group incurred acquisition-related expenses of £0.4 million on legal fees and due diligence costs. These costs have been
included in ‘cost of sales’ in the period.
The following table summarises the fair value of assets acquired and liabilities assumed at the date of acquisition:
Inventories
Corporation tax liability
Deferred tax liabilities
Trade and other payables
Total identifiable net assets acquired
The valuation technique used for measuring the fair value of the material asset acquired is as follows:
Assets acquired
Inventories
Valuation technique
The fair value was determined as the estimated market value.
£m
13.7
(0.1)
(1.7)
(3.0)
8.9
Bellway p.l.c. Annual Report and Accounts 2021
143
AccountsAccounts Notes to the Financial Statements continued
14. Acquisition of joint arrangement continued
If new information, obtained within one year of the date of acquisition, about facts and circumstances that existed at the date of
acquisition identifies adjustments to the above amounts, then the accounting for the acquisition will be revised.
No goodwill arose on the acquisition as the consideration transferred was equal to the total identifiable net assets acquired.
Following the acquisition by the Group, the following has been recognised in the income statement for the year ended 31 July
2021:
Revenue
Cost of sales
Administrative expenses
Income tax expense
Loss for the year
15. Commitments
Capital commitments
Group
Contracted not provided
Authorised not contracted
Company
The commitments of the Company were £nil (2020 – £nil).
£m
3.0
(3.0)
0.1
(0.2)
(0.1)
2020
£m
1.4
–
2021
£m
0.5
–
Bellway p.l.c. Annual Report and Accounts 2021
144
Accounts Financing
16. Net cash
Cash and cash equivalents
Cash and cash equivalents are defined as cash balances in hand and in the bank (including short-term cash
deposits). The Group utilises bank overdraft facilities, which are repayable on demand, as part of its cash
management policy. As a consequence, bank overdrafts are included as a component of net cash and cash
equivalents within the cash flow statement.
Interest-bearing loans and borrowings
Interest-bearing loans and borrowings are stated at their fair value at the date of initial recognition and subsequently
at amortised cost.
16a Reconciliation of net cash flow to net cash
Group
Increase/(decrease) in net cash and cash equivalents
Decrease/(increase) in bank borrowings
Increase in fixed rate sterling USPP notes
Increase/(decrease) in net cash from cash flows
Net cash at 1 August
Net cash at 31 July
Company
Increase/(decrease) in net cash and cash equivalents
Increase/(decrease) in net cash from cash flows
Net cash at 1 August
Net cash at 31 July
16b Analysis of net cash
Group
Cash and cash equivalents
Bank loans
Fixed rate sterling USPP notes
Net cash
Company
Cash and cash equivalents
Net cash
2021
£m
408.9
50.0
(130.0)
328.9
1.4
330.3
2021
£m
0.1
0.1
52.7
52.8
Cash
flows
£m
408.9
50.0
(130.0)
328.9
Cash
flows
£m
0.1
0.1
2020
£m
(149.8)
(50.0)
–
(199.8)
201.2
1.4
2020
£m
(0.1)
(0.1)
52.8
52.7
At 31 July
2021
£m
460.3
–
(130.0)
330.3
At 31 July
2021
£m
52.8
52.8
At 1 August
2020
£m
51.4
(50.0)
–
1.4
At 1 August
2020
£m
52.7
52.7
Bellway p.l.c. Annual Report and Accounts 2021
145
AccountsAccounts Notes to the Financial Statements continued
17. Finance income and expenses
Finance income and expenses
Finance income includes interest receivable on bank deposits.
Finance expenses includes interest on bank borrowings and fixed rate sterling USPP notes. The discounting of the
deferred payments for land purchases produces a notional interest payable amount and this is also charged to
finance expenses.
Interest receivable on bank deposits
Other interest receivable
Finance income
Interest payable on bank loans and overdrafts
Interest payable on fixed rate sterling USPP notes
Interest on deferred term land payables
Interest payable on leases
Finance expenses
18. Financial Instruments
Land purchased on deferred terms
2021
£m
–
0.6
0.6
3.1
1.6
6.5
0.5
11.7
2020
£m
0.2
–
0.2
6.2
–
6.9
0.5
13.6
The Group sometimes acquires land on deferred payment terms. In accordance with IFRS 9 ‘Financial Instruments’
the creditor is initially recorded at fair value, being the price paid for the land discounted to present day, and
subsequently at amortised cost. The difference between the nominal value and the initial fair value is amortised
over the deferred term to finance expenses, increasing the land creditor to its full cash settlement value on the
payment date.
The maturity profile of the total contracted cash payments in respect of amounts due on land creditors at the balance sheet
date is as follows:
At 31 July 2021
At 31 July 2020
Balance at
31 July
£m
Total contracted
cash payment
£m
Within 1 year or
on demand
£m
455.8
343.6
459.7
350.0
382.3
228.3
1–2
years
£m
67.0
98.4
2–5
years
£m
10.4
23.3
More than
5 years
£m
–
–
The maturity profile of the total contracted payments in respect of financial liabilities (excluding amounts due on land creditors
shown separately above) is as follows:
Trade and other payables (excluding
lease liabilities)
Fixed rate sterling USPP notes
Lease liabilities
At 31 July 2021
Trade and other payables
(excluding lease liabilities)
Bank loans – floating rates
Lease liabilities
At 31 July 2020
Balance at
31 July
£m
Total contracted
cash payment
£m
Within 1 year or
on demand
£m
334.1
130.0
17.2
481.3
285.1
50.0
17.1
352.2
334.1
156.6
19.1
509.8
285.1
50.1
19.3
354.5
334.1
3.4
3.4
340.9
285.1
50.1
3.4
338.6
1–2
years
£m
–
3.4
2.9
6.3
–
–
3.1
3.1
2–5
years
£m
–
10.3
7.2
17.5
–
–
6.1
6.1
More than
5 years
£m
–
139.5
5.6
145.1
–
–
6.7
6.7
The imputed interest rate on land payables reflects market interest rates available to the Group on floating rate bank loans at the
time of acquiring the land.
At the year end, the Group had £420.0 million (2020 – £495.0 million) of undrawn bank facilities available.
Bellway p.l.c. Annual Report and Accounts 2021
146
Accounts 18. Financial Instruments continued
Cash and cash equivalents
This comprises cash held by the Group and short-term bank deposits with a maturity date of less than one month.
The amount of cash and cash equivalents for the years ended 31 July 2021 and 31 July 2020 for both the Group and the
Company are shown in note 16.
At 31 July 2021 the average interest rate earned on the temporary closing cash balance, excluding joint ventures, was 0.02%
(2020 – 0.06%).
Fair values
The carrying values of financial assets and liabilities reasonably approximate their fair values.
Financial assets and liabilities by category
Loans and receivables
Cash and cash equivalents
Financial liabilities at amortised cost
Reconciliation of liabilities arising from financing activities
Group
2021
£m
114.7
460.3
(937.1)
(362.1)
Group
2020
£m
120.3
51.4
(695.8)
(524.1)
Company
2021
£m
512.3
52.8
(0.2)
564.9
Bank borrowings
Fixed rate sterling USPP notes
Lease liabilities
At 1 August
2020
£m
50.0
–
17.1
67.1
Net cash flows
New leases
Disposals
Interest
£m
(50.0)
130.0
(3.4)
76.6
£m
–
–
3.2
3.2
£m
–
–
(0.2)
(0.2)
£m
–
–
0.5
0.5
Company
2020
£m
432.8
52.7
(0.3)
485.2
At 31 July
2021
£m
–
130.0
17.2
147.2
There were no liabilities arising from financing activities within the Company.
Bank facilities
The Group had bank facilities of £420.0 million as at 31 July 2021 (2020 – £545.0 million) which expire during the course of the
following financial years:
By 31 July 2021
By 31 July 2022
By 31 July 2023
By 31 July 2024
Group
2021
£m
–
125.0
50.0
245.0
420.0
Group
2020
£m
175.0
125.0
50.0
195.0
545.0
Company
2021
£m
Company
2020
£m
–
–
–
–
–
–
–
–
–
–
These facilities have subsequently reduced to £370.0 million at 24 September 2021, with tranches expiring up to December 2025,
as part of planned business as usual bank refinancing.
Fixed rate sterling USPP notes
During the year the Group entered a contractual arrangement to issue fixed rate sterling USPP notes for a total amount of £130.0
million, as part of its ordinary course of business financing arrangements. This USPP debt has a weighted average fixed coupon
of 2.7%, is fully drawn down at year end and expires during the course of the following financial years:
By 31 July 2028
By 31 July 2031
Group
2021
£m
80.0
50.0
130.0
Group
2020
£m
Company
2021
£m
Company
2020
£m
–
–
–
–
–
–
–
–
–
Bellway p.l.c. Annual Report and Accounts 2021
147
AccountsAccounts Notes to the Financial Statements continued
18. Financial Instruments continued
Capital management
The Group is financed through the proceeds of issued ordinary shares, reinvested profits and cash in hand less debt.
The following table analyses the capital structure:
Equity
Net debt
Capital employed
Risks
Group
2021
£m
Group
2020
£m
3,287.8
2,994.0
–
–
3,287.8
2,994.0
Company
2021
£m
605.3
–
605.3
Company
2020
£m
523.0
–
523.0
Details of the risks relating to financial instruments are set out in the Risk Management section on pages 52 to 55.
