Bellway p.l.c.
Annual Report and Accounts 2022
In This Report
About Us
Financial and Strategic Highlights 4
Who We Are 6
Strategic Report
Principal KPIs 10
Investment Case 12
Our Strategy 14
Our Business Model 16
Our Marketplace 22
Chairman’s Statement 24
Chief Executive’s Market and Operational Review 26
Group Finance Director’s Review 30
Better with Bellway Overview 34
Better with Bellway Strategy and Priorities 38
Key Stakeholder Relationships 65
Risk Management 75
Principal Risks 79
Governance
Board of Directors and Group General Counsel
andCompany Secretary
86
Chairman’s Statement on Corporate Governance 88
Board Leadership 90
Division of Responsibilities 91
Nomination Committee Report 95
Audit Committee Report 97
Remuneration Report 106
Directors’ Report 126
Independent Auditor’s Report 130
Accounts
Group Income Statement 142
Group Statement of Comprehensive Income 143
Statements of Changes in Equity 144
Balance Sheets 146
Cash Flow Statements 147
Accounting Policies 148
Notes to the Financial Statements 150
Five Year Record 187
External Reporting Frameworks
Sustainability Accounting Standards Board (SASB) 189
Global Reporting Initiative (GRI) 194
UN Sustainable Development Goals (SDGs) 199
Other Information
Glossary 201
Advisers and Group General Counsel and Company Secretary 203
Shareholder Analysis and Financial Calendar 204
1Bellway p.l.c. Annual Report and Accounts 2022
WE’RE DRIVING
GROWTH THROUGH
DISCIPLINED
LAND INVESTMENT
Disciplined land investment is supporting our growth plans, with
19,089 plots
4
contracted at an attractive rate of return, for a total
contract value of £1,300.3 million
4
.
Read more on page 5
Divisional Structure
Our divisional structure allows
localmanagement teams to use
their detailed local knowledge and
respond to specific demands in
theirarea.
Read more on page 7
New Homes Quality
Code (NHQC)
As a Group, we are proud to have early
adopted the New Homes Quality Code
from October 2022. Compliance with
the code is built into our Better with
Bellwaystrategy.
Read more on page 74
2 Bellway p.l.c. Annual Report and Accounts 2022
Record Housing Revenue
Record housing revenue of over £3.5 billion was
primarily driven by a 10.5% increase in completions
to a record 11,198. Strong nationwide demand
existed throughout the year for our quality homes.
6.9%
increase in reservation rates
About Us
Financial and Strategic Highlights 4
Who We Are 6
3Bellway p.l.c. Annual Report and Accounts 2022
Financial and Strategic Highlights
STRONG FINANCIAL
PERFORMANCE
Summary
Strong land bank and resilient balance sheet provide platform for growth and strategic flexibility.
Record housing output and revenue delivered
with further underlying margin improvement
• Total revenue rose by 13.3% to £3,536.8 million
(2021–£3,122.5 million, 2020 – £2,225.4 million),
a recordforthe Group.
• Housing completions grew by 10.5%, and ahead of our
ambitious target, to a record 11,198 homes (2021 – 10,138,
2020 – 7,522).
• Strong underlying demand across the country, with a 6.9%
increase in the overall reservation rate to 218 per week
(2021– 204, 2020 – 178).
• Further improvement in the underlying operating margin to
18.5%
2,3
(2021 – 17.0%, 2020 – 14.5%), driven by improved site
operating efficiency, management of cost pressures and
completions from more recently acquired land.
• Underlying profit before taxation rose by 22.5% to
£650.4 million
2,3
(2021 – £530.8 million, 2020 – £309.3 million).
• Resilient balance sheet, with year-end net cash of
£245.3 million
2
(2021 – £330.3 million, 2020 – £1.4 million) and
low adjusted gearing, inclusive of land creditors, of 4.4%
,2
(2021 – 3.8%, 2020 – 11.4%).
• Proposed total dividend per share growth of 19.1% to 140.0p
(2021 – 117.5p, 2020 – 50.0p), representing dividend cover of
3.0 times
2,3
underlying earnings. As previously announced,
the Board intends to progressively reduce dividend cover
to around 2.5 times
2,3
underlying earnings by 31 July 2024.
1 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.
2 Bellway uses a range of statutory performance measures and alternatives performance measures when reviewing the performance of the Group against its strategy.
Definitions ofthealternative performance measures, and a reconciliation to statutory performance measures, are included in note 28.
3 Underlying refers to any statutory performance measure or alternative performance measure before net legacy building safety expense and exceptional items (note 2).
4 Includes the Group’s share of land contracted through joint venture partners comprising 237 plots (2021 – 882 plots, 2020 – 203 plots), with a contract value of £12.7 million
(2021 – £39.2 million, 2020 – £15.3 million) across 1 site (2021 – 2 sites, 2020 – 1 site).
5 Includes the Group’s share of land owned and controlled through joint venture partners comprising 962 plots (2021 – 938 plots, 2020 – 472 plots).
6 As measured by the Home Builders’ Federation using the eight week NHBC Customer Satisfaction survey.
7 Total scope 3 emissions are reported in line with the targets validated by the Science Based Target initiative, and exclude category 11b (use of sold products – indirect).
Categories 8, 9, 10, 14 and 15 are not relevant to the Group.
8 Comparatives are for the year ended 31 July 2021 or as at 31 July 2021 (‘2021’) or are for the year ended 31 July 2020 or as at 31 July 2020 (‘2020’) unless otherwise stated.
Year ended
31July 2022
Year ended
31July 2021 Movement
Revenue £3,536.8m £3,122.5m +13.3%
Gross profit (underlying) £787.0m
2,3
£651.9m
2,3
+20.7%
Gross margin (underlying) 22.3%
2,3
20.9%
2,3
+140 bps
Operating profit (underlying) £653.2m
2,3
£531.5m
2,3
+22.9%
Operating margin (underlying) 18.5%
2,3
17.0%
2,3
+150 bps
Profit before taxation (underlying) £650.4m
2,3
£530.8m
2,3
+22.5%
Earnings per share (underlying) 420.8p
2,3
350.9p
2,3
+19.9%
Net legacy building safety expense £346.2m £51.8m +568.3%
Profit before taxation £304.2m £479.0m (36.5%)
Earnings per share 196.9p 316.9p (37.9%)
Proposed total dividend per share 140.0p 117.5p +19.1%
Net asset value per share 2,727p
2
2,664p
2
+2.4%
Net cash £245.3m
2
£330.3m
2
(25.7%)
Land bank (total plots) 97,706
5
86,571
,5
+12.9%
RoCE (underlying) 19.4%
2,3
16.9%
2,3
+250 bps
About Us
4 Bellway p.l.c. Annual Report and Accounts 2022
CLEAR STRATEGIC
PRIORITIES
Strengthened land bank supports outlet growth
and underpins long-term growth ambitions
• Another year of disciplined land investment in high quality
locations, with 19,089 plots
4
(2021 – 19,819 plots, 2020 – 12,124
plots) contracted at attractive rates of return, for a total
contract value of £1,300.3 million
4
(2021 – £1,066.0 million,
2020 – £777.7 million).
• Additional investment in our strategic land team, resulting in
the strategic land holdings growing further to 35,600 plots
at 31 July 2022 (2021 – 30,400 plots, 2020 – 27,300 plots),
providing scope for longer-term outlet and volume growth.
• In total, our overall land bank, comprising 97,706 plots
5
(2021 – 86,571 plots, 2020 – 72,361 plots), provides scope to
increase the number of sales outlets in the second half of
the current financial year and beyond, notwithstanding
ongoing sector-wide delays in the planning system.
• The strengthened overall land bank enables the Group to
reinforce its disciplined financial land buying criteria in the
year ahead, while retaining its long-term capacity to grow
volume output to over 16,000 homes per annum.
Better with Bellway – our long-term commitment
to sustainable business practices
• In March 2022, we launched Better with Bellway, our new
sustainability strategy. The strategy covers eight priority
areas, each with their own targets and headline KPIs,
aligned to the underlying operations of the business.
• Commitment to significantly reduce carbon emissions,
withambitious targets aligned to the Paris Agreement,
which go beyond the requirements of the Future Homes
Standard. Our carbon reduction targets have recently been
validated by the Science Based Target initiative (‘SBTi’).
• Sustained focus on build quality and customer satisfaction
through our ‘Customer First’ programme is reflected by
Bellway retaining its position as a five-star
6
homebuilder for
the sixth consecutive year.
• Aiming to be an Employer of Choice by retaining our
people and attracting the best talent from across the
industry. We are delighted with the results from our recent
employee engagement survey in which 95% of colleagues
said they would recommend Bellway as ‘a great place
to work’.
• We have provided an additional net £346.2 million in
relation to legacy building safety, as an adjusting item,
mainly as a result of the Group’s commitment to the
Building Safety Pledge (the ‘Pledge’) in April 2022 and the
Developers’ Pact with the Welsh Government, earlier this
month. This primarily comprises a net £326.6 million charge
in the second half, which is in line with previous guidance.
The total amount set aside in relation to England, Scotland
and Wales since 2017 is £513.7 million, demonstrating our
continued commitment to act responsibly with regards to
building safety.
• Proficient remediation of legacy schemes to be completed
through our new Building Safety division, led by a recently
appointed Managing Director and supported by an
experienced team. This division is separately resourced so
as not to detract from day-to-day operations and growth
prospects elsewhere in the Group.
Current trading and growth outlook
• Bellway entered the new financial year with a strong
forward order book. We have also increased our investment
in work-in-progress, although this is weighted towards
earlier stages of production and stock available for sale is
currently lower than the prior year.
• Elevated demand since the start of the pandemic has
moderated and in the nine weeks since 1 August, weekly
reservations were 191 per week (1 August to 3 October 2021
– 218 per week, 1 August to 4 October 2020 – 239 per week),
a decrease of 12.4% compared to the equivalent period in
the prior year.
• The Group retains a strong forward sales position with a
value of £2,093.8 million
2
as at 2 October (3 October 2021 –
£1,966.3 million, 4 October 2020 – £1,869.6 million). The order
book comprised 7,257 homes (3 October 2021 – 6,731
homes, 4 October 2020 – 6,624 homes), of which 71% were
exchanged (3 October 2021 – 62%, 4 October 2020 – 62%).
• While Bellway entered the year with a strong forward order
book, given the backdrop of rising interest rates and wider
economic uncertainty, the Board currently expects to
deliver volume at a similar level to the prior year. The final
outturn will be dependent on the autumn and spring
selling seasons and the Group will prioritise its strong
disciplines in relation to both margin and quality of profit.
• Pricing has remained firm and we anticipate an overall
average selling price of around £300,000 (2022 – £314,399)
in the current year. The moderation from 2022 primarily
reflects a higher proportion of social housing completions.
• Given the current economic backdrop, the range of
potential outcomes for underlying operating margin in
financial year 2023 is wider than the prior year. The result
will be partly supported by our substantial order book
and,assuming current prices and volume output similar to
last year, we expect the underlying operating margin for the
current financial year to be over 18%
2,3
.
• Over the long-term, the Group has significant capacity to
deliver further increases in output. Our growth will continue
to be disciplined, while maintaining the high standard of
our product, and a clear focus on delivering value creation
for shareholders.
• The combined strength of our balance sheet, land bank
and order book provide strategic flexibility to respond
to changes in the housing market, the long-term
fundamentals of which remain strong. There is a shortage of
high quality, energy efficient and affordable homes across
the country and Bellway will continue to play an important
role in increasing housing supply in the years ahead.
About Us
5Bellway p.l.c. Annual Report and Accounts 2022
Who We Are
Our brands represent our commitment to the different needs
of our customers. We understand that buying a home is one of
the biggest decisions you will ever make and each brand offers
choice, whilst ensuring a consistent level of service.
O U R T H R E E
BRANDS MEET
THE NEEDS OF
OUR CUSTOMERS
Bellway is our main brand. Bellway began as a small
family business in 1946, witha 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.
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.
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.
861
Homes sold
9,371
Homes sold
966
Homes sold
Bellway p.l.c. Annual Report and Accounts 20226
About Us
Not to scale
Our Structure
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 the high expectations ofour
customers and contribute to creating
strong local communities.
The divisional teams are supported
by our Regional Chairmen and by our
specialist Group teams.
22 divisions
covering the main population centres
across England, Scotland and Wales
3,042 people
employed in the Group as at 31 July 2022
Our aim is to operate our business in an ethical
and sustainable manner, while at the same time
building attractive, desirable and sustainable
developments where customers want to live in
harmony with existing communities.