Shareholder capital
19. Issued capital
Classification of equity instruments and financial liabilities issued by the Group
Equity instruments issued by the Group are treated as equity only to the extent that they meet the following
two conditions:
(a) they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or
other financial assets or to exchange financial assets or financial liabilities with another party under conditions that
are potentially unfavourable to the Company (or Group); and
(b) where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative
that includes no obligation to deliver a variable number of the Company’s own equity instruments or is a derivative
that will be settled by the Company’s exchanging a fixed amount of cash or other financial assets for a fixed
number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the
instrument so classified takes the legal form of the Company’s own shares, the amounts presented in these financial
statements for called up share capital and share premium exclude amounts in relation to those shares.
Group and Company
Allotted, called up and fully paid 12.5p ordinary shares
At start of year
Issued on exercise of options
At end of year
2021
Number
000
123,346
50
123,396
2021
£m
15.4
–
15.4
2020
Number
000
123,168
178
123,346
2020
£m
15.3
0.1
15.4
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company.
20. Reserves
Own shares held by ESOP trust
Transactions of the Company-sponsored ESOP trust are included in both the Group financial statements and the
Company’s own financial statements. The purchase of shares in the Company by the trust are charged directly
to equity.
Share premium
This reserve is not distributable.
Own shares held
The Group and Company holds shares within the Bellway Employee Share Trust (1992) (the ‘Trust’) for participants of certain
share-based payment schemes as outlined in note 24. The cost of these is charged to retained earnings. During the period
105,967 shares were purchased by the Trust (2020 – nil shares) and the Trust transferred 47,923 (2020 – 20,820) shares to
employees and Directors. The number of shares held within the Trust and on which dividends have been waived, at 31 July 2021
was 101,853 (2020 – 43,809). These shares are held within the financial statements at a cost of £2.4 million (2020 – £1.0 million).
The market value of these shares at 31 July 2021 was £3.3 million (2020 – £1.1 million).
Bellway p.l.c. Annual Report and Accounts 2021
148
Accounts 20. Reserves continued
Capital redemption reserve
On 7 April 2014 the Company redeemed 20,000,000 £1 preference shares, being all of the preference shares in issue. An amount
of £20.0 million, equivalent to the nominal value of the shares redeemed, was transferred to a capital redemption reserve on the
same date. This reserve is not distributable.
21. Dividends on equity shares
Dividends
Dividends on equity shares are recognised as a liability in the period in which they are approved by the shareholders.
Interim dividends are recognised when paid.
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 July 2020 of 50.0p per share (2019 – 100.0p)
Interim dividend for the year ended 31 July 2021 of 35.0p per share (2020 – nil per share)
Proposed final dividend for the year ended 31 July 2021 of 82.5p per share (2020 – 50.0p)
2021
£m
61.6
43.1
104.7
101.7
2020
£m
123.1
–
123.1
61.7
The 2021 proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 6 December
2021 and, in accordance with IAS 10 ‘Events after the Reporting Period’, has not been included as a liability in these financial
statements. At the record date for the final dividend for the year ended 31 July 2020, shares were held by the Bellway Employee
Share Trust (1992) (the ‘Trust’) on which dividends had been waived (see note 20).
The level of distributable reserves are sufficient in comparison to the proposed dividend.
Directors and employees
22. Employee information
Group employment costs, including directors, comprised:
Wages and salaries
Social security
Pension costs (note 23)
Share-based payments (note 24)
2021
£m
159.9
15.9
6.0
2.6
184.4
2020
£m
155.2
16.6
6.2
2.1
180.1
The average number of persons employed by the Group during the year was 2,934 (2020 – 3,119) comprising 1,063 (2020 – 1,085)
administrative and 1,871 (2020 – 2,034) production and others employed in housebuilding and associated trading activities.
The Executive Directors and the Group General Counsel and Company Secretary are the only employees of the Company and
the emoluments of the Executive Directors are disclosed in the Report of the Board on Directors’ Remuneration on pages 90 to
110.
Key management personnel remuneration, including directors, comprised:
Salaries and fees
Taxable benefits
Annual cash bonus
Pension costs
Share-based payments
2021
£m
2.9
0.2
2.5
0.1
1.2
6.9
2020
£m
2.9
0.2
–
0.1
1.0
4.2
Key management personnel, as disclosed under IAS 24 ‘Related party disclosures’, comprises the Directors and other senior
operational management.
Bellway p.l.c. Annual Report and Accounts 2021
149
AccountsAccounts Notes to the Financial Statements continued
23. Retirement benefit asset
Employee benefits – retirement benefit costs
The net defined benefit scheme asset or liability is the fair value of scheme assets less the present value of the
defined benefit obligation at the balance sheet date. The calculation is performed by a qualified actuary using the
projected unit credit method. All remeasurement gains and losses are recognised immediately in the Statement of
Comprehensive Income (‘SOCI’). Net interest income/(cost) is calculated on the defined benefit asset/(liability) for the
period by applying the discount rate used to measure the defined benefit liability at the start of the year. Return on
plan assets in excess of the amounts included in the net interest cost are recognised in the SOCI.
Defined contribution pension costs are charged to the income statement in the period for which contributions
are payable.
(a) Retirement benefit assets
The Group sponsors the Bellway plc 1972 Pension Scheme (the ‘Scheme’) which has a funded final salary defined benefit
arrangement which is closed to new members and to future service accrual. The Group also sponsors the Bellway plc 2008
Group Self Invested Personal Pension Plan (‘GSIPP’) which is a defined contribution contract-based arrangement.
Contributions of £6.0 million (2020 – £6.2 million) were charged to the income statement for the GSIPP.
(b) Role of Trustees
The Scheme is managed by the Trustees, who are appointed by either the Company or the members. The role of the Trustees
is to manage the Scheme in line with the Scheme trust deed and rules, to act prudently, responsibly and honestly, impartially
and in the interests of all beneficiaries. The main responsibilities of the Trustees are to agree with the employer the level of
contributions to the Scheme and to make sure these are paid, to decide how the Scheme’s assets are invested so the Scheme
is able to meet its liabilities, and to oversee that the payment of benefits, record keeping and administration of the Scheme
complies with the Scheme trust deed and rules and legislation.
(c) Funding
UK legislation requires that pension schemes are funded prudently (i.e. to a level in excess of the current expected cost of
providing benefits). The last full actuarial valuation of the Scheme was carried out by a qualified independent actuary as at
31 July 2017 and updated on an approximate basis to 31 July 2021.
With regard to the Scheme, regular contributions made by the employer over the financial year were £nil (2020 – £nil).
The employer paid nil special contributions (2020 – £nil) and reimbursed the pension fund £0.4 million (2020 – £0.3 million) for
expenses incurred by the fund.
The Group is expected to make no regular contributions during the year ending 31 July 2022.
(d) Regulation
The UK pensions market is regulated by the Pensions Regulator whose key statutory objectives in relation to UK defined benefit
plans are:
• to protect the benefits of members of occupational pension schemes;
• to promote, and to improve understanding of the good administration of work-based pension schemes;
• to reduce the risk of situations arising which may lead to compensation being payable from the Pension Protection Fund; and
• to maximise employer compliance with employer duties and the employment safeguards introduced by the Pensions Act 2008.
(e) Risk
The Scheme exposes the Group to a number of risks, the most significant are:
Risk
Description
Asset volatility
Inflation risk
The Scheme’s defined benefit obligation is calculated using a discount rate set with reference to corporate
bond yields. However, a significant proportion of the Scheme’s assets are invested in growth assets, such
as equities, that would be expected to outperform corporate bonds in the long-term but create volatility
and risk in the short-term.
A significant proportion of the Scheme’s defined benefit obligation is linked to inflation, with higher
inflation increasing the liabilities. However, there are caps of either a 3% or 5% p.a. increase in place to limit
the effect of higher inflation.
Life expectancy
The majority of the Scheme’s liabilities are to provide a pension for the life of the member, with any
increase in life expectancy also increasing the Scheme’s defined benefit obligation.
Bellway p.l.c. Annual Report and Accounts 2021
150
Accounts 23. Retirement benefit asset continued
The Group and Trustees have agreed a long-term strategy for reducing investment risk as and when appropriate. This includes
liability driven investment funds which invest in assets such as gilts, swaps and repurchase agreements. The purpose of the
liability driven investment funds is to significantly reduce the volatility of the Plan’s funding level by mitigating inflation and
interest rate risks, as the liability driven investment funds match the movements in interest rates and inflation closely.
Movements in net defined benefit assets
Defined benefit obligation
Fair value of Scheme assets
Net defined benefit asset
Balance at 1 August
Included in the income statement
Interest (expense)/income
Included in other comprehensive
income/(expense)
Remeasurement gain/(loss) arising from:
– Change in demographic and
financial assumptions
– Experience adjustments
Return on plan assets excluding
interest income
Other
Contributions paid by the employer
Benefits paid
2021
£m
(66.6)
(1.1)
(1.1)
2.6
–
–
2.6
–
1.5
1.5
2020
£m
(62.3)
(1.3)
(1.3)
(5.4)
(0.2)
–
(5.6)
–
2.6
2.6
Balance at 31 July
(63.6)
(66.6)
2021
£m
67.9
1.1
1.1
–
–
5.9
5.9
0.4
(1.5)
(1.1)
73.8
2020
£m
65.1
1.3
1.3
–
–
3.8
3.8
0.3
(2.6)
(2.3)
67.9
2021
£m
1.3
–
–
2.6
–
5.9
8.5
0.4
–
0.4
10.2
2020
£m
2.8
–
–
(5.4)
(0.2)
3.8
(1.8)
0.3
–
0.3
1.3
The weighted average duration of the defined benefit obligation at the end of the reporting period is 17 years (2020 – 18 years).
Scheme assets
The fair value of the Scheme assets is:
Diversified growth fund
Equity instruments
Government bonds
Corporate bonds
Liability driven instruments
Insurance policies annuities
Cash and cash equivalents
Total
2021
£m
25.7
2.4
11.6
5.7
20.3
7.8
0.3
73.8
2020
£m
28.6
2.8
–
4.9
23.6
8.0
–
67.9
All of the Scheme assets, with the exception of cash and cash equivalents, are considered to be level 2. None of the assets have
a quoted market price in an active market.
Diversified growth funds are pooled funds invested across a diversified range of assets with the aim of giving long-term
investment growth with lower short-term volatility than equities.
Bellway p.l.c. Annual Report and Accounts 2021
151
AccountsAccounts Notes to the Financial Statements continued
23. Retirement benefit asset continued
Actuarial assumptions
The following are the principal actuarial assumptions at the reporting date:
Discount rate
Future salary increases
Allowance for pension in payment increases of RPI or 5% p.a. if less
Allowance for deferred pension increases of CPI or 3% p.a. if less
2021
% per annum
2020
% per annum
1.70
3.60
3.00
2.10
1.50
3.40
2.80
2.00
Allowance for commutation of pension for cash at retirement
15% of pension
50% of maximum
The mortality assumptions adopted at 31 July 2021 are based on the S3PxA tables and allow for future improvement in mortality.
The tables used imply the following life expectancies at age 65:
Male retiring in 2021
Female retiring in 2021
Male retiring in 2041
Female retiring in 2041
22.7 years
24.5 years
24.0 years
26.0 years
The mortality assumptions adopted at 31 July 2020 were based on the S3PxA tables and allow for future improvement in
mortality. The tables used imply the following life expectancies at age 65:
Male retiring in 2020
Female retiring in 2020
Male retiring in 2040
Female retiring in 2040
Sensitivities
22.9 years
24.6 years
24.2 years
26.1 years
The calculation of the defined benefit obligation is sensitive to the assumptions set out above. The following table summarises
the effect on the defined benefit obligation at the end of the reporting period if different assumptions were used:
Assumption
Discount rate
Inflation – RPI
Mortality
Change in assumption
Change in liabilities (%)
+0.10% p.a.
+0.10% p.a.
+1 year life expectancy
Decrease by 1.6
Increase by 1.3
Increase by 5.0
The calculations for the sensitivity analysis are not as accurate as a full valuation carried out using these assumptions. Each assumption
change is considered in isolation, which in practice is unlikely to occur, as changes in some of the assumptions are correlated.
24. Share based payments
Employee benefits – share-based payments
The fair value of equity settled share options granted is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured as at the date the options are granted and the charge is only amended
if vesting does not take place due to non-market conditions not being met. Various option pricing models are used
according to the terms of the option scheme under which the options were granted. The fair value is spread over
the period during which the employees become unconditionally entitled to the options. At the balance sheet date,
if it is expected that non-market conditions will not be satisfied, the cumulative expense recognised in relation to the
relevant options is reversed.
With respect to share-based payments, a deferred tax asset is recognised on the relevant tax base. The tax base is
then compared to the cumulative share-based payment expense recognised in the income statement. Deferred tax
arising on the excess of the tax base over the cumulative share-based payment expense recognised in the income
statement has been recognised directly in equity outside the SOCI as share-based payments are considered to be
transactions with shareholders.
Where the Company grants options over its own shares to employees of its subsidiaries it recognises, in its individual
financial statements, an increase in the cost of investment in its subsidiaries equivalent to the equity settled share-
based payment charge recognised in its consolidated financial statements, with the corresponding credit being
recognised in equity.
Bellway p.l.c. Annual Report and Accounts 2021
152
Accounts 24. Share based payments continued
The Group operates a long-term incentive plan (‘LTIP’), a deferred bonus plan (‘DBP’), an employee share option scheme and
Savings Related Share Option Schemes (‘SRSOS’), all of which are detailed below.
Awards under the LTIP have been made to Executive Directors, the Group General Counsel and Company Secretary, and
senior employees, with awards under the DBP also made to senior employees. The awards take the form of ordinary shares in
the Company.
The Bellway p.l.c. (2014) Employee Share Option Scheme (‘2014 ESOS’) is an approved discretionary scheme which provides
for the grant of options over ordinary shares to employees and Executive Directors. It is, however, the current intention that no
Executive Directors of the Company should be granted options under this scheme. Awards will be available to vest after three
years, subject to objective performance targets. As at 31 July 2021 no options had been granted under this scheme.
Options issued under the SRSOS are offered to all employees including the Executive Directors.
An outline of the performance conditions in relation to the LTIP is detailed under the long-term incentive scheme section on
pages 95 to 97 within the Remuneration Report.
Share-based payments have been valued by an external third party using various models detailed below, based on publicly
available market data at the time of the grant, which the Directors consider to be the most appropriate method of determining
their fair value.
The number and weighted average exercise price of share-based payments is as follows:
LTIP, DBP
Outstanding at the beginning of the year
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2021
Weighted
average
exercise price
p
–
–
–
–
–
–
2021
Number of
options
No.
269,690
123,822
(29,162)
(47,923)
316,427
7,120
2020
Weighted
average
exercise price
p
–
–
–
–
–
–
2020
Number of
options
No.
272,289
103,676
(60,565)
(45,710)
269,690
4,016
The options outstanding at 31 July 2021 have a weighted average contractual life of 1.3 years (2020 – 1.3 years). The weighted
average share price at the date of exercise for share options exercised during the year was 2,931.5p (2020 – 3,316.5p).
SRSOS
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding at the end of the year
2021
Weighted
average
exercise price
p
2,519.7
2,333.0
2,504.0
2,690.7
2,404.8
2021
Number of
options
No.
438,360
289,517
(151,525)
(50,931)
525,421
2020
Weighted
average
exercise price
p
2,283.5
2,528.0
2,538.7
1,804.7
2,519.7
2020
Number of
options
No.
464,841
195,607
(68,972)
(153,116)
438,360
Exercisable at the end of the year
2,934.4
14,252
1,828.3
2,626
The options outstanding at 31 July 2021 have an exercise price in the range of 1,892.8p to 2,934.4p (2020 – 1,378.0p to 2,934.4p)
and have a weighted average contractual life of 2.5 years (2020 – 2.4 years). The weighted average share price at the date of
exercise for share options exercised during the year was 3,291.5p (2020 – 3,838.9p).
Valuation methodology
For LTIP options, half of the performance criteria is based on TSR against comparator companies with the other half based on
TSR measured against the FTSE 250 Index (excluding investment trusts and financial service companies). A simplified Monte
Carlo simulation method has been used to determine the Group’s TSR performance against the FTSE 250 Index (excluding
investment trusts and financial service companies). In the case of the DBP, there are no market-related performance conditions
and awards will be eligible to vest upon reaching a date set out in the Deed of the award. As dividends are not reinvested, the
fair value of these awards is equal to the share price at the date of the grant. The Black Scholes method is used for the SRSOS
due to the relatively short exercise window of six months.
Bellway p.l.c. Annual Report and Accounts 2021
153
AccountsAccounts
Notes to the Financial Statements continued
24. Share based payments continued
The fair value of services received in return for share options granted is measured by reference to the fair value of the share
options granted. The inputs into the models for the various grants in the current and previous year were as follows:
2021
2020
October
2020
November
2020
November
2020
December
2020
December
2020
October
2019
December
2019
December
2019
December
2019
December
2019
LTIP
LTIP
DBP
3 Year
SRSOS
5 Year
SRSOS
LTIP
LTIP
DBP
3 Year
SRSOS
5 Year
SRSOS
27-Oct-20 10-Nov-20 10-Nov-20 04-Dec-20 04-Dec-20 16-Oct-19 11-Dec-19 11-Dec-19 03-Dec-19 03-Dec-19
0.0%
0.0%
0.0%
0.0%
0.05%
0.0%
0.0%
0.0%
0.6%
0.6%
–
–
– 2,333.0p
2,333.0p
–
–
–
2,528.0p
2,528.0p
2,317.0p
2,902.0p
2,902.0p
2,980.0p
2,980.0p
3,370.0p
3,401.0p
3,401.0p
3,315.0p
3,315.0p
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
5.0%
3 years
3 years
3 years
3 years
2 months
5 years
2 months
3 years
3 years
3 years
3 years
2 months
5 years
2 months
Scheme
description
Grant date
Risk free
interest rate
Exercise price
Share price at
date of grant
Expected
dividend yield
Expected life
Vesting date
27-Oct-23 10-Nov-23 10-Nov-23 01-Feb-24 01-Feb-26 16-Oct-22 11-Dec-22 11-Dec-22 01-Feb-23 01-Feb-25
Expected
volatility
Fair value
of option
35%
35%
35%
35%
35%
25%
25%
25%
25%
30%
796.0p
1,041.0p 2,230.0p
715.0p
710.0p
1,656.5p
1,486.5p
2,700.0p
663.0p
729.0p
The expected volatility for all models was determined by considering the volatility levels historically for the Group. Volatility levels
for more recent years were considered to have more relevance than earlier years for the period reviewed.