WE’RE GUIDED
BY A CLEAR
PURPOSE
Divisional Office Locations
About Us
7Bellway p.l.c. Annual Report and Accounts 2022
Artisan Design
A standardised suite of house
types has enabled us to be more
efficient and control our costs,
while continuing to produce
consistently high quality,
desirable, energy efficient homes.
Putting our
customers first
Our Customer First programme
is designed to put the customer
at the heart of everything we do.
A key element of this is ensuring
we communicate with our
customers well. We have made
a commitment to respond to all
customers as quickly as possible.
Here at Bellway, we’re proud of the 5-star
6
homebuilder award we
received in the HBF’s most recently published eight-week survey, but
our aim is to go further. Our Customer First programme will build on
our previous success and equip us as we look to exceed our existing
levels of customer satisfaction.
Read more on page 21.
WE’RE NOT JUST
BUILDING HOMES,
WE’RE BUILDING
COMMUNITIES
8 Bellway p.l.c. Annual Report and Accounts 2022
Strategic
Report
Principal KPIs 10
Investment Case 12
Our Strategy 14
Our Business Model 16
Our Marketplace 22
Chairman’s Statement 24
Chief Executive’s Market
and Operational Review
26
Group Finance Director’s Review 30
Better with Bellway Overview 34
Better with Bellway Strategy
and Priorities
38
Key Stakeholder Relationships 65
Risk Management 75
Principal Risks 79
Aspiring for better
Although we are happy to receive such a high
rating from our customers, we want to do better.
Our focus is on increasing our year-on-year score
in the 9-month NHBC survey, achieving at least
90% by July 2026.
90% target
to be achieved in 9-month NHBC survey by 2026
Employer of Choice
In our third Employee Engagement
Survey in July 2022, 95% of staff
would recommend Bellway as
‘a great place to work’.
95%
of staff would recommend
Bellwayasa‘greatplaceto work’
9Bellway p.l.c. Annual Report and Accounts 2022
Principal KPIs
The Group has ten principal KPIs, which are shown below. Our secondary
performancemeasures, which support these KPIs, are shown on pages 16 to 21.
Financial and Operational KPIs
2022
2021
2020
Number of homes sold (homes)
11,198 homes
+
10.5%
10,138
11,198
7,522
Net asset value per
ordinary share (p)
(2)
2,727p
+
2.4%
202220212020
2,664
2,727
2,427
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.
Operating profit (£m)
£309.0m
(
35.6%)
2022
2021
2020
479.7
309.0
249.1
Underlying operating profit (£m)
(2)(3)
£653.2m
+
22.9%
2022
2021
2020
531.5
653.2
321.7
R
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.
Operating margin (%)
(2)
8.7%
(
670bps)
2022
2021
2020
15.4
8.7
11.2
Underlying operating
margin (%)
(2)(3)
18.5%
+
150bps
2022
2021
2020
17.0
18.5
14.5
Operating margin demonstrates how efficiently the business is being operated. Underlying operating margin is before net legacy building
safety expense.
Return on capital employed (%)
(2)
9.2%
(
600 bps)
2022
2021
2020
15.2
9.2
8.3
Underlying return on capital
employed (%)
(2)(3)
19.4%
+
250bps
2022
2021
2020
16.9
19.4
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.
Earnings per ordinary share (p)
196.9p
(37.9%)
2022
2021
2020
316.9
196.9
156.6
Total dividend per
ordinary share (p)
140.0p
+
19.1%
2022
2021
2020
117.5
140.0
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 2022 final dividend figure is proposed.
Strategic Report
10 Bellway p.l.c. Annual Report and Accounts 2022
The Introduction of the Better with Bellway strategy during the year has led to the ESG
KPIs previously reported to be revised. The Group now has ten headline KPIs mapped to
our Better with Bellway strategy, those which are currently reportable are shown below.
Read more on pages 34 to 64.
Better with Bellway KPIs
HBF 9 month survey score (%)
82.1%
+
2.2ppt
2022
2021
79.9
82.1
Customers and Communities
R
Employees who would recommend
Bellway as ‘a great place to work’
3 year average score (%)
93.0%
2022
93
Employer of Choice
This KPI shows the Group’s commitment to customer service,
withthe long-term aim to achieve a 90% score by July 2026.
This KPI shows the average percentage of employees that stated
they would recommend Bellway as ‘a great place to work’ in our
Employee Engagement Survey over a three-year period.
Scope 1 and 2 emissions (tonnes)
18,405 tonnes
(5.5%)
2022
2021
19,484
18,405
Carbon Reductions
Scope 3 emissions (tonnes CO
2
e per m
2
)
1.94 tonnes
2022
1.94
Demonstrates how the Group is working towards reducing our
carbon emissions, in line with our pledge to reduce scope 1 and 2
emissions by 46% in absolute terms by July 2030.
The Group is committed to reduce scope 3 GHG emissions by 55%
per square metre of completed floor area by July 2030, against FY19
baseline of 1.94 tonnes.
RIDDOR score
359.98
incidents
(7.0%)
2022
2021
336.49
359.98
Building Quality Homes, Safely
Applicable employees trained
on Group Fire Safety Policy
(%)
69
%
2022
69
Number of RIDDOR seven-day reportable incidents per 100,000 site
operatives. We aim to reduce the average RIDDOR rate measured
over a three-year period to under 305 incidents by July 2024.
This KPI demonstrates the Group’s commitment to fire safety,
wehave identified additional individuals for training in FY23.
CRUK fundraising total (£m)
£2.56m
+
£610K
2022
2021
1.95
2.56
Charitable Engagement
Waste per home built (tonnes)
8.3 tonnes
(6.7%)
2022
2021
8.9
8.3
Resource Efficiency
This KPI indicates the cumulative fundraising total for our charity
partner Cancer Research UK since 2016, with the target to raise
£3 million by December 2023.
Shows the Group’s commitment to resource efficiency, we aim to
reduce waste per completed unit by 20%, to 7.1 tonnes by FY25.
Note:
Link to remuneration – see pages 106 to 125.
11Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
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. This is supported by our new
Better with Bellway strategy (read more on page 15).
Our award-winning homes
We build high-quality homes designed to complement
the style of existing local architecture in communities,
which meets local demand and enhances 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.
This is achieved via our Artisan Collection of standard
house types (more details on page 20). We also provide
affordable housing and homes to housing associations for
social housing.
Our focus is to provide desirable, traditional family housing
across all our divisions, and apartments in the more
affordable outer commuter zones of London.
5-star
6
homebuilder
Rating from the eight-week Home Builders’
Federation CustomerSatisfactionsurvey
Our approach to land
and capacity for growth
Bellway’s experienced land teams have developed a
programme of disciplined land investment, both in the
short-term land bank and the strategic land portfolio to
support our long-term growth ambitions.
We have maintained a focus on acquiring sites in desirable
locations where customers want to live and we consider
connectivity to transport links, while taking into account
our environmental impact. During the year we expanded
our strategic land team. This dedicated team of qualified
specialists, who are highly experienced in acquiring and
delivering land through the planning system, are overseen
by a central Group team. Their expertise is available to
assist landowners and development partners in ensuring
the delivery of planning permissions and to maximise the
value of land. Proactive land investment, along with a strong
balance sheet, ensures the Group is well placed to deliver
growth and our longer-term operating margin targets.
GROWING VALUE FOR
OUR SHAREHOLDERS
Strategic Report
Bellway p.l.c. Annual Report and Accounts 202212
Better with Bellway
Sustainability is key to our business and our recently
launched sustainability strategy, Better with Bellway,
embodies our approach to responsible and sustainable
business practice. Our sustainable approach is not just an
add-on, it is a key part of our business strategy. It is what
we do daily, ‘putting people and the planet first’.
Better with Bellway addresses our key sustainability
risks and opportunities, ensuring that we are aligned to
national and international standards, and responding to
the views of our stakeholders.
Our customers
We aim to put customers at the heart of everything we do.
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 as part of the eight week HBF
survey. Our Customer First initiative drives improvements in
quality and works to develop and share best practice across
the Group.
9 out of 10
customers say they would recommend Bellway
to a friend buying a new home.
Our people
Our people are the key to our success and we aim to
provide them with rewarding and fulfilling careers.
Bellway has long had a reputation as a good employer,
taking an interest in our workforce and supporting career
development. Results of our 2022 Employee Engagement
Survey show that 95% of colleagues would recommend
Bellway as ‘a great place to work’ and many employees
have spent a large proportion of their working lives with
us. However, we are not complacent and, as part of our
Better with Bellway strategy, we are striving to be an
Employer of Choice. We aim to create a safe, diverse,
and inclusive environment, as well as investing in and
upskilling our workforce.
Read about our Better with Bellway strategy on page 15.
13Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Our Strategy
Delivering volume growth
Overview
Delivering disciplined volume growth through our national
divisional structure, selecting the right land and managing
theplanning process.
A summary of our performance against this strategic priority,
along with our plans for further progress, is detailed below.
How we performed in 2021/22
• Our disciplined approach towards land acquisition has led
to a significant investment in new sites and resulted in a
record land bank.
• Bellway has performed well throughout the financial year,
benefitting from strong underlying demand across the
country for our high-quality new homes.
• Volume output of 11,198 homes and housing revenue has
reached record levels.
• Sales demand remained strong across the country with
a6.9% increase in the overall reservation rate.
Our plans for 2022/23
• We will continue to invest in strategic land, as it allowed us
to secure and control land with less capital investment and
more flexibilities.
• We will maintain our current disciplined growth strategy,
whilst being mindful of market conditions.
• We plan to open around 120 new outlets in the financial
year 2023.
Value creation for shareholders
Overview
Crucial to the success of our volume growth strategy is our
ability to deliver value for shareholders. We believe that
valuegeneration is best evaluated through capital growth
and by increasing the net asset value per share, together with
thepayment 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 is the steps we take to improve
operating margin.
How we performed in 2021/22
• We have made further design improvements to the
Artisan standard house types including standardisation,
procurement efficiencies and optimisation of site layouts.
• We have benchmarked Artisan build costs across all
divisions to drive cost efficiencies.
• We have embedded a new margin improvement campaign
which now forms part of monthly cost reviews, whilst
sharing best practice and procurement efficiencies.
• We have continued with our detailed programme of value
engineering reviews across our sites and divisions.
Our plans for 2022/23
• We will continue to design and develop new standard
house types into the Artisan Collection.
• We will continue to benchmark Artisan build costs across all
divisions and perform monthly cost reviews.
• As our subcontractors become more familiar the Artisan
Collection we will drive opportunities to improve
build speed.
Strategic priorities
As set out in the Chairman’s Statement, to achieve our overall strategy we have identified the following three
strategic priorities:
The metrics we use to measure our performance are on pages 10 to 11.
Delivering
volume growth
Value creation for
shareholders
Better with Bellway
Strategic Report
14 Bellway p.l.c. Annual Report and Accounts 2022
Bellway’s strategy is made up of three pillars: delivering volume growth; value
creation for shareholders; and Better with Bellway; utilising the Group’s operational
and balance sheet capacity, combined with a strong focus on RoCE.
• We will expand our 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
an increase in value for shareholders through a combination
of the ongoing growth in NAV anddividend payments.
A summary of our performance against this strategic priority,
along with our plans for further progress, is detailed below.
How we performed in 2021/22
• Bellway has continued to invest capital into land and
work-in-progress in areas with high demand, without
compromising the RoCE and margin requirements,
toensure that the Group is well placed to deliver growth.
• Paid dividends of £157.2 million.
• Increased NAV by 2.4% to 2,727p
2
, with the increase
achieved due to strong growth in the underlying earnings
and not withstanding a £346.2 million charge in the year in
relation to legacy building safety issues.
Our plans for 2022/23
• Our current strong land bank position allows us to reinforce
our disciplined land buying criteria, ensuring that we are
selective in the year ahead. We will still cautiously consider
land purchases to maintain operational certainty, but we will
contract fewer plots and we will reduce cash expenditure
on land.
• 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 2021/22 dividend is approved, the total dividend will be
covered by underlying earnings by three times
2
.
Focus on capital employed
Ensuring that our assets are used in the most efficient way to
deliver shareholder returns.
How we performed in 2021/22
• 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 our land
investment and work-in-progress.
Our plans for 2022/23
• 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 investment in land
and work-in-progress.
Maintaining a flexible capital structure
We use a combination of cash, debt financing 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 2021/22
• We have maintained our current banking relationships.