The Group recognised total expenses of £2.6 million (2020 – £2.1 million) in relation to equity-settled share-based payment transactions.
Contingencies, related parties and subsidiaries
25. Contingent liabilities
Contingent liabilities
Contingent liabilities of the Group are disclosed unless the possibility of an outflow in settlement is remote.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies
within the Group, the Company considers these to be insurance arrangements and accounts for them as such.
In this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes
probable that the Company will be required to make a payment under the guarantee.
Legacy building safety improvements
We continue to take a proactive approach to nationwide concerns with regards to fire safety in high-rise buildings across the
UK. Bellway recognises its responsibilities in its legacy apartment portfolio and continues to review combustion risks, in external
wall systems, on past high-rise developments.
As detailed in note 10, Bellway has identified a number of developments, which obtained building regulation approval at the
time of construction, where the building materials used may not fully comply with the most recent Government guidance.
For these developments we have established that the cost of the remedial works satisfies the accounting requirements of a
provision at the balance sheet date. While a prudent approach has been taken, the extent of the provision could increase,
in line with normal accounting practice if new issues are identified, as building owners continue to undertake their own
investigative works on these and other schemes within the legacy portfolio.
Furthermore, the draft Building Safety Bill published on 5 July 2021 proposes to extend the limitation period for claims
under s.1 of the Defective Premises Act 1972 (DPA) from 6 years to 15 years. The extension of this time period could result in
further schemes in our legacy portfolio falling into scope of the provision. We note, however, that our existing approach for
provisioning, considers a range of contractual and legislative frameworks, not just the DPA. Provisions are assessed on a site-by-
site basis and in most cases, Bellway’s assessment of its legal liability period extends beyond the 6 year period included in the
extant DPA legislation.
Bellway p.l.c. Annual Report and Accounts 2021
154
Accounts 25. Contingent liabilities continued
Due to the uncertainties in when the draft Building Safety Bill will become law together with uncertainty with regards to the
final detail of the legislation, it is not possible to determine what schemes, over and above those already included as part of the
legacy building safety improvement provision, will fall into scope. In addition, for buildings currently constructed outside of the
existing legal limitation period, Bellway has not undertaken conclusive on-site investigative works. Therefore, the cost of any
further potential remedial works cannot be measured reliably.
Relating to subsidiaries
The Company is liable, jointly and severally with other members of the Group, under guarantees given to the Group’s bankers
in respect of overdrawn balances on certain Group bank accounts and in respect of other overdrafts, loans and guarantees
given by the banks to or on behalf of other Group undertakings. At 31 July 2021 there were bank overdrafts of £7.5 million (2020
– £7.8 million) and bank loans of £nil (2020 – £50.0 million). Furthermore, the Company is jointly and severally liable with Bellway
Homes Limited in relation to the fixed rate sterling USPP notes of £130.0 million (2020 – £nil) issued in the year. It is the Directors’
expectation that the possibility of cash outflow on these liabilities is considered minimal and no provision is required.
Relating to joint arrangements
The Company has guaranteed the overdrafts of joint arrangements up to a maximum of £0.3 million (2020 – £0.3 million).
It is the Directors’ expectation that the possibility of cash outflow on these liabilities is considered minimal and no provision
is required.
26. Related party transactions
The Board and certain members of senior management are related parties within the definition of IAS 24 ‘Related Party Disclosures’.
Summary information of the transactions with key management personnel is provided in note 22. Detailed disclosure of individual
remuneration of Board members is included in the Remuneration Report on pages 90 to 110.
Transactions between fellow subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed.
Group
During the year the Group entered into the following related party transactions with its joint arrangements:
Invoiced to joint arrangements in respect of accounting, management fees, interest on loans,
land purchases and infrastructure works
Amounts owed to joint arrangements in respect of land purchases and management fees at the
year end
Amounts owed by joint arrangements in respect of accounting, management fees, interest,
land purchases and infrastructure works
2021
£m
23.5
(4.5)
49.4
2020
£m
31.6
(4.5)
62.8
Company
During the year the Company entered into the following related party transactions with its subsidiaries and joint arrangements:
Amounts received in the year from subsidiaries for share options exercised by subsidiary company
employees and dividends received
Amounts paid in the year by subsidiaries on behalf of the Company in respect of dividends, finance
expenses and share purchases, and receivable from subsidiaries on disposal of investments
Amounts owed by subsidiaries in respect of dividends and shares issued net of amounts paid on
behalf of the Company
Investments in subsidiaries and joint ventures
2021
£m
186.7
2020
£m
10.5
(107.2)
(124.2)
512.3
432.8
40.4
37.8
Bellway p.l.c. Annual Report and Accounts 2021
155
AccountsAccounts Notes to the Financial Statements continued
27. Group undertakings
The Directors set out below information relating to the Group undertakings (excluding resident management companies
presented in note 28) as at 31 July 2021. All of these Group undertakings are registered in England and Wales unless otherwise
stated. They are engaged in housebuilding and associated activities, have coterminous year ends with the Group, 100% of their
ordinary share capital is held by the Company and the registered address is the same as the Company (unless otherwise stated).
Subsidiaries – trading
Bellway Homes Limited
Bellway Housing Trust Limited
Bellway Properties Limited
Bellway (Services) Limited
Litrose Investments Limited
Joint arrangements
Cramlington Developments Limited (50% owned, year end of 30 June) ^^ 1
Fradley Residential LLP (50% owned) ^^
Leebell Developments Limited (50% owned, year end of 30 June) ^^ 1
Ponton Road LLP (50% owned) ^^
Lambeth Regeneration LLP (50% owned) ^^
Bellway Latimer Cherry Hinton LLP (50% owned) ^^
DFE TW Residential Limited (50% owned) ^^ 3
Subsidiaries – dormant^
Ashberry Homes Limited
Bellway (Builders) Limited
Bellway City Solutions Limited ^^^
Bellway Financial Services Limited
Bellway Homes (Anglia) Limited
Bellway Homes (Hertfordshire) Limited ^^^
Bellway Homes (North Solihull GP) Limited
Bellway London Limited
Bellway Marine Limited ^^^
Bellway Trustee Company Limited
Bulldog Premium Growth I Limited
D.F.W. Golding Limited
George Blackett Limited
Other entities
HBF Insurance PCC Limited 2
MI New Home Insurance PCC Limited 2
Notes:
^
Dormant
^^ These shares are held indirectly.
^^^ Dissolved on 24 August 2021
1
2
3
Registered address is Persimmon House, Fulford, York, YO19 4FE
Registered address is Mill Court, La Charroterie, St Peter Port, Guernsey, GY1 4ET
Registered address is Gate House, Turnpike Road, High Wycombe, Buckinghamshire, HP12 3NR
Homes2Let Limited
J. T. B. (Chapel Farm) Estates Limited
J. T. B. Estates Limited
John T. Bell & Sons (1976) Limited
Nixons Kitchens Limited
Seaton GR SPV 12 Limited
Seaton GR SPV 13 Limited
Seaton GR SPV 14 Limited
Seaton Thirteen Limited
Sniperley One Limited
Sniperley Two Limited
Terraces Limited
Tyneside Land and Property Company Limited ^^^
Bellway p.l.c. Annual Report and Accounts 2021
156
Accounts 28. Resident management companies
The Directors set out below information relating to resident management companies which are currently held by the Group as
at 31 July 2021.
Control is exercised by the Group’s power to appoint directors and the Group’s voting rights in these companies. All the resident
management companies listed below are limited by guarantee, unless otherwise indicated, without share capital and are
incorporated in the UK.
The capital, reserves and profit or loss for the year have not been stated for the resident management companies listed below
as the beneficial interest in any assets or liabilities of these companies is held by the residents. The Group does not have
exposure, or rights to variable returns from these companies and therefore they are not included in the consolidated financial
statements. They are temporary members of the Group and will be handed over to residents in due course.
Company Name
Registered Office
1811 (Tonbridge) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
27 The Vale Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Abbey Heights Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Abbotscroft (Hanham) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Abbotswood Park Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Amblehurst Green (Billingshurst) Management Company Limited
Homer House, 8 Homer Road, Solihull, West Midlands, B91 3QQ
Amen Corner (Binfield) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Apsley Quay Management Company Limited
86-90 Paul Street, London, EC2A 4NE
Area F1 (Kings Hill) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Aspects Management Company Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH
Aspen Walk (Eight Ash Green) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Avondale (Cressing) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Awel Y Mor Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Azalea (Alton) Leasehold Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Azalea (Medstead) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Badbury Reach Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Barley Fields (Tamworth) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Barleycorn Way Residents Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Bartley Square Management Company Limited
3rd Floor, 86-90 Paul Street, London, EC2A 4NE
Barton Manor (Barton) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Bassingbourn Fields Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Baswich Grange Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Battalion Court Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Beckton Parkside Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
Beechcroft (Sunninghill) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Bellway At Linmere Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Bellway Whitehouse Farm Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
Bentall Place (Heybridge) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Bicknor Wood Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Blackthorn Meadows Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Bluebell Walk (Harrietsham) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Bluebells (Witham) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Bluecoats Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Bluenote Apartments Management Company Limited
Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, CM20 2BN
Bourne View (Ipswich) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Bower Place Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
Bowood View (Melksham) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Brambleside Management Company Limited
5 Caldecotte Lake Business Park, Caldecotte Lake Dri, Caldecotte, Milton Keynes,
Buckinghamshire, MK7 8LE
Brampton Gate Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Bramshall Green Management Company Limited
Whittingham Hall, Whittington Road, Worcester, WR5 2ZX
Broadleaf Ashby Management Company Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH
Broadleaf Management Company Limited
Brookvale Management Company Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Buckland Rise ( Peters Village) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Buckthorn Grange Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Burdon Rise Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Bellway p.l.c. Annual Report and Accounts 2021
157
AccountsAccounts Notes to the Financial Statements continued
28. Resident management companies continued
Company Name
Registered Office
Byron Heights Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Cathedral Park (Chichester) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Centurion Fields Elloughton Limited
Chailey Gardens Management Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Chalfont Drive Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Charlton Hayes Management Company Limited
Queensway House, 11 Queensway, New Milton, Hampshire, BH25 5NR
Charters Hill Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Cherry Orchard (Bevere) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Chestnut Grove (Ash Green) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Copperfields Resident Management Company
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Copperhouse Green Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Copthorne Keep Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Cornelia Gardens Management Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Cornfield’s Residents Management Company Limited
Romulus Court Meridian East, Meridian Business Park, Leicester, LE19 1YG
Cotswold Chase Management Company (Gloucester) Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Cotswold Gate (Chipping Norton) Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
Cotton Woods (Preston) Residents Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Crown Fields (Chatham) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Curzon Park (Residents) Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Cuttle Brook Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Dacres Wood Court Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Dalesway (Harrogate) Management Company Limited
RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR
Devonshire Place (Grays) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Dickens Gate (Rudloe) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Dickens Manor Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Digby Court (Birmingham) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Dove Manor Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Dunton Fields (Laindon) Management Company Limited
8 Hemmells, Basildon, Essex, SS15 6ED
Earlsfield Park (Knowsley) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
East Middle Callerton Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Eastside Quarter Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Ebbsfleet Cross (Phase 2) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Ebbsfleet Cross Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Elements Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Elmington Parcel 1 Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Elmington Parcel 2 Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Elmington Parcel 3 Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Essendene Residential Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER *
Estone Grange Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Eve Meadows (Haughley) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Fairfields (Calcot) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Farriers Court Residents Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Fellows Gardens Management Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Fielders Crescent Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
Finchale Drive Residents Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Forest Chase Management Company Limited
New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, SO53 3LG
Forest Oak Management Company Limited
Faulkner & Company 1A, George Street, Hinckley, Leicestershire, LE10 0AL
Four Oaks (Oxted) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Foxhill (Brackley) Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
Foxlow Grange Berryfields Management Company Limited
Queensway House, 11 Queensway, New Milton, Hampshire, BH25 5NR
Frobisher Court (Finningley) Management Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Furlong Park Residents Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Fusion (Harlow) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Goodsyard (No 1) Management Company Limited
11 Little Park Farm Road, Fareham, Hampshire, PO15 5SN
Grammar School Gardens Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Greensands Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
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Accounts 28. Resident management companies continued
Company Name
Registered Office
Grey Gables Farm Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Greystone Meadows (Undy) Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL *
Grove Meadows Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU *
Hall Road (Rochford) Management Company Limited
Kinetic Business Centre, Theobald Street, Borehamwood, Hertfordshire, WD6 4PJ
Halyards Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Hampden Gardens (Thame) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Hampton Trove Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Hanwell View Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
Hardintone Court Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Hardwicke Court (Gloucester) Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Harnham Park Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Hartshorne Residents Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Harvard Place (Earls Colne) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Hatfield Grove (Hatfield Peveral) Management Company Limited
Kinetic Business Centre, Theobald Street, Borehamwood, Hertfordshire, WD6 4PJ
Hathaway Gardens PH2 Residents Management Company Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH
Hawksview (Hawkhurst) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Hawthorne Rise Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Hazlemere Marina (Waltham Abbey) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Heathcote Park (Warwick) Management Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Heatherley Wood Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Heathlands RMC Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Helios Park Management Company Limited
Pacific House, Imperial Way, Reading, Berkshire, RG2 0TD
Helliers Lane (Cheddar) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Hellingly (Hailsham) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Henderson Park (Thorpe Le Soken) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Hertsmere Mews (Borehamwood) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
High Point Residents Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Highfields (Pontprennau) Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Highnam (Gloucestershire) Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Hinxhill Park (Ashford) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Hollytree Walk (Colchester) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Holmwood Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Ikon (Croydon) Management Company Limited
86-90 Paul Street, London, EC2A 4NE
Imperial Gardens (Howden) Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Imperial Park (Maidstone) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Ivel Chase Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
Jameson Manor Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Jubilee Park Residents Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Keephatch Chase Management Limited
Pacific House, Imperial Way, Reading, Berkshire, RG2 0TD
Keephatch Gardens (Wokingham) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Kenavon Drive (Reading) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Kingsland Gate Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Kingsreach (Slough) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Kingswood (High Wycombe) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Kingswood Heath (Colchester) Management Company Limited
Queensway House, 11 Queensway, New Milton, Hampshire, BH25 5NR
Ladden Garden Village PL 24-27 (Leasehold Apartments) Management
Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Lakeside Park Management Company Limited
154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Lancaster House Residents Management Company Limited
RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR
Langford Park Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Latitude Residents Limited
Latitude Residents No 1 Limited
Latitude Residents No 2 Limited
Latitude Residents No 3 Limited
Latitude Residents No 4 Limited
Latitude Residents No 5 Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, SO53 3LG
New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, SO53 3LG
New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, SO53 3LG
2 Dockdell Copse, Bursledon, Southampton, Hampshire, SO31 1EW
New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, SO53 3LG
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AccountsAccounts Notes to the Financial Statements continued
28. Resident management companies continued
Company Name
Registered Office
Legacy Wharf Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Lestone Mews Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Limehouse Basin (London) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Linkside (Burton) Management Company Limited
Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, CM20 2BN
Lion Wharf (Isleworth) Management Company Limited
395 Centennial Park Centennial Avenue, Elstree, Borehamwood, WD6 3TJ
Little Acres Residents Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Little Meadows (Cranleigh) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Littlebrook (Cutbush Lane) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Lockharts RMC Limited
3 Romulus Court, Meridian Business Park, Leicester, LE19 1YG
Long Acre (Shinfield) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Longwood Copse Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Lyde Green Management Company Limited
2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Lysander Fields Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Maes Y Rhedyn Fern Meadow Residents Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Mallard Walk Management Company Limited
154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Mallards Reach (Porthcawl) Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Malvern Chase (Tewkesbury) Management Company Limited
2540 The Quadrant, Aztec West, Almondsbury, Bristol, BS32 4AQ
Manor Chase (Gloucester Road) Tutshill Management Company Limited
Building 1 Eastern Business Park, St Mellons, Cardiff, CF3 5EA
Maple Creek Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Marconi (Chelmsford) Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
Marlborough Road Wroughton (Swindon) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Maybrey Works Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Mead Fields (Phase 2) Weston Parklands Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Mead Fields Phase 2 (Leasehold Apartments) Management Company
Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Meadow Rise (Heighington) Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Meadow View (Romsey) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Merchants Gate Cottingham Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Mill Fields (Wingerworth) Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Milldown Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Montague Green (Rowland’s Castle) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Mousley Park Hilton Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Mulberry Park Apartments (Management Company) Limited
2540 The Quadrant, Aztec West, Almondsbury, Bristol, BS32 4AQ
New Cardington Estate Management Company Limited
RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR*
Nightingale Rise (Hoo) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Nightingale Rise (Hoo) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Northdene Residents Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Novello Management Company Limited