• The Group has maintained its sterling US Private Placement
for a total amount of £130 million with maturity dates in 2028
and 2031.
• We have appointed a Group IR Director to enhance our
current investor relations activities.
Our plans for 2022/23
• We will maintain our current banking and US Private
Placement relationships.
• We will develop our current investor relations activities with
the support of our recently appointed Group IR Director.
Better with Bellway
Overview
Sustainability is at the heart of our business and our new
Better with Bellway strategy embodies our approach to
responsible and sustainable business practice.
Our sustainable approach is not just an add-on, it is a key part
of our business strategy. It is what we do daily, ‘putting people
and the planet first’.
Better with Bellway has eight strategic business priorities that
are designed to help Bellway thrive, now and into the future.
They put our long-term commitment to responsible and
sustainable practice at the core of our operational strategy.
Putting people first means prioritising our customers and the
communities we serve and create, by building quality homes.
It’s about striving to become an Employer of Choice by
focusing on how we can upskill our workforce and nurture a
culture of inclusion where everyone is welcome and able to
reach their full potential.
Putting the planet first means delivering on our commitment
to build low carbon homes, reducing our own carbon
footprint and considering our customer’s carbon footprint,
while reducing and rethinking our use of resources to avoid
waste, minimise energy and water usage, whilst also sourcing
materials responsibly.
A summary of our performance against this strategic priority,
along with our plans for the future, is detailed on pages 34
to 64.
15Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Our Business Model
The following timeline demonstrates how we create value from selecting land to
selling homes.
Our value chain
Select the right land and manage the
planning process
Read more on pages 18 and 19.
Design desirable homes
and construct them safely
Read more on page 20.
What we do
• We construct a wide range of homes, with a focus on our
Artisan Collection of standard house types, to suit a variety
of customer budgets and lifestyles.
• Within the Artisan Collection, there are numerous unique
designs which have been developed to adhere to differing
regional planning requirements. These standard house
types drive efficiencies during construction.
• 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 high 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.
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 by the Executive Directors on
whether to purchase a site. Full Board approval may also
be required depending upon the value and nature of the
proposed acquisition.
• 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.
• Our land bank is comprised of three tiers:
i) Owned or unconditionally contracted land with DPP.
ii) Pipeline of land owned or controlled pending DPP, with
development expected to commence within the next
three years.
iii) Strategic land, which is longer-term 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.
Strategic Report
16 Bellway p.l.c. Annual Report and Accounts 2022
Selling homes and delivering an
excellent customer sales experience
Read more on page 21.
What we do
• Bellway provides excellent customer service from the
moment our customers decide to look for a new home
and 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 both our Group Customer
Experience Director and Group Customer Care Director.
• Our Customer First initiative continues at pace to drive
future improvements to quality and customer service.
• Our retention of the HBF 5-star
6
homebuilder status for the
sixth 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.
Better with Bellway
These eight business priorities are integral to
everything we do and drive the long-term success
of our business model.
Customers and Communities
Putting customers and communities
attheheart of everything that we do.
Employer of Choice
Creating an environment that our
colleagues can thrive in.
Carbon Reductions
Delivering low carbon homes.
Building Quality Homes, Safely
Quality and safety first for everyone.
Sustainable Supply Chain
Driving sustainability through
long-term partnerships.
Resource Efficiency
Designing out waste by building better.
Biodiversity
Protecting and preserving nature.
Charitable Engagement
Giving, to build better lives.
Read more on pages 34 to 64.
17Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Our Business Model continued
Select the right land
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 by
the Executive Directors whether to purchase a site. Full 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.
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.
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 debt financing arrangements have
enabled the Group to continue its front-footed, yet disciplined
approach to land acquisition.
Alignment with Better with Bellway
Biodiversity
By building a significant number of quality homes
on brownfield land we are contributing to the
regeneration of areas in mainly urban locations.
Our land buying teams assess biodiversity constraints
and opportunities at the earliest stage in site selection
and are supported by our Head of Biodiversity and
Group Strategic Land team.
Select the right land and manage the planning process
Sufficient land bank plots with DPP
A
chieved
2022
2021
2020
AchievedAchieved Achieved
R
Gross margin (%)
(2)
12.5%
(
670bps)
2022
2021
2020
19.2
12.5
15.7
Underlying gross margin (%)
(2)(3)
22.3%
+
140bps
2022
2021
2020
20.9
22.3
19.0
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 our 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.
Note:
Link to remuneration – see pages 106 to 125..
Strategic Report
18 Bellway p.l.c. Annual Report and Accounts 2022
Manage the planning process
Our land bank comprises of three tiers:
1. Owned or unconditionally contracted land with DPP.
2. Pipeline of land owned or controlled pending DPP, with
development expected to commence within the next
three years.
3. Strategic land, which is longer-term 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.
The risks
• Delays and increasing complexity and cost in the planning
process. There has been no change in this risk during
the year.
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 Better with Bellway
Customers and Communities
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 (England and Wales) and
section 75 (Scotland) contributions and Community
Infrastructure Levy payments, and through the
provision of the New Homes Bonus.
Number of plots acquired
with DPP (plots)
1,345 plots
(27.1%)
2022
2021
2020
1,844
1,630
1,345
Number of plots converted
from medium term ‘pipeline’ (plots)
11,352 plots
+3.8%
2022
2021
2020
10,938
7,760
11,352
Number of plots in owned and
controlled land bank with DPP (plots)
32,344 plots
+4.6%
2022
2021
2020
30,933
28,289
32,344
Number of plots in ‘pipeline’ (plots)
28,800 plots
+18.5%
2022
2021
2020
24,300
16,300
28,800
Number of plots in strategic
land bank – longer-term interests
(plots)
26,200 plots
+20.7%
2022
2021
2020
21,700
18,400
26,200
Number of plots in
strategic land bank –
positive planning status (plots)
9,400 plots
+8.0%
2022
2021
2020
8,700
9,100
9,400
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.
19Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Our Business Model continued
We construct a wide range of homes, with a focus on our
Artisan collection of 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 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.
The risks
• Shortage of building materials at competitive prices.
• Shortage of appropriately skilled construction people
and subcontractors.
• Significant health and safety risks inherent in the
construction process.
• There has been no change to these risks during the year.
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 Better with Bellway
Building Quality Homes, Safely
The health and safety of everyone who works on
and visits any of our locations is paramount.
Carbon Reductions
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.
Resource Efficiency
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.
Sustainable Supply Chain
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.
How we measure our performance
The health, safety and wellbeing of our employees,
subcontractors and visitors to our developments is paramount
and health and safety performance is taken into account
as part of the overall assessment of the Executive Directors’
potential bonus payment. Improvements in reporting
procedures, an increase in the number of operatives on site
coupled with a reduced level of experience as a result of
COVID-19 has led to an increase in the Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations (RIDDOR)
rate. However the significant reduction in the slips, trips and
falls incident rates demonstrates the Group’s continued
commitment to improving health and safety standards.
Design desirable homes and construct them safely
Slips, trips and falls (incidents)
78 incidents
(
39.5%)
2022
2021
2020
129
78
99
Number of NHBC Pride in the
Job Awards (awards)
36 awards
(7.7%)
2022
2021
2020
39
36
44
Number of RIDDOR seven-day
reportable incidents per 100,000
site operatives (incidents)
359.98 incidents
(
7%)
2022
2021
2020
336.49
359.98
203.12
Strategic Report
20 Bellway p.l.c. Annual Report and Accounts 2022
Bellway provides excellent customer service from the
moment our customers decide to look for a new home
and throughout all stages of their journey, including the
early years of home ownership. We have developed our
Customer First programme to support all Bellway employees
and subcontractors to deliver to these high standards of
customer service.
We have dedicated customer care teams within each division
delivering high levels of customer service and these are
supported by both our Group Customer Experience Director
and Group Customer Care Director.
Our retention of the HBF 5-star
6
homebuilder status for the
sixth 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 also created a subcontractor portal to better manage
any post-completion issues reported by our customers.
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 risk 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 79 to
83. These risks have not changed during the year.
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 Better with Bellway
Customers and Communities
Customer handover packs contain information on
sustainable travel, local recycling centres and energy
efficiency advice.
Carbon Reductions
We continue to improve energy efficiency by
building homes that are, on average, more energy-
efficient than is required by building regulations.
Selling homes and delivering an excellent
customerexperience
2022
2021
2020
Number of homes sold (homes)
11,198 homes
+
10.5%
10,138
11,198
7,522
Order book value at 31 July (£m)
(2)
£2,114.3m
+4.5%
2022
2021
2020
2,022.3
1,760.2
2,114.3
Reservations rate (homes per week)
218
homes
per week
+6.9%
2022
2021
2020
204
178
218
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 Bellway to a Friend?’,
which is the driver for the 5-star
6
homebuilder status, and overall
satisfaction score from the HBF 8 week survey, which captures
customer feedback of experiences during the first 8 weeks of
home ownership.
Bellway were awarded 5-star
6
homebuilder status in March
2022 for the period ended 30 September 2021.
The final Recommend a Friend score was 93.6% against
a target of 90%, an improvement of 0.1ppt from the
previous year.
NHBC overall score (%)
86.9%
+
0.3ppt
2022
2021
2020
86.6
86.9
85.5
R
NHBC 9-month would you
recommend Bellway to a friend
satisfaction score (%)
82.1%
+
2.2ppt
2022
2021
2020
79.980.1
82.1
R
Note:
Link to remuneration – see pages 106 to 125.
21Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Our Marketplace
The long-term fundamentals of the UK housing market remain positive. Good quality, affordably
priced housing is in short supply across many parts of the country and in recent years this has been
exacerbated by bottlenecks in the planning system.
Given the backdrop of rising interest rates and wider economic uncertainty, the Board currently expects to deliver volume at a
similar level to the prior year. Despite short-term challenges for the mortgage market, in the medium and longer-term, we expect
conditions to stabilise and there to be a be a sustainable supply of mortgages.
1996 1998
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
10
9
8
7
6
5
4
3
2
1
0
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Affordability of houses in the UK
Mortgage repayments as a percentage of earnings
Source: Halifax
House price: earnings
Mortgage repayment to earnings House price to earnings
Demand factors
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.
Even amongst the recent market uncertainty, there remains
competition in the mortgage market, and although new
mortgages are reflecting the recent increase in borrowing
costs, mortgages remain affordable.
Average mortgage repayments, as a percentage of earnings,
fell from a peak in 2007, following the downturn in the
housing market in 2008/09. There has been moderate
increases to interest rates since December 2021 which are
expected to continue in 2023. Consequently, the costs of
mortgages have increased, although they remain low in
comparison to historical levels. The chart at the bottom of the
page demonstrates the affordability of houses in the UK.
The availability of mortgages
Over recent weeks, some lenders have sought to moderate
the number of fixed rate mortgages, in response to shorter-term
uncertainty over fundings costs. We do not expect a long-term
structural decline in the availability of mortgage finance and a
number of major lenders have already relaunched mortgage
products to reflect the recent increase in borrowing costs.
In general, there remains good availability of finance, particularly
for customers with higher deposits.
The equity loan element of the Help-to-Buy scheme in England
will close to new applications on the 31 October 2022, and
remain supported up to 31 March 2023. The utilisation of Help-
to-Buy continues to fall, having been used by customers in 22%
of legal completions (2021 – 39%, 2020 – 35%), with uptake most
pronounced on apartment schemes in, and around, London.
The availability of 95% loan-to-value mortgages remains
relatively limited, although these products are gradually
being reintroducing for new build properties, including those
provided through the Deposit Unlock scheme. The availability
of this product provides some encouragement regarding the
availability of alternative financing arrangements which may
help to mitigate the withdrawal of Help-to-Buy for completions
beyond March 2023, although uptake is currently low.
Affordability of houses in the UK
The stamp duty land tax holiday
Following an increase in the stamp duty tax threshold during
the COVID-19 pandemic, the threshold was reduced, so that
from the 1 July 2021 to 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.
On the 23 September 2022 the Government announced that
the stamp duty tax threshold would be increased immediately
to £425,000 for first time buyers, and £250,000 for non-first
time buyers.
House prices
As per the below table, house prices as a multiple of earnings
have slowly risen over the last three years in the UK, however
mortgage repayments to earnings remain relatively steady.
With the rise of interest rates to combat inflation, mortgage
repayments to earnings is expected to increase.
Demand
Demand for high-quality new homes continues to be strong.
Strategic Report
22 Bellway p.l.c. Annual Report and Accounts 2022
Supply factors
Land supply and planning permissions
The land market provides good buying opportunities, with
the market for larger sites, typically over 150 units, attracting
lower levels of competition and can offer higher expected
returns than smaller sites. House prices have increased,
supporting land values and hence vendors’ appetite to sell.
The ability to obtain planning permission increased during
2021 after a low in 2020 due to COVID-19. The number of
planning permissions granted in 2021 is still below the average
achieved in the 3 years before COVID-19, demonstrating
some delays experienced in the planning system. This is
evidenced in the chart below, which shows a 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
the requirements of the Group’s volume targets. The system
remains slow, constrained by a COVID related backlog,
with this continuing to have a dampening effect on outlet
openings across the wider sector. 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 and affordability of labour andmaterials
Concerns with regards to material availability have generally
eased over the course of this calendar year, although
there can remain ad hoc shortages at a regional level,
with bricks, blocksand roof tiles often on extended lead-
in times. Good on-site disciplines and familiarity with our
Artisan standard house type range help to ease these
production constraints.
There continues to be upward pressure on material costs which
have increased by mid-to-high single digit inflation during the
financial year.
The labour market has tightened, but we are able to secure
the supply of labour due to robust forecasting and forward
planning of labour requirements across the Group. We have
strong, well established relationships with our key suppliers
which helps to mitigate the challenges being faced by
the industry.
Summary of market backdrop
There is wider economic uncertainty due to high levels of
inflation, 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 a competitive mortgage market.
• 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 cost of living rises and political uncertainty in the UK, 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.
361,000
330,000
382,000
353,000
362,000
Planning permissions granted (GB)
Pla
nning permissions granted (GB)
361
,000
+
9.4%
Pla
nning projects approved (GB)
13
,611
+
11.3%
Planning permissions granted and projects approved (GB)
2017 2018 2019 2020
2021
23Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Introduction
This is my first statement as Non-Executive Chairman of
Bellway, following my appointment at the beginning of April
2022. I am delighted to have joined the Group given its long-
term growth potential and financial resilience. In my first few
months I have been impressed by the focus on build quality,
customer service and the Group’s responsible approach
to business.
Bellway has delivered another strong performance with
volume output and revenue reaching record levels.
The benefits of our ongoing disciplined investment in land
have also helped drive improvements in the underlying
operating margin and return on capital employed.
Underlying earnings per share rose by 19.9% to 420.8p
2,3
(2021 – 350.9p, 2020 – 204.3p).
The Group has a strong order book and a robust balance
sheet, and together with its operational expertise, I am
confident Bellway is very well-placed to navigate through the
current headwinds in the wider economy and deliver on its
long-term growth strategy.
Our people
It is largely the dedication and hard work of our colleagues,
subcontractors and supply chain partners that have made this
strong performance possible. On behalf of the Board, I would
like to express our gratitude to all those who have contributed
to these results, for their resilience, resourcefulness, and
ongoing commitment.
Strategic priorities
Bellway’s strong balance sheet provides the financial flexibility
and capacity to invest in the future and, together with our
commitment to responsible business practices, supports our
three strategic priorities to:
• Achieve long-term volume growth,
• Deliver value creation for shareholders, and
• Operate responsibly and sustainably through our
‘Betterwith Bellway’ strategy.
Long-term volume growth
The long-term fundamentals of the housing market remain
positive. Good quality, affordably priced housing is in short
supply across many parts of the country and in recent
years this has been exacerbated by bottlenecks in the
planning system.
Notwithstanding this, and to meet the rising demand for new
homes, Bellway has significantly expanded its geographical
coverage across England, Scotland and Wales. Through the
successful execution of our organic growth strategy, we
have delivered a 114% increase in volume output over the
last decade. Fundamental to this has been the expansion of
our strong divisional structure from 13 to 22 trading divisions
over the same period. Each of our divisional teams have
the expertise, experience and local knowledge to purchase
land, source materials and subcontract labour to deliver high
quality homes to our customers.
Our operational structure has the capacity to organically grow
volume in the longer-term to over 16,000 homes per annum
through a combination of growing output in recently opened
divisions and targeting our more mature divisions to create
opportunities for further geographical expansion.
Value creation for shareholders
Bellway’s volume growth strategy is inextricably linked to the
generation of long-term value for our shareholders. The Board
continues to believe that value creation from the business
is best gauged against capital growth by increasing net
asset value per share (‘NAV’) and supplemented by paying
regular dividends.
In the year ended 31 July 2022, NAV rose by 2.4% to 2,727p
2
(2021 – 2,664p, 2020 – 2,427p), with the increase achieved
due to the strong growth in underlying earnings and
notwithstanding a £346.2 million charge in the year in relation
to legacy building safety issues. In addition, the Board is
pleased to recommend a 15.2% increase in the final dividend
to 95.0p per share (2021 – 82.5p, 2020 – 50.0p). This brings
the total proposed dividend to 140.0p per share (2021 – 117.5p,
2020 – 50.0p), an increase of 19.1%. If approved, the overall
dividend will be covered 3.0 times
2,3
by underlying earnings
(2021 – 3.0 times, 2020 – 4.1 times).
BELLWAY IS VERY WELL-PLACED
TO NAVIGATE THROUGH THE
CURRENTHEADWINDS
The Group has a strong order book and a robust balance
sheet, and together with its operational expertise, I am
confident Bellway is very well-placed to navigate through
the current headwinds in the wider economy and deliver on
its long-term growth strategy.
John Tutte
Chairman
Chairman’s Statement
Strategic Report
24 Bellway p.l.c. Annual Report and Accounts 2022
Given the Group’s capacity for, and track-record of,
deliveringlong-term volume growth, the reinvestment of
capital into land opportunities offering high returns will
continue to be balanced with regular dividends. Our strong
balance sheet and record land bank also provides us with
the strategic flexibility and agility to respond to any material
changes in market conditions as a result of the current
backdrop of economic uncertainty.
As previously announced, we plan to progressively reduce
dividend cover to around 2.5 times
2,3
underlying earnings by
31 July 2024, a level of cover the Board sees as both prudent
and sustainable. The reducing cover will also help offset the
impact of the Residential Property Developer Tax (‘RPDT’),
charged at 4% of relevant taxable profits, from April 2022,
and rising corporation tax rates, likely to be effective from
April 2023.
Better with Bellway
In March 2022, Bellway launched a new sustainability strategy
Better with Bellway, and we have a range of initiatives
underway to embed the framework across the business.
The strategy covers eight priority areas, each with their own
specific targets and KPIs linked to the underlying operations
of the Group. Better with Bellway includes ambitious targets
in respect of our three flagship priority areas of Carbon
Reductions, Customers and Communities, and becoming an
Employer of Choice. Some recent highlights and progress in
these areas are set out below:
Carbon Reductions – Bellway has worked with The Carbon
Trust to develop a detailed plan to significantly reduce our
greenhouse gas emissions by 2030. We have established
stretching, quantity-based targets which are in line with
the Paris Agreement and go beyond the demanding
requirements of the Future Homes Standard. I am delighted
that these targets have recently been validated by the SBTi as
we aim to play an important role in carbon reduction within
our industry.
Customers and Communities – We are proud to have
retained our position as a five-star
6
homebuilder for the sixth
consecutive year, with a score of 93.6% in the HBF’s most
recently published eight-week survey, which asks customers
whether they would recommend Bellway to a friend.
Alongside maintaining our five-star
6
status for the eight-week
survey, we have also made strides to improve our score in
the nine-month survey to 82.1% (2021 – 79.9%) and we are
targeting further incremental improvements. In addition,
Bellway was one of the first major developers to sign up to the
New Homes Ombudsman Service earlier this month, which
reaffirms our commitment to consistent and outstanding
levels of customer service.
Employer of Choice – We are delighted with the results from
our recent employee engagement survey in which 95%
of colleagues said they would recommend Bellway as ‘a
great place to work’. Maintaining a high level of employee
satisfaction is important to the future success of the business
and we will continue to seek feedback from our colleagues
in order to attract talent and improve staff retention. We also
have a range of initiatives in place to promote inclusivity,
improve gender and ethnic diversity and to increase the
proportion of colleagues in ‘earn and learn’ roles.
In addition to the flagship priority areas, the Better with
Bellway strategy includes targets in respect of biodiversity,
resource efficiency, charitable engagement, sustainability
throughout the supply chain and building quality homes
safely. More details are set out later in this report and are
also available on our website at www.bellwayplc.co.uk/
sustainability.
Our ongoing focus on the serious issue of building safety is
reflected by the level of provision set aside for legacy safety
issues and the establishment of our new Building Safety
division. The new division comprises an experienced team,
with a clear directive to undertake the proficient remediation
of our legacy schemes. Bellway signed up to the Building
Safety Pledge in April 2022 and the Developers’ Pact with the
Welsh Government earlier this month, and we continue to
engage with Government as the industry works towards a
solution to address the safety issues on older buildings.
Board changes
As previously announced, I was appointed as Non-Executive
Chairman on 1 April 2022. On behalf of the Board, I would
like to take this opportunity to thank my predecessor,
PaulHampden Smith, who dedicated almost nine years’
service as a Non-Executive Director of Bellway. I would also
like to take this opportunity to thank Denise Jagger for her
valued contribution to the Board over the past nine years
and more recently in her role as Senior Independent Director.
Denise will be stepping down from the Board ahead of this
year’s AGM.
I am delighted that Sarah Whitney has recently joined
Bellway as an independent Non-Executive Director.
Sarah joined the Board on 1 September 2022 and has also
been appointed as a member of the Audit, Nomination and
Remuneration Committees.
Sarah has significant senior executive experience in the
property sector and her current roles include being Chair
of the Supervisory Board of BBGI Global Infrastructure S.A.
and a Non-Executive Director and member of the Audit and
Management Engagement Committees of Tritax EuroBox plc.
Sarah’s real estate specialism combined with her experience
as a Non-Executive Director will further strengthen the Board
and we look forward to working with her in the years ahead.
Future long-term success
Bellway’s experienced team has a proven ability to adapt to
changes in market conditions. I am confident that the strategic
flexibility afforded by our land bank and strong balance sheet
provides the Group with the resilience and a platform to
capitalise on further growth opportunities in the long-term.
Furthermore, the successful execution of our three strategic
priorities of volume growth, value creation for shareholders,
and our Better with Bellway approach to sustainability,
willcontinue to add value and create a positive experience
for our stakeholders in the future.
John Tutte
Chairman
17 October 2022
25Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Chief Executive’s Market and Operational Review
Market
Bellway’s high quality and energy efficient new homes
have attracted strong customer demand across all regions
where we operate, supported by our well-designed product
range and ongoing investment in land and selling outlets
in desirable locations. The overall reservation rate rose by
6.9% to 218 per week (2021 – 204, 2020 – 178), with particular
strength in the autumn and spring, following a traditional
seasonal pattern.
Average weekly private reservations were slightly ahead of
the prior year at 170 per week (2021 – 169, 2020 – 141) and
benefitted from a second consecutive year of strong pent-
up demand after the onset of COVID-19. The increase was
achieved notwithstanding the Group operating from a lower
number of outlets compared to the prior year and a reduction
in the use of the Help-to-Buy scheme. Customers used Help-
to-Buy in 16% of total reservations (2021 – 30%, 2020 – 40%),
with utilisation most pronounced on apartment schemes
in, and around, London, where the Group has intentionally
reduced its exposure in recent years.
Throughout the year the pricing environment was positive,
with mid-to-high single digit house price inflation benefitting
reservations across most of our divisions. There was a
continuation of strong demand from second-time buyers,
which accounted for around 60% of private reservations.
Bellway’s focus on traditional two-storey family housing
attracts a wide range of customers and this provides
some resilience for the year ahead as Help-to-Buy expires.
Overall,confidence amongst our customers is strong and
reflected in a consistently low cancellation rate of 13%
(2021 – 13%, 2020–17%).
Customer demand is supported by low unemployment, and
we also welcome the recent positive changes to stamp duty
thresholds, which will aid customers saving to purchase a
new home. Over recent weeks, some lenders have sought
to moderate the number of fixed rate mortgages, in response
to shorter-term uncertainty over fundings costs. We do not
expect a long-term structural decline in the availability of
mortgage finance and a number of major lenders have
already relaunched mortgage products to reflect the recent
increase in borrowing costs. In general, there remains
good availability of finance, particularly for customers with
higher deposits.
For customers with a 5% deposit, the availability of 95%
loan-to-value mortgages remains relatively limited, although
some lending institutions are gradually reintroducing these
products for new build properties, including those provided
through the Deposit Unlock scheme. Customer uptake is
currently low, however, the availability of this product provides
some encouragement regarding the availability of alternative
financing arrangements as the Help-to-Buy scheme draws to
a close for new reservations later this month.