Kinetic Business Centre, Theobald Street, Borehamwood, Hertfordshire, WD6 4PJ
Nutwood (Roby) Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Oak Hill Park (Chinnor) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Oakes Park (Dartford) Management Company Limited
The Base, Dartford Business Park, Victoria Road, Dartford, DA1 5FS
Oakley Park (Edenbridge) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Old Forest Road (Winnersh) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Old School Gardens Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Oxlease Residents Limited
P.R.P. Management Company Limited
New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, SO53 3LG
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Pasture Walk Management Company Limited
Castleman Business Centre, Embankment Way, Ringwood, BH24 1EU
Penhurst Square (Addiscombe) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Penmire Rise Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Picklenash Grove Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Pickwick Court (Corsham) Management Company Limited
2540 The Quadrant, Aztec West, Almondsbury, Bristol, BS32 4AQ
Pine Walk Guisborough Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Pipits Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Pirton Fields (Churchdown) Management Company Limited
Building 1 Eastern Business Park, St Mellons, Cardiff, CF3 5EA
Platts Meadow (Winsford) Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Poppy Field Residents Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
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Accounts 28. Resident management companies continued
Company Name
Registered Office
Poppy View (Saffron Walden) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Portland Gardens (Wouldham) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Priory Grange (Hatfield Peverel) Management Company Limited
Kinetic Business Centre, Theobald Street, Borehamwood, Hertfordshire, WD6 4PJ
QE2 (Welwyn Garden City) Management Company Limited
3rd Floor, 86-90 Paul Street, London, EC2A 4NE
Quakers Walk (Devizes) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ *
Quantock Heights (Banwell) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Queenshead Park Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Rainbow Fields (Waddicar) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Reflections Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Renaissance (Reading) Management Company Limited
Thames Valley Pacific House, Imperial Way, Reading, Berkshire, RG2 0TD
Renovo (West Thurrock) Management Company Limited
Kinetic Business Centre, Theobald Street, Borehamwood, Hertfordshire, WD6 4PJ
Ridleys Orchard (Whitton) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Rolleston Manor Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Roman Fields (Corbridge) Management Company Limited
2 Centro Place, Pride Park, Derby, Derbyshire, DE24 8RF
Roman Walk Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Rookerey Park Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Rose Meadow (Northwich) Residents Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Rosedale Park Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Rowley Fields Residents Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Sandstone Brook Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Sandstone Court (Merstham) Management Company Limited
3rd Floor, 86-90 Paul Street, London, EC2A 4NE
Says Lane (Langford) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Scholars Place Management Company Limited
Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, CM20 2BN
Seaford Grange (Newlands) Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Sheasby Park Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Sixty Three Management Company Limited
Gateway House, 10 Coopers Way, Southend-on-Sea
Solomon’s Seal (Horsham) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Sovereign Place (Horley) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Spofforth Park Management Company Limited
RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR
St Edmunds Management Limited
8 Cumbrian House, 217 Marsh Wall, London, E14 9FJ *
St George’s Walk Residential Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
St John’s View (Menston) Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
St Lythans Park (Culverhouse Cross) Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
St Mary’s Hill (Blandford) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
St Mary’s Stannington Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER *
St. George’s Park (Phase 2) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
St. George’s Park Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
St. James Mews (Charfield) Management Company Limited
154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Steeds Farm (Fern Hill Gardens) Management Company Limited
2540 The Quadrant, Aztec West, Almondsbury, Bristol, BS32 4AQ
Steeple Chase (Frisby) Management Company Limited
3 Romulus Court, Meridian Business Park, Leicester, LE19 1YG
Sterling Square (Bracknell) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Stonebridge View Residents Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Stoughton Park Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Swanland Grange Management Company Limited
Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
The Alders (Wolverhampton) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Avenue (Medburn) Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
The Beeches (Stanton Cross) Management Company Limited
Marlborough House, 298 Regents Park Road, London, N3 2UU
The Brackens Residents Management Company Limited
RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR
The Bridles Residential Management Company Limited
2540 The Quadrant, Aztec West, Almondsbury, Bristol, BS32 4AQ
The Chase Residents Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Cherry Meadow And Hatton Court Management Company Limited
Romulus Court Meridian East, Meridian Business Park, Leicester, LE19 1YG
The Croft (Ash Green) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
The Fairways (Basingstoke) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Foundry (Hemel Hempstead) Management Company Limited
Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, CM20 2BN
The Furlongs (Gt.Leighs) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Furrows (Warboys) Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
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AccountsAccounts Notes to the Financial Statements continued
28. Resident management companies continued
Company Name
Registered Office
The Grange (Eldesborough) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Grange (Fenham) Resident Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
The Haven (Emsworth) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Hedgerows (Scots Lane) Residents Management Company Limited
4335 Park Approach, Thorpe Park, Leeds, Yorkshire, LS15 8GB
The Long Shoot Management Company Limited
2nd Floor, 154-155 Great Charles Street Queensway, Birmingham, B3 3LP
The Oaks (Parsons Hill) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Oaks (Witham) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
The Orchards (Colchester) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Orchards Phase 2 (Norton Fitzwarren) Limited
9 Hammet Street, Hammet Street, Taunton, TA1 1RZ *
The Pastures (Telford) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Pastures (Wilstead) Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Printworks (Reading) Residents Management Company Limited
2000 Cathedral Square Cathedral Hill, Guildford, Surrey, GU2 7YL
The Residence (Nine Elms) Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
The Residence (Phase 2) Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
The Ridgeway (Chinnor) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN **
The Rosehips (Lower Howsell Road) Residents Management Company
Limited
Whittingham Hall, Whittington Road, Worcester, WR5 2ZX
The Spinney (Oteley Road) Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
The Vale (Bottesford) Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
The Vickers (Witchford) Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
The Willows (Swallowfield) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Woodlands (Adel) Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
The Woodlands (Watnall) Management Company Limited
Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, CM20 2BN
Thomas Road Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
Tidbury Heights Management Company Limited
Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Tindale Reach (Wickwar) Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Tithecote Manor Management Company Limited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Tranby Park Residential Management Company Limited
RMG House, Essex Road, Hoddesdon, Hertfordshire, EN11 0DR
Turnberry Quay Management Company Limited
8th Floor Holborn Tower, 137-144 High Holborn, London, WC1V 6PL
Tylman Place (Faversham) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Vicarage Gardens (South Marston Swindon) Management Company Limited 1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ
Victoria Gardens (Peters Village) Management Company Limited
Anchor Boulevard, Crossways Busines Park, Dartford, Kent,DA2 6QH
Waltham Heights Resident’s Management Company Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH
Waterhouse Mill Residents Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Waterside At Riverwell (Block E) Management Company Limited
86-90 Paul Street, London, EC2A 4NE
Wavendon Chase Management Company Limited
The Maltings, Hyde Hall Farm, Sandon, Buntingford, SG9 0RU
Wavendon View Residents Management Company Limited
Queensway House, 11 Queensway, New Milton, Hampshire, BH25 5NR
Wellfield Rise Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Wellington Gardens (Aldershot) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Wellington Grange (Pocklington) Management Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
West End Quarter (Folkestone) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Westbrook Moorings Management Company Limited
86-90 Paul Street, London, EC2A 4NE
Westland Place (Rainham) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Westminster Road Management Company Limited
111 Edmund Street, Birmingham, West Midlands, B3 2HJ
Weycorner (Guildford) Management Company Limited
Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Wickfields (Longwick) Management Company Limited
86-90 Paul Street, London, EC2A 4NE
Willow Park (Halstead) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Windgreen Gardens Management Company Limited
Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Wolds View Residents Management Company Limited
North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, SY1 3BF
Woodgate (Stone Cross) Management Company Limited
Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Woodgreen (Blyth) Residents Management Company Limited
Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER
Wyvern Grange Management Company Limited
154-155 Great Charles Street Queensway, Birmingham, B3 3LP
Yew Tree Gardens (Cholsey) Management Company Limited
Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
* This company is a 50/50 joint venture
** Company is limited by shares wholly owned by Bellway Homes Limited
*** Company is limited by shares wholly owned by an employee of Bellway Homes Limited
Bellway p.l.c. Annual Report and Accounts 2021
162
Accounts 29. Alternative performance measures
Bellway uses a variety of alternative performance measures (‘APMs’) which, although financial measures of either historical or
future performance, financial position or cash flows, are not defined or specified by IFRSs. The Directors use a combination of
APMs and IFRS measures when reviewing the performance, position and cash of the Group.
The APMs used by the Group are defined below:
• Underlying gross profit and underlying operating profit – Both of these measures are stated before net legacy building
safety expense and exceptional items and are reconciled to total gross profit and total operating profit on the face of the
consolidated income statement. The Directors consider that the removal of the net legacy building safety expense and
exceptional items provides a better understanding of the underlying performance of the Group.
• Underlying gross profit margin – This is gross profit before net legacy building safety expense and exceptional items divided
by total revenue. The Directors consider this to be an important indicator of the underlying trading performance of the Group.
• Administrative expenses as a percentage of revenue – This is calculated as the total administrative overheads divided
by total revenue. The Directors consider this to be an important indicator of how efficiently the Group is managing its
administrative overhead base.
• Underlying administrative expenses – This measure is stated before exceptional items and is reconciled to total
administrative expenses on the face of the consolidated income statement. The Directors consider that the removal of the
exceptional items provides a better understanding of how efficiently the Group is managing its underlying administrative
overhead base.
• Underlying administrative expenses as a percentage of revenue – This is calculated as the underlying administrative
overheads divided by total revenue. The Directors consider this to be an important indicator of how efficiently the Group is
managing its underlying administrative overhead base.
• Underlying operating profit margin – This is operating profit before net legacy building safety expense and exceptional items
divided by total revenue. The Directors consider this to be an important indicator of the operating performance of the Group.
• Net finance expense – This is finance expenses less finance income. The Directors consider this to be an important measure
when assessing whether the Group is using the most cost effective source of finance.
• Underlying profit before taxation – This is the profit before taxation before net legacy building safety expense and
exceptional items. The Directors consider this to be an important indicator of the profitability of the Group before taxation.
• Underlying profit for the year – This is the profit for the year before net legacy building safety expense and exceptional items.
The Directors consider this to be an important indicator of the profitability of the Group.
• Dividend cover – This is calculated as earnings per ordinary share for the period divided by the dividend per ordinary share
relating to that period. At the half year the dividend per ordinary share is the proposed interim ordinary dividend, and for the
full year it is the interim dividend paid plus the proposed final dividend. The Directors consider this an important indicator of
the proportion of earnings paid to shareholders and reinvested in the business.
• Underlying dividend cover – This is calculated as underlying profit for the year per ordinary share for the period divided by
the dividend per ordinary share relating to that period. At the half year the dividend per ordinary share is the proposed interim
ordinary dividend, and for the full year it is the interim dividend paid plus the proposed final dividend. The Directors consider
this an important indicator of the proportion of underlying earnings paid to shareholders and reinvested in the business.
• Capital invested in land, net of land creditors, and work in progress – This is calculated as shown in the table below.
The Directors consider this as an indicator of the net investment by the Group in the period to achieve future growth.