Higher interest rates and fuel costs have contributed to
the rise in the cost-of-living, which, to some extent, is
being partially offset by wage rises. We also welcome the
Government’s Energy Price Guarantee, which came into
effect earlier this month, and offers financial support and
more certainty for consumers about their energy costs over
the coming months. This will help ease overall inflation in the
economy and we are hopeful this will have a positive impact
on consumer confidence.
Our homes have high energy efficiency ratings and 97%
of the homes we construct have an Energy Performance
Certificate (‘EPC’) rating of B, compared to an average rating
of D for second-hand housing stock. In this regard, a recent
study by the HBF (‘Watt a Save’, Autumn 2022), shows that a
typical new build home currently offers energy cost savings
of around £2,000 a year when compared to an existing home.
This adds to the overall competitive advantage of our new
build homes over second-hand homes.
Land investment provides near-term flexibility
anda foundation for long-term growth
Bellway’s experienced land teams have continued with a
programme of disciplined investment. This supports our
growth ambitions by providing scope for outlet openings
to help mitigate market headwinds, including rising living
costs and delays in the planning system. All contracted
sites are assessed by our divisional teams and again by the
Group’s Head Office land team, which challenges acquisition
assumptions and reviews layouts and engineering designs.
This Group-wide oversight ensures we focus our investment
resource in the areas of strongest demand and acquire land
that meets our minimum hurdle rates in relation to both
margin and return on capital.
LONG-TERM FUNDAMENTALS
REMAIN STRONG
The long-term fundamentals of our industry remain
strong and there is a shortage of high quality, energy
efficient and affordable homes across the country. If market
conditions remain robust, Bellway has ambitions and
significant capacity to deliver further sustainable volume
growth, over several years, to in excess of 16,000 units.
Jason Honeyman
Group Chief Executive
Strategic Report
26 Bellway p.l.c. Annual Report and Accounts 2022
Building on the proactive and early entry into the land
market in summer 2020, the Group has contracted to
acquire 19,089 plots
4
during 2022 (2021 – 19,819 plots, 2020
– 12,124 plots) across 107 sites
4
(2021 – 109 sites, 2020 – 69
sites). The value of the contracted plots was £1,300.3 million
4
(2021 – £1,066.0 million, 2020 – £777.7 million). We include the
expected costs of building to the requirements of the Future
Homes Standard in our land appraisals and the average
gross margin, based upon revenue and cost at the time of
acquisition, continues to be attractive at around 23%.
The market for larger sites, typically over 150 units, attracts
lower levels of competition and can offer higher expected
returns than smaller sites. In that regard, the average size
of the sites contracted in the year was 178 plots
4
(2021 – 182,
2020 – 176). This not only recognises that slightly larger sites
offer better returns, but it also reflects our skillset to acquire
land and obtain planning permission on larger, often more
complicated acquisitions. In addition, given the strength and
growing size of our balance sheet, the Group has access to
capital to fund larger acquisitions in areas where demand is
robust and has an ability to avoid an undue concentration of
capital and risk in one locality. The use of dual branding on
larger sites also offers customers a wider choice of product,
which in turn can drive higher sales rates.
Over the last two financial years, Bellway has contracted to
acquire 38,908 plots
4
, representing around 180% of homes
completed in that period and all at expected attractive rates
of return. Over half of these plots were contracted in the year
ended 31 July 2021, when competition in the land market was
diminished due to the impact of the pandemic.
Notwithstanding a more competitive backdrop in financial
year 2022, we retained our well-established and disciplined
approach to land buying. We have maintained our focus
on acquiring land in desirable locations where there is an
undersupply of new housing, and where the product is
affordable in the context of localised market conditions.
The table below analyses the Group’s land holdings:
2022 2021 2020
DPP: plots with implementable
detailed planning permission
32,344 30,933 28,289
Pipeline: plots pending an
implementable DPP
28,800 24,300 16,300
Bellway owned and
controlledplots
61,144 55,233 44,589
Bellway share of land owned and
controlled by joint ventures
962 938 472
Total owned and controlled plots
5
62,106 56,171 45,061
Strategic land holdings 35,600 30,400 27,300
Total land bank
5
97,706 86,571 72,361
Given the opportunities presented in the land market,
Bellway’s owned and controlled land bank has grown
to 61,144 plots (2021 – 55,233 plots, 2020 – 44,589 plots),
representing a land bank length of 5.5 years (2021 – 5.4 years,
2020 – 5.9 years) when based on the last 12 months’ legal
completions. The record land investment since the summer
of 2020 has led to our land bank length growing significantly
from 3.9 years in financial year 2019. This provides scope
for outlet growth and flexibility to respond to changes in
the market.
Within our land bank we have 32,344 plots (2021 – 30,933
plots, 2020 – 28,289 plots) with an implementable detailed
planning permission (‘DPP’). In addition, our pipeline land
bank has increased to 28,800 plots (2021 – 24,300 plots, 2020
– 16,300 plots), representing growth of 76.7% over the past two
years. The increase in pipeline plots reflects both the strength
of our land investment and bottlenecks in the planning
system, as sites await the receipt of implementable DPP.
As these plots achieve planning permission, it presents further
scope to grow outlets in the years ahead.
In addition to delays in the planning system, the sector also
needs to accommodate the increasing regulations around
nutrient and water neutrality, and biodiversity. Our new Head
of Biodiversity will lead on this area and help the Group
navigate the associated planning complexities.
Our recent land investment and strengthening of the land
teams positions the Group well to mitigate planning delays
and begin to reverse the reduction in outlet numbers that has
affected the wider industry. The Group was operating from
235 outlets at 31 July 2022 (2021 – 254, 2020 – 276).
To help deliver further growth in volume output, the Group
has good visibility on the expected timing of planning
decisions and construction starts and is well placed to
increase the number of selling outlets by 31 July 2023.
We currently expect to open around 120 new outlets in
financial year 2023. Growth in outlets is likely to be weighted
towards the second half with the forecast number of outlets at
July 2023 also dependent upon sales rates and therefore the
number of outlets closing.
Overall, our strengthened land bank, supported by our strong
balance sheet and financial disciplines, allows the Group to
reinforce its selective approach and disciplined land buying in
the year ahead. Given the depth of our land bank and current
uncertainty in the wider economy, we expect to contract
fewer plots in the year to 31 July 2023 than the average over
the last two years, while still retaining a focus on longer-term
growth ambitions.
27Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Chief Executive’s Market and Operational Review continued
Strategic land investment to further support our
long-term growth ambitions
During the last two years we have increased our investment
in strategic land, providing additional support to our
longer-term growth ambitions. We have expanded our
experienced strategic land team which has Group oversight,
and implemented a new structure with dedicated resource
that sits alongside our four Regional Chairmen. We have
also appointed several graduates to the team, to ensure the
continued success of the function.
The sourcing of longer-term land opportunities has been
further devolved to all divisions, each of which has a
nominated strategic land champion. Their joint remit is to
identify and capture land opportunities, typically through
option agreements, which are usually expected to obtain
planning permission over a period of five years or more.
Our long-term land-sourcing was enhanced in June 2022
when the Group completed the acquisition of a regional
strategic land business for total consideration of £8.4 million.
As part of the transaction, Bellway acquired a range of land
options and promotion agreements, providing access to over
2,500 plots in the years ahead and broadening our presence
in the South East and Midlands.
As a result of this acquisition and our new approach to
strategic land sourcing, the Group has entered into an
additional 30 option agreements in 2022 (2021 – 24, 2020 – 15),
with these sites located in areas across the country where
there is a strong structural demand for new housing supply.
As at 31 July 2022 the strategic land bank had grown by
17.1% and comprised 35,600 plots (2021 – 30,400 plots,
2020 – 27,300 plots).
Overall, the Group’s increased focus on strategic land
provides an opportunity to strengthen our land pipeline and
more broadly, it can generate margin enhancement due
to land values typically being agreed at a discount to open
market cost, once planning permission has been obtained.
Range of brands for our broad customer base
Bellway continues to operate under three distinctive
brands – Bellway, Ashberry and Bellway London. Our core
Bellway brand remains the foundation of the business
and contributed 83.7% of legal completions (2021 – 86.1%,
2020–88.1%).
Ashberry is primarily used on larger sites, alongside our
Bellway brand, where there is capacity and market demand
for two selling outlets. The use of two brands provides
customers with greater choice through a wider range of
elevations and internal layouts. This can drive higher sales
rates and return on capital employed, while also acting as a
mitigant to slower market conditions. Ashberry represented a
growing proportion of our active selling sites during 2022 and
was used in 8.6% of completions (2021 – 6.8%, 2020 – 5.7%).
Bellway London is marketed as a standalone brand for our
operations across the Capital where our product range,
specification and customer approach to buying a home
differs to other parts of the country. The brand contributed
7.7% of completions (2021 – 7.1%, 2020 – 6.2%), the large
majority of which were apartments.
Our strategy in London remains focused on the more
affordable outer transport zones and is supported by
our relatively new London Partnerships division, which
contributed 29% of Bellway London completions during
the year. The total average selling price of our completions
in London was £389,684 (2021 – £337,338, 2020 –
£449,466), an affordable level in the context of the Capital’s
residential market.
Design, productivity, and labour and
materialcosts
Upward pressure on build costs persisted across the sector
throughout the year, with rising energy prices, global supply
chain constraints and increasing wage costs all contributing to
the rise. Bellway’s long-term relationships, strong commercial
disciplines, value engineering initiatives and forward buying
have helped to mitigate these cost pressures. Cost inflation
during the year has been approaching 10% and overall has
been offset by house price inflation.
The use of our Artisan Collection house-types has delivered
a range of benefits including improved site layouts and cost
savings through design evolution and national procurement
deals. As our subcontractors become increasingly familiar with
the range, there are also opportunities to drive improvements
in build speed.
Since the launch of the Artisan Collection in 2018, our new
house-types have been plotted across 43,000 plots (2021 –
29,000 plots, 2020 – 21,000 plots) on 295 developments (2021
– 212 developments, 2020 – 164 developments). This increase
is reflected in the proportion of Artisan homes within Group
completions, which rose to 26% in financial year 2022
(2021 – 7%, 2020 – 1%) and we expect further growth in the
current year.
To help offset some of the cost pressures in the wider
market, we have continued to implement a range of value
engineering initiatives, including ongoing reviews of plot
drainage designs, retaining wall systems and piling systems.
Each of our divisions also has a nominated internal cost
control champion whose remit is to promote and reinforce
our strong commercial culture, while maintaining the high
quality of our homes.
Strategic Report
28 Bellway p.l.c. Annual Report and Accounts 2022
Ongoing investment in technology across the business is
delivering improvements in our commercial and procurement
processes. Bellway uses COINS, a Group-wide financial and
commercial system, and we have recently rolled out its on-site
valuation tool, mTick, across the Group. This enables on-site
surveying tasks to be completed electronically, drivinggreater
efficiency and improved site-cost comparisons.
The availability of materials gradually improved through the
second half of the financial year and, although we continue
to experience ad hoc shortages at a regional level, these are
being well-managed by our experienced procurement teams.
There continue to be extended lead times and shortages
of certain products, such as roof tiles and clay bricks.
Where possible, Bellway has sourced alternative products,
whilst maintaining the high standard of our homes.
The global shortage of semiconductors has also impacted
the availability of kitchen appliances and gas boilers, although
we have seen a gradual improvement in supply over recent
months. While challenges are expected to persist for the
industry in the year ahead, our long-standing relationships
with subcontractors and suppliers, sourcing of alternative
products and good on-site disciplines will continue to help
ease production constraints.
In the near-term, we do not expect cost inflation to abate,
given materials shortages, rising wage costs and elevated
energy prices. Longer-term, as we move towards building to
the requirements of the Future Homes Standard, our Artisan
standard house types and centralised approach to design,
procurement and site layout reviews will continue to help the
Group maintain efficiency and offset future cost pressures.
Recent trading
The pandemic caused distortions to typical seasonal sales
patterns over the last two years and the generally strong
sales market led to a further increase in the order book
at 31 July 2022. This comprised 7,223 homes (2021 – 7,082
homes, 2020– 6,588 homes) and had risen in value by
4.5% to a financial year-end record of £2,114.3 million
2
(2021–£2,022.3 million, 2020 – £1,760.2 million).
The Group has a strong order book and work-in-progress
position, with more units currently in production than the
prior year. Given these are typically at an earlier stage of
construction and further to our record volume output
last year, the number of finished units available for sale is
relatively low.
Overall, there has been a moderation in our recent sales rate
and while pricing has remained firm, in the first nine weeks of
the new financial year overall weekly reservations declined
by 12.4% to 191 per week (1 August to 3 October 2021 – 218 per
week, 1 August to 4 October 2020 – 239 per week).
Reflecting our construction programmes, the forward order
book has increased slightly since the financial year end
and comprised 7,257 homes at 2 October (3 October 2021–
6,731 homes, 4 October 2020 – 6,624 homes), of which
71% were exchanged (3 October 2021 – 62%, 4 October
2020– 62%). The order book had a value of £2,093.8 million
2
at 2 October (3 October 2021 – £1,966.3 million, 4 October
2020–£1,869.6 million).
Outlook
While the sector faces a number of near-term headwinds,
including rising interest rates and the expiry of Help-to-Buy,
unemployment levels remain low and the recent positive
changes to stamp duty thresholds offer additional support
for housing demand. The combined strength of our balance
sheet, land bank and order book support our ability to grow
outlets in the year ahead, but also provide strategic flexibility
to respond to changes in the housing market.
In the current financial year and supported by our recent
investment in land and work-in-progress, the Group retains
the operational capacity to grow output up to 12,200 homes,
an ambition set out at our preliminary announcement in
October 2021.
Output is, however, expected to be more moderate, given
the uncertain economic backdrop. We have a strong order
book, and our build programmes are weighted to a higher
proportion of social completions and given this, the Board
currently expects volume output to be similar to the prior
year. The final outturn will be dependent on the autumn
and spring selling seasons and the Group will prioritise the
high standard of our product, margin, quality of profit and
value creation.
The long-term fundamentals of our industry remain strong
and there is a shortage of high quality, energy efficient and
affordable homes across the country. If market conditions
remain robust, Bellway has ambitions and significant capacity
to deliver further sustainable volume growth, over several
years, to in excess of 16,000 units. This can be delivered
from a platform of our strong land investment, substantial
cash position, potential expansion into new regions and the
ongoing maturity of divisions.
Further volume growth and delivering on all aspects of our
‘Better with Bellway’ sustainability strategy, will ensure that
the Group continues to generate value for shareholders and
make a positive contribution for all our stakeholders.
Jason Honeyman
Group Chief Executive
17 October 2022
29Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
FOCUSING ON LONG-TERM
VALUE CREATION
In the years ahead, retaining a strong balance sheet will
be key to supporting our strategic priorities of delivering
volume growth and value creation for shareholders.
Keith Adey
Group Finance Director
Group Finance Director’s Review
Group revenue (£m)
£3,536.8m
+
13.3%
2022
2021
2020
3,122.5
3,536.8
2,225.4
Total dividend per
ordinary share (p)
140.0p
+
19.1%
2022
2021
2020
117.5
140.0
50.0
Operating profit (£m)
£309.0m
(
35.6%)
2022
2021
2020
479.7
309.0
249.1
Underlying operating profit (£m)
(2)(3)
£653.2m
+
22.9%
2022
2021
2020
531.5
653.2
321.7
R
Operating margin (%)
(2)
8.7%
(
670bps)
2022
2021
2020
15.4
8.7
11.2
Underlying operating margin (%)
(2)(3)
18.5%
+
150bps
2022
2021
2020
17.0
18.5
14.5
Profit before taxation (£m)
£304.2m
(36.5
%)
2022
2021
2020
479.0
304.2
236.7
Underlying profit before
taxation (£m)
(2)(3)
£650.4m
+
22.5%
2022
2021
2020
530.8
650.4
309.3
Earnings per ordinary share (p)
196.9p
(37.9%)
2022
2021
2020
316.9
196.9
156.6
2022
2021
2020
350.9
420.8
204.3
Underlying earnings per
ordinary share (p)
(2)(3)
420.8p
+
19.9%
Strategic Report
30 Bellway p.l.c. Annual Report and Accounts 2022
Trading performance
The Group has delivered significant growth in housing
revenue, which rose by 13.3% to £3,520.6 million (2021 –
£3,107.1 million, 2020 – £2,204.4 million). This is 10.7% above the
previous peak of housing revenue generated in financial year
2019 of £3,180.1 million.
Other revenue was £16.2 million (2021 – £15.4 million,
2020 – £21.0 million), and comprises ancillary items such
as land and commercial sales. Total revenue increased
by 13.3% to £3,536.8 million (2021 – £3,122.5 million,
2020–£2,225.4 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
2022 2021 2022 2021 2022 2021
North 4,637 3,983 817 714 5,454 4,697
South 4,503 3,913 1,241 1,528 5,744 5,441
Group 9,140 7,896 2,058 2,242 11,198 10,138
Average selling price (£000)
Private Social Total
2022 2021 2022 2021 2022 2021
North 312.1 304.4 118.7 116.7 283.1 275.9
South 387.3 389.7 187.5 187.5 344.1 332.9
Group 349.1 346.7 160.2 165.0 314.4 306.5
The growth in housing revenue has been primarily driven
by the increase in volume output, with total completions
rising by 10.5% to 11,198 homes (2021 – 10,138, 2020 – 7,522).
Private output rose by 15.8% to 9,140 homes (2021 – 7,896,
2020 – 5,851), more than offsetting the lower number of social
completions, which reduced to 18.4% of the total (2021 – 22.1%,
2020 – 22.2%). The lower level of social units was due to the
timing of build programmes and the relative strength of the
brought forward private order book. In the current financial
year, the Group’s recent investment in land and phasing
of construction programmes provides strong visibility on
new outlets and we expect a greater weighting of social
housing completions.
The majority of our divisions contributed to the overall growth
in the Group’s volume output. Our five strongest operating
divisions delivered in excess of 675 completions each,
demonstrating the capacity of a well-run, mature division
in a healthy sales market. A further eleven of our divisions
each completed 500 units or less in the year and therefore
have capacity for future volume growth in the long-term.
Our significant investment in land and people will also help
tosupport increases in output in the years ahead.
The overall average selling price rose by 2.6% to £314,399
(2021 – £306,479, 2020 – £293,054) and was influenced by a
combination of product mix changes and some underlying
house price inflation. The overall average selling price in the
year ending 31 July 2023 is expected to be around £300,000.
This slight moderation from the level in the prior year reflects
expected dilution from the increasing proportion of lower
value social completions.
Underlying operating performance
The Group’s record revenue, together with improved
site operating efficiency and completions from more
recently acquired land, resulted in underlying gross profit
risingby20.7% to £787.0 million
2,3
(2021 – £651.9 million,
2020–£422.2 million).
The underlying gross margin increased by 140 basis points
to 22.3%
2,3
(2021 – 20.9%, 2020 – 19.0%). This is stated after
COVID-19 related costs, which were recognised in site-
based valuations in financial year 2020. Fewer sites were
affected in 2022 and the related charge was £17.5 million
(2021–£21.7 million). As the affected sites continue to trade
out, we expect the associated costs to reduce further in
financial year 2023.
Other operating income and expenses, which net to
income of £0.2 million (2021 – £0.3 million net expense,
2020 – £3.1 million net expense), relate to the running of
our part-exchange programme. Due to the strength of the
underlying second-hand market in the period, part-exchange
activity was low and used for only 1.1% of completions
(2021–1.3%,2020–8.2%). The balance sheet investment
at 31 July 2022 was £5.4 million, providing the Group with
capacity to increase the use of part-exchange in the year
ahead, if market conditions require it.
Underlying administrative expenses increased by 11.6% to
£134.0 million
2,3
(2021 – £120.1 million, 2020 – £97.4 million),
primarily reflecting the ongoing investment in our land and
commercial teams to achieve growth. As a proportion of
revenue, underlying administrative expenses were 3.8%
2,3
(2021 – 3.8%, 2020 – 4.4%).
Investment will continue in financial year 2023 and while we
will adopt a restrained approach, we expect administrative
expenses to be in excess of £150 million. The increase on the
prior year reflects the ongoing investment in people to achieve
long-term growth and underlying increases in pay and
employee benefits, including higher pension contributions.
This is to support our colleagues as the cost-of-living increases
and to attract and retain quality talent within the business.
The expected increase also includes a full year of overhead
costs for our recently established Building Safety division.
The underlying operating margin for the full financial
year increased by 150 basis points to 18.5%
2,3
(2021 – 17.0%,
2020–14.5%). The combination of strong pricing in the order
book, improved site operating efficiency and completions
from more recently acquired land would normally be
expected to lead to further improvement in our underlying
operating margin in the year ahead. Nevertheless, the
economic backdrop and sustained and elevated levels of
build cost inflation provide increased uncertainty which
could offset these potential margin gains. Therefore, based
on current prices and delivering volume output similar to
last year, we currently anticipate delivering an underlying
operating margin of over 18%
2,3
in financial year 2023.
With thesupport of normal conditions in the housing market,
the Board believes an underlying operating margin within the
range of 18%
2,3
to 19%
2,3
is sustainable over the medium and
longer-term.
Adjusting item: Net legacy building safetyexpense
Bellway’s continued commitment to act responsibly with
regards to building safety is reflected by the level of our
31Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Group Finance Director’s Review continued
prudent provision and the actions the Group has taken since
the tragic events at Grenfell in 2017. Government guidance and
regulations in relation to legacy building safety have evolved
since 2017 and apartment blocks are now to be assessed in
accordance with the Publicly Available Specification (‘PAS’)
9980:2022, produced by the British Standards Institute.
In the first half of financial year 2022, the Group set aside a net
£19.6 million for legacy safety improvements, bringing the total
provided in the period between 2017 and up to 31 January
2022 to £186.8 million. This was in relation to apartment
buildings over 11 metres in height, which were generally built
within our 10-to-12 year warranty period.
On 7 April 2022, as part of the Building Safety Pledge (the
‘Pledge’), we announced that this commitment would be
extended to a 30-year period to include buildings constructed
by the Group since 5 April 1992 and to reimburse the Building
Safety Fund and the ACM Fund in accordance with the
principles set out in the Pledge.
Earlier this month, the Group also signed up to the Developers’
Pact with the Welsh Government. Similar in regard to the
Pledge, this is a commitment to remediate buildings over
11 metres in height with life critical fire safety issues, which were
constructed in Wales since 5 April 1992. Reflecting our ongoing
and responsible UK-wide approach to legacy building safety,
the expected cost of the remediation works in Wales were
included in our provision estimate announced on 7 April 2022.
The Group entered into these commitments acknowledging
that resident safety is of paramount importance and an
additional net amount of £326.6 million was set aside in
the second half of financial year 2022, which is in line with
previous guidance.
In total, for the year ended 31 July 2022 Bellway set aside
a net £346.2 million, in relation to legacy building safety
improvements. The net charge comprises a gross expense
of £349.0 million, less recoveries of £2.8 million. The gross
expense includes an adjusting charge of £347.0 million
through cost of sales in relation to remediation costs, and an
adjusting charge of £2.0 million through finance expense, in
relation to the unwinding of the discount of the provision to
present value.
The total amount Bellway has set aside for UK legacy building
safety since 2017 is £513.7 million. Costs have been provided
regardless of whether Bellway still retains ownership of the
freehold interest in the building or whether warranty providers
have a responsibility to carry out remedial works.
Although the application of the PAS is still under consideration
by both the Group and the wider industry, the Board
nevertheless believes that the level of provision is robust. It has
been calculated based on our extensive experience to date,
using analysis of previously tendered works and prudent,
professional estimates based on knowledge of known issues.
In addition, on developments where full investigations have not
yet been undertaken or cost reports obtained, costs to date on
similar developments have been used to assess the likely cost.
We have also made assumptions with regards to the likely cost
of resolving potential issues that we have not yet been made
aware of, on schemes covered by the extended 30-year period.
The provision calculation uses the expected timings of cash
outflows which are adjusted for management’s estimate
of inflation, informed by appropriate indices. The provision
is discounted back to a present value using UK gilt rates
with maturities which reflect the expected timing of cash
outflows. The unwinding of this discount is charged through
the income statement as a non-cash adjusting finance
expense item.
The precise timings of cash outflows for building safety
improvements are uncertain, although they are expected
to be over several years. This reflects the complex issues
around remediation including identifying the works required,
design and planning obligations, interpretation of PAS, liaison
and negotiations with building owners, and appointment
of contractors.