Per balance sheet
Land
Work in progress
Increase in capital invested in land
and work in progress in the year
2021
£m
2,483.9
1,431.4
2020
£m
2,216.2
1,496.1
Land creditors
(455.8)
(343.6)
Increase in capital invested in land,
net of land creditors, and work in
progress in the year
Mvt
£m
267.7
(64.7)
203.0
(112.2)
90.8
2020
£m
2,216.2
1,496.1
2019
£m
2,004.4
1,298.2
(343.6)
(297.9)
Mvt
£m
211.8
197.9
409.7
(45.7)
364.0
• Net asset value per ordinary share (‘NAV’) – This is calculated as total net assets divided by the number of ordinary shares in
issue at the end of each period (see note 19). The Directors consider this to be a proxy when reviewing whether value, on a
share by share basis, has increased or decreased in the period.
• Capital employed – Capital employed is defined as the total of equity and net debt. Equity is not adjusted where the
Group has net cash. The Directors consider this to be an important indicator of the operating efficiency and performance
of the Group.
Bellway p.l.c. Annual Report and Accounts 2021
163
AccountsAccounts
Notes to the Financial Statements continued
29. Alternative performance measures continued
• Underlying return on capital employed (‘RoCE’) – This is calculated as operating profit before net legacy building safety
expense and exceptional items divided by the average capital employed. Average capital employed is calculated based on
opening, half year and closing capital employed. The calculation is shown in the table below. The Directors consider this to be
an important indicator of whether the Group is achieving a sufficient return on its investments.
Underlying operating profit
Capital employed/land creditors:
Opening
Half year
Closing
Average
Return on capital employed
2021
Capital
employed
2021
Land
creditors
£m
343.6
371.7
455.8
390.4
£m
531.5
2,994.0
3,162.4
3,287.8
3,148.1
16.9%
2021
Capital
employed
including land
creditors
£m
531.5
3,337.6
3,534.1
3,743.6
3,538.4
2020
Capital
employed
£m
321.7
2,921.2
3,038.9
2,994.0
2,984.7
15.0%
10.8%
2020
Land
creditors
£m
2020
Capital
employed
including land
creditors
£m
321.7
297.9
274.9
343.6
305.5
3,219.1
3,313.8
3,337.6
3,290.2
9.8%
• Return on capital employed (‘RoCE’) – This is calculated as operating profit divided by the average capital employed.
Average capital employed is calculated based on opening, half year and closing capital employed. The calculation is shown
in the table below. The Directors consider this to be an important indicator of whether the Group is achieving a sufficient
return on its investments.
Operating profit
Capital employed/land creditors:
Opening
Half year
Closing
Average
Return on capital employed
2021
Capital
employed
2021
Land
creditors
£m
343.6
371.7
455.8
390.4
£m
479.7
2,994.0
3,162.4
3,287.8
3,148.1
15.2%
2021
Capital
employed
including land
creditors
£m
479.7
3,337.6
3,534.1
3,743.6
3,538.4
2020
Capital
employed
£m
249.1
2,921.2
3,038.9
2,994.0
2,984.7
13.6%
8.3%
2020
Land
creditors
£m
2020
Capital
employed
including land
creditors
£m
249.1
297.9
274.9
343.6
305.5
3,219.1
3,313.8
3,337.6
3,290.2
7.6%
• Post tax return on equity – This is calculated as profit for the year divided by the average of the opening, half year and closing
net assets. The Directors consider this to be a good indicator of the operating efficiency of the Group.
Profit for the year
Net assets:
Opening
Half year
Closing
Average
Post tax return on equity
2021
£m
390.7
2,994.0
3,162.4
3,287.8
3,148.1
2020
£m
192.9
2,921.2
3,038.9
2,994.0
2,984.7
12.4%
6.5%
Bellway p.l.c. Annual Report and Accounts 2021
164
Accounts
• Total growth in value per ordinary share – The Directors use this as a proxy for the increase in shareholder value since 31 July
2018. A period of 3 years is used to reflect medium-term growth.
Net asset value per ordinary share:
At 31 July 2021
At 31 July 2018
Net asset value growth per ordinary share
Dividend paid per ordinary share:
Year ended 31 July 2021
Year ended 31 July 2020
Year ended 31 July 2019
Cumulative dividends paid per ordinary share
Total growth in value per ordinary share
2,664p
2,079p
85.0p
100.0p
145.4p
585p
330.4p
915.4p
• Annualised accounting return in NAV and dividends paid since 31 July 2018 – This is calculated as the annualised increase
in net asset value per ordinary share plus cumulative ordinary dividends paid per ordinary share since 31 July 2018 (as detailed
above) divided by the net asset value per ordinary share at 31 July 2018. The Directors use this as a proxy for the increase in
shareholder value since 31 July 2018.
Net asset growth per ordinary share
Dividend paid per ordinary share
Total growth in value per ordinary share
Net asset value per ordinary share at 31 July 2018
Total value per ordinary share
Annualised accounting return = (2,994.4/2,079.0)^(1/3)-1
585p
330.4p
915.4p
2,079.0p
2,994.4p
12.9%
• Net cash/debt – This is the cash and cash equivalents less bank debt and fixed rate sterling USPP notes. The Directors
consider this to be a good indicator of the financing position of the Group. This is reconciled in note 16.
• Average net debt – This is calculated by averaging the net debt/cash position at 1 August and each month end during the
year. The Directors consider this to be a good indicator of the financing position of the Group throughout the year.
• Cash generated from operations before investment in land, net of land creditors, and work in progress – This is calculated
as shown in the table below. The Directors consider this as an indicator of whether the Group is generating cash before
investing in land and work in progress to achieve future growth.
Cash from operations
Add: increase in capital invested in land, net of land creditors, and work in progress
(as described above)
Cash generated from operations before investment in land, net of land creditors, and work
in progress
2021
£m
519.6
90.8
610.4
2020
£m
55.8
364.0
419.8
• Gearing – This is calculated as net debt divided by total equity. The Directors consider this to be a good indicator of the
financial stability of the Group.
• Adjusted gearing – This is calculated as the total of net debt/cash and land creditors divided by total equity. The Directors
believe that land creditors are a source of long-term finance so this provides an alternative indicator of the financial stability of
the Group.
• Order book – This is calculated as the total expected sales value of current reservations that have not legally completed.
The Directors consider this to be an important indicator of the likely future operating performance of the Group.
Bellway p.l.c. Annual Report and Accounts 2021
165
AccountsAccounts
Five Year Record
Income statement
Revenue
Operating profit
Net finance expenses
Share of results of joint ventures
Profit before taxation
Income tax expense
Profit for the year (all attributable to equity holders of
the parent)
Balance sheet
ASSETS
Non-current assets
Current assets
LIABILITIES
Non-current liabilities
Current liabilities
EQUITY
Total equity
Statistics
Number of homes sold
Average price of new homes
Underlying gross margin1
Gross margin
Underlying operating margin1
Operating margin
Basic earnings per ordinary share
Dividend per ordinary share
Underlying return on capital employed1
Return on capital employed1
Gearing1
Net asset value per ordinary share1
Land portfolio – plots with implementable DPP
2017
£m
2018
£m
2019
£m
2020
£m
2021
£m
2,558.6
571.6
(11.3)
0.4
560.7
(106.6)
2,957.7
652.9
(13.6)
1.8
641.1
(121.2)
3,213.2
674.9
(14.4)
2.1
662.6
(124.0)
2,225.4
321.7 4
(13.4)
1.0
309.34
(57.6)4
3,122.5
531.54
(11.1)
10.4
530.84
(98.1)4
454.1
519.9
538.6
251.74
432.74
48.0
59.0
83.2
99.3
102.1
3,099.3
3,485.5
3,806.7
3,984.3
4,574.7
(118.4)
(837.6)
(84.9)
(902.5)
(99.4)
(869.3)
(133.8)
(955.8)
(316.9)
(1,072.1)
2,191.3
2,557.1
2,921.2
2,994.0
3,287.8
9,644
10,307
10,892
£260.4k
25.9%^
25.9%^
22.3%
22.3%
370.6p
122.0p
27.6%
27.6%
–
1,785p
25,655
£284.9k
25.6%**
25.6%**
22.1%
22.1%
423.4p
143.0p
27.2%
27.2%
–
2,079p
26,877
£292.0k
24.6%
24.6%
21.0%
21.0%
437.8p
150.4p
24.7%
24.7%
–
7,522
£293.1k
19.0%4
15.7%
14.5%4
11.2%
156.6p
50.0p
10.8%4
8.3%
–
2,372p
26,421
2,427p
28,289
10,138
£306.5k
20.9%4
19.2%
17.0%4
15.4%
316.9p
117.5p
16.9%4
15.2%
–
2,664p
30,933
Weighted average number of ordinary shares
122,511,626 122,779,199 123,012,723 123,205,211 123,306,035
Number of ordinary shares in issue at end of year
122,797,958 122,980,266 123,167,828 123,345,834 123,396,422
Notes:
1 APM
4
Stated before net legacy building safety expense and exceptional items.
** Restated due to the adoption of IFRS 15 ‘Revenue from contracts with customers’.
^ Not restated following the adoption of IFRS 15 ‘Revenue from contracts with customers’.