Bellway has a strong, well-capitalised balance sheet with net
cash of £245.3 million
2
, a net asset value of £3,367.8 million
and committed debt facilities of £530 million as at 31 July
2022. In this regard, the Group is well placed to meet its
commitments under the Pledge and importantly, the
expected level and timings of the costs will not be detrimental
to our long-term growth ambitions.
Operating profit
After taking these adjusting items into consideration, total
operating profit decreased by 35.6% to £309.0 million
(2021–£479.7 million, 2020 – £249.1 million).
Net finance expense
The net finance expense was £14.1 million (2021 – £11.1 million,
2020 – £13.4 million) and comprises an underlying interest
expense of £12.1 million
3
and an adjusting expense of
£2.0 million in relation to the unwinding of the discount
onthe building safety provision, as noted above.
The underlying net finance expense principally includes
notional interest on land acquired on deferred terms, interest
on the Group’s fully drawn US Private Placement (‘USPP’) loan
notes and bank interest. Notional interest on land acquired
on deferred terms was £7.3 million (2021 – £6.5 million, 2020
– £6.9 million). The interest charge on the USPP debt was
£3.4 million (2021 – £1.6 million, 2020 – nil), with the increase
reflecting a full year of cost following the draw down in February
2021. Net bank interest, which includes interest receivable on
cash balances, commitment fees and refinancing costs, was
£2.0 million (2021 – £3.1 million, 2020 – £6.0 million).
The recent rise in borrowing costs will impact the Group’s
variable interest charges in the year ahead, primarily on the
notional interest on deferred land purchases. Based on current
interest rates, the net underlying interest expense in financial
year 2023 is anticipated to increase by up to £5 million
3
.
The adjusting finance expense in relation to the discount
unwind of the legacy building safety provision is expected
to increase, reflecting a full year of charge, after signing up to
the Pledge in April 2022. The charge is subject to a range of
assumptions, and based on the 31 July 2022 forward looking
discount rate, we currently anticipate an adjusting expense
of over £3 million in the first half of financial year 2023.
The expense in the second-half of the year will, in part, be
dependent upon the movement in gilt rates.
Share of results of joint ventures
Our share of profit from joint ventures decreased slightly to
£9.3 million (2021 – £10.4 million, 2020 – £1.0 million). In the year
to 31 July 2023, we anticipate a small loss of around £1 million
for our share of results from joint ventures, reflecting a lower
Strategic Report
32 Bellway p.l.c. Annual Report and Accounts 2022
expected number of completions and the upfront financing
costs on a longer-term scheme.
Profit before taxation
Underlying profit before taxation rose by 22.5%, to
£650.4 million
2,3
(2021 – £530.8 million, 2020 – £309.3 million).
Reported profit before taxation reduced by 36.5% to
£304.2 million (2021 – £479.0 million, 2020 – £236.7 million),
with the growth in underlying profitability more than offset
bythe increase in the building safety provision in the year.
Taxation
The corporation tax charge was £61.6 million (2021 –
£88.3 million, 2020 – £43.8 million), reflecting an effective tax
rate of 20.2% (2021 – 18.4%, 2020 – 18.5%). The effective tax rate
increased in the year following the introduction of the RPDT in
April 2022, charged at a rate of 4% of relevant taxable profits,
to support the Government’s Building Safety Fund.
The effective tax rate will increase further, to around 25% in
financial year 2023, because of the planned 6% increase in the
standard rate of UK corporation tax in April 2023. Thereafter, in
financial year 2024 and beyond, both the RPDT and the higher
rate of UK corporation tax will be in effect for the duration of the
full financial year and, as a result, the Group’s effective tax rate is
expected to approach 29%.
Profit for the year
The underlying profit for the year increased by 19.8%, to
£518.5 million
2,3
(2021 – £432.7 million, 2020 – £251.7 million)
and underlying earnings per share rose by 19.9% to 420.8p
2,3
(2021 – 350.9p, 2020 – 204.3p).
After considering taxation and the net legacy building safety
expense, profit for the year fell by 37.9% to £242.6 million (2021
– £390.7 million, 2020 – £192.9 million). Basic earnings per share
(‘EPS’) reduced by 37.9% to 196.9p (2021 – 316.9p, 2020 – 156.6p).
Net cash and financial position
Bellway continues to operate with a strong balance sheet
and ended the year with net cash of £245.3 million
2
(2021 –
£330.3 million, 2020 – £1.4 million), representing an ungeared
2
position (2021 – ungeared, 2020 – ungeared). Average net
cash was £223.9 million
2
during the year (2021 – net cash of
£266.3 million, 2020 – net debt of £55.4 million), demonstrating
that the year-end position is not inflated through one-off items
and reflects the resilience of the financial position throughout
the year.
Committed land obligations are modest, at £393.4 million
(2021 – £455.8 million, 2020 – £343.6 million) and adjusted
gearing, inclusive of land creditors, remains low at 4.4%
2
(2021– 3.8%, 2020 – 11.4%).
In addition to the net cash position, Bellway has access to
significant levels of medium and long-term debt finance,
totalling £530 million. This comprises committed bank facilities
of £400 million and £130 million of fully drawn sterling USPP
loan notes, which have maturity dates that extend in tranches
to February 2031. Bellway’s balance sheet resilience will
continue to be maintained through the current economic
uncertainties and we expect to maintain a cash surplus
intheyear ahead.
In the near-term, Bellway’s record land bank provides
strategic flexibility against the current economic backdrop.
Over the longer-term, continued disciplined investment
in land is essential to drive volume output, to ensure the
ongoing success of the Group and to generate NAV growth.
Overall, our land investment will continue to be balanced with
the payment of regular ordinary dividends to generate value
creation for shareholders.
A well-capitalised balance sheet provides strength
and flexibility
The Group’s balance sheet is well-capitalised and provides
both financial resilience and capacity for further investment
to achieve long-term growth. The balance sheet principally
comprises amounts invested in land and work-in-progress,
with total inventories rising by 9.7% to £4,423.6 million
(2021–£4,032.2 million, 2020 – £3,863.0 million). The carrying
value of land rose to £2,786.4 million (2021 – £2,483.9 million,
2020 – £2,216.2 million). Work-in-progress increased by 6.5%
to£1,524.8 million (2021 – £1,431.4 million, 2020 – £1,496.1 million)
and was 43.3%
2
(2021 – 46.1%, 2020 – 67.9%) as a proportion of
housing revenue.
In relation to its legacy, defined benefit pension scheme, the
Group had a retirement benefit asset of £7.1 million (2021 –
£10.2 million, 2020 – £1.3 million) at 31 July 2022, reflecting an
ongoing commitment to fund this future, long-term obligation.
Value creation
Underlying post-tax return on equity increased by 170 basis
points to 15.4%
2,3
(2021 – 13.7%, 2020 – 8.4%). Reported post-tax
return on equity was 7.2%
2
(2021 – 12.4%, 2020 – 6.5%), with the
reduction largely reflecting the net effect of the increase in the
legacy building safety improvements provision.
Following cash dividend payments made in the year
totalling £157.2 million (127.5p per share), and the net legacy
building safety expense of £346.2 million, which nets to
£275.9 million after taxation (223.9p per share), the net asset
value rose by 2.4% to £3,367.8 million (2021 – £3,287.8 million,
2020–£2,994.0 million). This represents NAV per share of
2,727p
2
(2021 – 2,664p, 2020 – 2,427p).
Capital growth in the period, measured as the increase in
NAV combined with the cash dividend, was 190.5p per share
2
,
which equates to 7.2% of the NAV at the start of financial year
2022. Underlying capital growth, measured before the effect
of the net building safety expense, was 15.6%
2,3
.
A core part of the Group’s strategy is to maintain a sharp focus
on RoCE, which is measured using average unadjusted net
assets as its capital base. During the year, the improvement in
both asset turn and underlying operating margin delivered
an increase in underlying RoCE to 19.4%
2,3
(2021–16.9%,
2020–10.8%) or 17.4%
2,3
(2021 – 15.0%, 2020 – 9.8%),
when including land creditors as part of the capital base.
The Group’s capital employed was, however, suppressed
in the year by the additional post-tax provision in relation
tolegacy building safety. The reducing effect of the provision
on capital employed contributed around 110 basis points
tothe increase in underlying RoCE.
In the years ahead, retaining a strong balance sheet will be
key to supporting our strategic priorities of delivering volume
growth and value creation for shareholders.
Keith Adey
Group Finance Director
17 October 2022
33Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Customers
and
Communities
Employer
of Choice
Building
Quality
Homes, Safely
People Planet
Better with Bellway Overview
A RESPONSIBLE AND
SUSTAINABLE APPROACH
TOOUR BUSINESS
Bellway has been building exceptional quality new homes throughout the UK
for more than 75 years, creating outstanding properties in desirable locations.
Weoperate in a responsible and sustainable way, but also recognise the growing
importance of understanding the impact our business has.
Better with Bellway
vision
Our flagship business priorities
Mapping key sustainability topics
with business priorities
Business priorities
Customers and
Communities
Customer First Diversity and
Inclusion
Upskilling
Workforce
Building Safely
Putting customers
and communities
at the heart of
everything we do.
Creating an
environment that
our colleagues
can thrive in.
Quality and safety
first for everyone.
Strategic Report
34 Bellway p.l.c. Annual Report and Accounts 2022
Carbon
Reductions
Sustainable
Supply Chain
Charitable
Engagement
Resource
Efficiency
Biodiversity
People Planet
Sustainability is at the heart of our business and our Better
with Bellway strategy, which launched in March 2022,
embodies our approach to responsible and sustainable
business practice.
Our sustainable approach is not just an add-on, it is a key part
of our business strategy. It is what we do daily, ‘putting people
and the planet first’.
Our eight strategic business priorities are designed to help
Bellway thrive, now and into the future. They put our long-
term commitment to responsible and sustainable practice
atthe core of our operational strategy.
Putting people first is also about building quality homes, safely,
and extending that commitment to safety and sustainability
into the supply chain. We will work closely with our partners
to achieve this. Fundraising for charities and encouraging our
colleagues to volunteer puts people and community at the
heart of our business.
Putting the planet first means delivering on our commitment
to build low carbon homes, reducing our own carbon
footprint and considering our customer’s carbon footprint,
while reducing and rethinking our use of resources to
avoid waste, minimise energy and water usage whilst also
sourcing materials responsibly. It also means taking a positive
view of biodiversity so that our developments can leave a
lasting legacy.
Carbon
Reductions
Employer
of Choice
Responsible
Sourcing
Carbon
Footprint
Modern
Slavery
Charitable
Giving
Low Carbon
Homes
Resource
Efficiency
Biodiversity
Delivering low
carbon homes.
Driving
sustainability
through long-
term partnerships.
Giving, to build
better lives.
Designing
out waste by
building better.
Protecting and
preservingnature.
35Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Sustainability strategic review
As detailed in last year’s annual report, in April 2021 we began
a review of our corporate responsibility activities to help
shape our new Better with Bellway sustainability strategy.
The objective was to create an integrated strategy that would
go above and beyond the traditional Environmental, Social
and Governance (‘ESG’) and corporate responsibility topics
to align itself with our commercial strategy. A full summary
of the work undertaken to complete the strategy can be
viewed in our Better with Bellway strategy report available on
our website (sustainability.bellwayplc.co.uk). The Better with
Bellway strategy addresses the key sustainability risks and
opportunities, enabling us to set ambitious goals and KPIs
to help drive and embed sustainability within Bellway, and
building stakeholder trust.
Using the results from a materiality assessment and strategic
analysis, we identified the key strategic sustainability themes
for the business. To ensure the strategy is fully integrated into
Bellway’s business operations, we have framed it around our
Better with Bellway vision of putting people and the planet
first. Sustainability issues are grouped under key business
priority areas where we can make the most positive difference
in terms of sustainable and responsible business practices.
Of the eight business priority areas (see pages 34-35), we
identified three as flagship – Customers and Communities;
Employer of Choice; and Carbon Reductions. These are areas
Bellway can make the most significant beneficial impacts in
the short-term.
The new strategy will continue to be directed by the
Better with Bellway Leadership Committee comprising
the Group Finance Director, Group General Counsel
and Company Secretary, Group Production Managing
Director and Group Head of Sustainability. The Better with
Bellway Leadership Committee manage sustainability at a
strategic level, overseeing the development of the strategy,
objectives, targets, report to the Board and engage with key
external stakeholders.
The Group Production Managing Director and Group Head
of Sustainability then lead the Better with Bellway Leadership
Team, made up of senior leaders who hold responsibility
for the eight business priority areas of Better with Bellway.