Bellway p.l.c. Annual Report and Accounts 2021
166
Accounts
Glossary
Affordable Housing
Social rented and intermediate housing provided to specified eligible households whose needs are not met by the market, at a
cost low enough for them to afford, determined with regard to local incomes and local house prices. It is generally provided by
councils and not-for-profit organisations such as housing associations.
Average Selling Price
Calculated by dividing the total price of homes sold by the number of homes sold.
Brownfield
Land which has been previously used for other purposes.
Cancellation Rate
The rate at which customers withdraw from a house purchase after paying the reservation fee, but before contracts are
exchanged, usually due to difficulties in obtaining mortgage finance. Reservation fees are refunded in accordance with the
Consumer Code for Home Builders.
Community Infrastructure Levy (‘CIL’)
The CIL is a tool for local authorities in England and Wales to help deliver infrastructure to support the development of the area.
COVID-19
COVID-19 is a disease caused by a new strain of coronavirus. ‘CO’ stands for corona, ‘VI’ for virus, and ‘D’ for disease. Formerly,
this disease was referred to as ‘2019 novel coronavirus’ or ‘2019-nCoV’. COVID-19 has been characterised as a pandemic by the
World Health Organization.
DEFRA
Department for Environment, Food and Rural Affairs.
Earnings per Share (‘EPS’)
Profit attributable to ordinary equity shareholders divided by the weighted average number of ordinary shares in issue during
the financial year, excluding the weighted average number of ordinary shares held by the Bellway Employee Trust (1992) which
are treated as cancelled.
Energy Savings Opportunity Scheme (ESOS)
The ESOS is a mandatory energy assessment scheme for large organisations in the UK.
Executive Board
The Executive Board is made up of the Executive Directors of Bellway p.l.c.
Furlough
A furlough is a temporary leave of employees due to special needs of a company or employer, which may be due to economic
conditions of a specific employer or in society as a whole. A UK-wide furlough was implemented in first half of 2020 due to the
COVID-19 pandemic. Whilst there was a government funded furlough scheme which paid 80% of an employees salary, Bellway
did not apply for this and continued to pay the 75% of the workforce which it furloughed a full basic salary from its own reserves.
Greenhouse Gas (‘GHG’)
GHGs are gases that contribute to the greenhouse effect by absorbing infrared radiation. Carbon dioxide and
chlorofluorocarbons are examples of greenhouse gases.
Home Builders’ Federation (‘HBF’)
The HBF is an industry body representing the homebuilding industry in England and Wales. It represents member interests on a
national and regional level to create the best possible environment in which to deliver new homes.
Help-to-Buy
The Help-to-Buy equity loan scheme is a government scheme which provides equity loans to both first-time buyers and home
movers on newly constructed homes, subject to regional price caps. Buyers have to contribute at least 5% of the property price
as a deposit and obtain a mortgage of up to 75% (55% in London) and the government provides a loan for up to 20% (40% in
London) of the price.
Land Bank
The land bank is comprised of three tiers: i) owned or unconditionally contracted land with an implementable detailed planning
permission (‘DPP’); ii) medium-term ‘pipeline’ land owned or controlled by the Group, pending an implementable DPP; iii)
strategic long-term plots which currently have a positive planning status and are typically held under option.
Bellway p.l.c. Annual Report and Accounts 2021
167
Other InformationOther Information Glossary
Mortgage Market Review (‘MMR’)
The MMR was a comprehensive review of the mortgage market which introduced reforms to deliver a mortgage market that is
sustainable and works better for consumers.
National Planning Policy Framework (‘NPPF’)
The NPPF sets out the government’s planning policies for England and how these are expected to be applied. It provides
a framework within which local people and their accountable councils can produce their own distinctive local and
neighbourhood plans, which reflect the needs and priorities of their communities.
National House Building Council (‘NHBC’)
The NHBC is the leading warranty insurance provider and body responsible for setting standards of construction for UK
housebuilding for new and newly converted homes.
New Homes Bonus (‘NHB’)
The NHB was introduced in 2011 by the coalition government with the aim of encouraging local authorities in England to grant
planning permissions for the building of new houses in return for additional revenue. Under the scheme, the government has
been matching the council tax raised on each new home built in England.
Pipeline
Plots which are either owned or contracted by the Group, pending an implementable detailed planning permission, with
development generally expected to commence within the next three years.
Planning Permission
Usually granted by the local planning authority, this permission allows a plot of land to be built on, change its use or for an
existing building, be redeveloped or altered. Permission is either ‘outline’ when detailed plans are still to be approved, or
‘detailed’ when detailed plans have been approved.
Residential Property Developer Tax (‘RPDT’)
RPDT is a proposed tax to be charged on the profits of companies carrying out residential property development.
RIDDOR
RIDDOR refers to the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013. The regulations require
an employer to report any absence by an employee of seven days or more caused by an accident at work to the Health and
Safety Executive.
Section 75 and Section 106 Planning Agreements
These are legally-binding agreements or planning obligations entered into between a landowner and a local planning
authority, under section 75 of the Town and Country Planning (Scotland) Act 1997 or section 106 of the Town and Country
Planning Act 1990. These agreements are a way of delivering or addressing matters that are necessary to make a development
acceptable in planning terms. They are increasingly used to support the provision of services and infrastructure, such as
highways, recreational facilities, education, health and affordable housing.
Site/Phase
A site is a concise area of land on which homes are being constructed. Larger sites may be divided into a number of phases
which are developed at different times.
Social Housing
Housing that is let at low rents and on a secure basis to people in housing need. It is generally provided by councils and not-for-
profit organisations such as housing associations.
Task Force on Climate Related Financial Disclosures (‘TCFD’)
TCFD was created by the Financial Stability Board to develop consistent climate-related financial risk disclosures.
The 5% Club
Members of The 5% Club aspire to achieve 5% of their workforce in ‘earn and learn’ positions (including apprentices, sponsored
students and graduates on formalised training schemes) within 5 years of joining.
Underlying
Throughout the Annual report and Accounts, underlying refers to any statutory performance measure or alternative
performance measure which is before net legacy building safety expenses and exceptional items. The Group believes
that underlying metrics are useful for investors as these measures are closely monitored by the Directors in assessing
Bellway’s operating performance, thereby allowing investors to understand and evaluate performance on the same basis as
management.
See also Alternative Performance Measures section on pages 163 to 165.
Bellway p.l.c. Annual Report and Accounts 2021
168
Other Information Advisers and Group General Counsel and Company Secretary
Group General Counsel and Company Secretary and Registered Office
Simon Scougall
Bellway p.l.c.
Woolsington House
Woolsington
Newcastle Upon Tyne
NE13 8BF
Registered number 1372603
Registrars, Transfer Office and Shareholder Queries
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
E-mail: enquiries@linkgroup.co.uk
Tel +44 (0) 371 664 0300 Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United
Kingdom are charged at the applicable international rate. Lines are open 9.00am – 5.30pm Monday to Friday excluding bank
holidays in England and Wales
Financial Adviser
Citigroup Global Markets Limited
Stockbrokers
Citigroup Global Markets Limited
Numis Securities Limited
Bankers
Barclays Bank PLC
Lloyds Banking Group plc
National Westminster Bank plc
Santander (UK) PLC
Auditor
Ernst & Young LLP
Solicitor
Slaughter and May
Bellway p.l.c. Annual Report and Accounts 2021
169
Other InformationOther Information Shareholder Analysis
Shareholders by size of holding at 31 July 2021
Holdings
Shares
0 – 2,000
2,001 – 10,000
10,001 – 50,000
50,001 and over
Total
Number
1,889
382
171
230
%
71
14
6
9
Holding
982,798
1,726,696
4,540,940
116,145,988
2,672
100 123,396,422
Shareholders by type at 31 July 2021
Holdings
Shares
%
1
1
4
94
100
%
2
<1
<1
88
<1
8
2
Number
1,574
8
25
%
59
<1
1
Holding
2,528,637
567
24,713
964
36
108,124,572
36
37
28
1
1
1
168,487
10,412,733
2,136,713
Private shareholders
Investment trusts
Deceased Accounts
Nominee companies
Limited companies
Bank and bank nominees
Other institutions
Total
Final 2020/21 dividend – ex-dividend date
Final 2020/21 dividend – record date
AGM
DRIP election date for final 2020/21 dividend
Final 2020/21 dividend – payment date
Trading update
Announcement of 2021/22 half year results
2,762
100 123,396,422
100
Financial Calendar
2 December 2021
3 December 2021
6 December 2021
17 December 2021
12 January 2021
8 February 2022
29 March 2022
Bellway p.l.c. Annual Report and Accounts 2021
170
Other Information Designed and produced by Radley Yeldar www.ry.com
Bellway p.l.c. are committed to caring for the environment and looking for sustainable
ways to minimise our impact on it.
Printed by L&S Printing Company Ltd who are certified to ISO 14001 environmental
management system.
Printed using vegetable oil based inks.
This report is printed on Chorus Lux Silk which contains material sourced from responsibly
managed forests, certified in accordance with the FSC™ (Forest Stewardship Council™).
FSC™ – Forest Stewardship Council™. This ensures that there is an audited chain of
custody from the tree in the well-managed forest through to the finished document in the
printing factory.
ISO 14001. A pattern of control for an environmental management system against which
an organisation can be accredited by a third party.
Bellway p.l.c.
Woolsington House, Woolsington
Newcastle upon Tyne, NE13 8BF
Tel: (0191) 217 0717
www.bellwayplc.co.uk