This Leadership Team co-opt business sponsors from across
Bellway who are responsible for implementing projects at a
functional and departmental level, to deliver on the agreed
sustainability objectives as well as embedding sustainability
into business as usual activities.
Reporting frameworks
We have developed the Better with Bellway targets and
KPIs with a view to meeting the requirements of three ESG
reporting frameworks that were identified as most relevant
toour investors:
• Global Reporting Initiative (‘GRI’);
• Sustainable Accounting Standards Board (‘SASB’); and
• United Nations Sustainable Development Goals (‘SDGs’)
See pages 189 to 199 for further detail. This will provide
investors with greater clarity of Bellway’s sustainability strategy
and credentials and, while we accept that there are some
areas for improvement where we have yet to set a relevant
target or KPI, Better with Bellway is designed to be an evolving
strategy which we will revisit on a regular basis and, where
appropriate, add additional KPIs that can add value to
the business.
We will monitor the relevance of EU Sustainable Finance
Disclosure Regulation (‘SFDR’) to our investors and will align
our reporting as required.
We continue to contribute to the Carbon Disclosure Project’s
(‘CDP’) Climate Change and Forests programmes. Our latest
scores were ‘Awareness – B-’ for Climate Change and
‘Awareness – C’ for Forest, in line with the CDP programme
global average.
Targets and KPIs
Alongside the Better with Bellway priorities, we have
developed a set of short, medium, and long-term
sustainability targets and KPIs that will enable Bellway to turn
our strategy into action. Each set of targets and KPIs have
been developed in consultation with the relevant business
sponsors who have responsibility for each of the eight
business priority areas. They will underpin the Better with
Bellway sustainability strategy and will be reviewed on an
annual basis to ensure they continue to deliver on the overall
aims and objectives.
• The KPIs are designed to provide a high level snapshot
of performance within each area, and in some cases are
aligned to notable ESG rating indices.
• Each business priority area has a headline target that best
reflects the vision for that business priority. Where relevant,
they have at least a 2-year duration to provide a stable
platform to drive improvement in their relevant area and
will allow Bellway to easily communicate the strategic Better
with Bellway vision to internal and external stakeholders.
The headline KPIs are reported as principal KPIs in this
report. See pages 10-11.
Our key achievements in 2021/22
FY22 saw the first year of progress against our new Better
with Bellway targets, a small number of which were multi-
year objectives carried forward from FY21. In total we set or
carried over 47 external targets spanning the eight business
priority areas of which 9 have already been achieved, 33
are in progress and 5 have been missed. Full details of target
performance can be found under the relevant Better with
Bellway business priority sections.
9
targets
achieved
33
targets
in progress
5
targets
missed
Better with Bellway Overview continued
Strategic Report
36 Bellway p.l.c. Annual Report and Accounts 2022
Key highlights from the year
• Achieved the 5-star
6
homebuilder status from the HBF for
the sixth consecutive year running, recording one of the
Group’s best-ever Recommend a Friend score of 93.6%
(2021 – 93.5%).
• Implemented our third Employee Engagement Survey,
achieving an engagement score of 96% (2021 – 89%).
• Achieved validation of our scope 1 & 2 and scope 3 science
based targets by the Science Based Targets initiative (SBTi).
• Achieved a 28.4% absolute reduction in our scope 1 & 2
carbon emissions against our FY19 baseline.
• Improved our waste diversion rate for the eighth year
running to 99.5% (2021 – 99.4%).
• Planted Bellway’s first ‘Tiny Forest’ in Ponteland,
Northumberland as part of a partnership with Earth
Watch, in conjunction with staff volunteers and local
school engagement.
• Continued our partnership with Cancer Research UK,
raising £607,898 this year, bringing our six-year total to
£2.56 million, well on the way to our £3 million target
bytheend of 2023.
• Working towards Establishing a partnership with The Rivers
Trust, to initially progress volunteering opportunities.
• Commenced construction of our Future Home at University
of Salford to test innovations in building materials and
renewable technology in advance of the Future Homes
Standard in 2025.
• Introduced our new ‘green’ welcome pack for new Bellway
homes owners.
Flagship business priorities key highlights
Achieved our
5-star
6
homebuilder
status
for the sixth consecutive year running, recording the
Group’s best-ever Recommend a Friend score of
93.6%
(2021 – 93.5%)
Customers
and Communities
Achieved
validation of our scope 1 & 2 and scope 3 science based
targets bythe Science Based Targets initiative (SBTi)
Carbon Reductions
Implemented our third Employee Engagement
Survey, achieving an engagement score of
96%
(2021 – 89%)
Employer of Choice
37Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Better with Bellway Strategy and Priorities
Customers and Communities
Putting customers and communities at the heart of everything we do
We’re proud of the 5-star
6
homebuilder rating
we received in the NHBC survey, the sixth
consecutive year we have received this accolade,
with a score of 93.6%, one of our highest scores
to-date. Although we’re happy to receive such
a high rating from our customers, we want to
do better and the aim of our Customer First
programme is to build on our previous success
and ensure that we continue to exceed our
existing levels of customer satisfaction.
Customer satisfaction
With this in mind we have set ourselves a target of increasing
our year-on-year score for the 9-month NHBC survey,
achieving at least 90% by July 2026. This target focuses on
the longer-term satisfaction of our customers and achieving
this will be challenging but we have achieved an 82.1% score
this year (2021 – 79.9%), our best performance since 2014.
A range of initiatives have been implemented to improve
customer service, including: increasing the period of time site
managers are responsible for addressing defects; increasing
the number of meetings between customers and the build
team during the construction process, reviewing Customer
Care departments to maximise use of resource.
We still have areas for improvement, demonstrated by missing
targets to improve our NHBC Construction Quality Review
(CQR) score and to reduce Reportable Items (RIs) per home.
For CQR, we achieved a score of 84.5% (2021 - 83.8%) but
fell short of our 85% target. For RIs per home, this increased
to 0.274 items per home in 2022 (2021 – 0.210), short of the
0.225 target. These areas will be given renewed focus in
FY23 as we strive to continuously improve the service we
deliver to our customers, and our commitment to quality has
again been recognised in the NHBC Pride in the Job Awards.
In 2022 a total of 36 Bellway and Ashberry site managers
collected awards (2021 – 39), acknowledging site managers
who have achieved the highest standards in housebuilding,
recognising their technical knowledge, leadership qualities
and organisational skills.
Target Progress Performance
Headline
Increase year-on-year the HBF 9-month survey
score with the objective of achieving 90% by
July 2026.
Achieved a score of 82.1% in FY22 (2021 – 79.9%) against an
interim FY22 target of 82%.
Retain 5-star
6
homebuilder status (>90%
‘Recommend a friend’) and improve our score to
95% by July 2023 (2021-22 survey year).
Current performance at 93.6% (2021 – 93.5%)
Achieve 86.8%-87.8% NHBC overall customer
satisfaction score by July 2022.
Achieved a score of 87.1% (2021 – 86.6%) in FY22.
Improve NHBC Construction Quality Review
score to 85.0% by July 2022.
FY22 score of 84.5% (2021 – 83.8%). This target will be rolled
over to FY23.
Reduce the average number of reportable items
per home to 0.225 by July 2022.
FY22 score of 0.274 (2021 – 0.210). This target will be rolled over
to FY23.
All emails responded to in 48 hours and
incoming calls answered within 3 rings; missed
calls returned same day.
A new telephone system and training is being trialled.
Strategic Report
38 Bellway p.l.c. Annual Report and Accounts 2022
Engaging in the community
Within this Better with Bellway business priority, we are also
aiming to improve our engagement with the communities
where we operate. This year we introduced a school
engagement programme in partnership with The School
Outreach Company in each of our divisions with the aim
of driving awareness of Bellway and highlighting the career
opportunities available in our industry. We have worked to
actively engage with over 500 schools so far, with activities
including receiving the Bellway newsletter and virtual work
experience sessions. Next year we will begin face-to-face visits
by Bellway staff into schools.
In March 2022 we also embarked on a partnership with the
environmental charity Earth Watch and planted our first
Tiny Forest. We are looking to plant another 10 in the next
year as we develop our partnership with Earth Watch, with
the long-term aim of including a Tiny Forest on each new
appropriate development.
Community investment
Bellway has a longstanding commitment to investing in
the communities in which we develop, over and above
the creation of new homes. Through the planning process
we invest in a wide range of community services including
education, healthcare facilities, sports facilities, transport
infrastructure improvements and the creation of recreational
space. In FY22 our investment amounted to £117.2 million
(2021 – £71.3 million), bringing our investment over the past
three years to £249.0 million.
As well as our investment in the communities where we
develop, housebuilding as a whole delivers a significant
benefit to the UK economy. Using the HBF’s, Lichfield’s and
other publicly available metrics, we have estimated our own
housebuilding activities have contributed £2.3 billion in gross
value added while supporting an estimated 29,300 and
34,800 direct, indirect and induced employment opportunities
across the country. In addition, Bellway contributed
£185.5 million to the public finances in 2022, as well as
facilitating £76.5 million in New Homes Bonus and council tax
payments to local authorities.
Affordability
With the ongoing shortage of new homes in the UK, together
with cost of living pressure, affordability is still viewed as a
barrier to young people getting onto the property ladder.
At Bellway we continue to build a wide range of houses
and apartments to meet the varying budgets and needs of
customers, including people looking to upsize or downsize,
and first time buyers, with our average selling price at
£314,399 (2021 – £306,479). In 2022 12.7% of our homes were
sold to unassisted first-time buyers (2021 – 6.5%), while 21.7%
(2021 – 39.1%) were sold to customers using one of the various
government Help-to-Buy schemes. Overall, 34.2% (2021 –
27.8%) of our homes were sold to first-time buyers and our
developments have continued to incorporate affordable
housing, with 18.4% (2021 – 22.1%) of new homes sold to
affordable housing providers this year.
When the sale of Daniel and Marian’s home fell through,
Bellway was on hand to save the day. The couple had
hoped to buy their dream four-bedroom home at our
Brook View development in Wixam, but on the day
they were supposed to exchange contracts on their old
home, the sale fell through.
The couple quickly signed up to Bellway’s Express
Mover Scheme and within just three days their old
house had been sold meaning they could proceed with
the purchase of their dream home.
It was amazing. I spoke to Rachel at the
sales office who told us all about the Express
Mover Scheme. We signed up on a Friday
and our house was sold on the Monday.
Daniel and Marian
Bellway customers
Helping Daniel and Marian secure
their dream home
Headline KPIs
Headline KPIs 2022 2021
Achieve a 90% score in the HBF
9 month survey by July 2026
82.1% 79.9%
39Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Better with Bellway Strategy and Priorities continued
The people who work for Bellway are one of the
key strengths of the company and creating a safe,
diverse, and inclusive environment, as well as
investing in and upskilling our workforce, is just
one of the ways we can ensure that Bellway is an
Employer of Choice. As at 31 July 2022 we directly
employed 3,042 people (2021 – 2,908), although
when we factor in people employed as a result of
Bellway’s operations across our subcontractors
and supply chain, we support between 29,300
and 34,800 jobs.
Engagement
We undertook our third Employee Engagement Survey
this year to understand how our workforce view Bellway
and identify strengths and weaknesses going forward.
We achieved ‘a great place to work’ engagement score of
95% (2021 – 89%), with a three-year average score of 93%
(FY20–FY22) against a target to achieve a >90% average
score over the FY22-FY24 period.
Diversity, inclusion and belonging
As a responsible employer, we are committed to being
an inclusive organisation that strives to create a working
environment that is open, diverse, and free from all forms of
prejudice and discrimination. Under the Employer of Choice
priority area of Better with Bellway, we have set a range of
targets to improve the diversity of our workforce, in terms of
gender and ethnicity, at all levels of the business. These are
long-term aims and FY22 was the first year of a four-year
programme. As can be seen from the target table above,
we have successfully improved in key areas, but more work
will undertake in FY23 and onwards as we strive to improve
the diversity of Bellway. We have also continued to develop
our employee network, ‘Balance’, bringing people together
from across the business to work on a variety of projects to
support and promote gender balance. We have addressed
issues around working patterns for sales advisers and have
introduced more flexible working practices incorporating core
hours to give employees more flexibility on start and finish
times, as well as our Agile Working Policy giving people the
ability to work from home.
Target Progress Performance
Headline
Achieve a >90% average score in Employee
Engagement Survey of staff who would
recommend Bellway as ‘a great place to work’
over a three-year period (FY22–FY24).
Achieved early with three-year average score of 93%
(FY20-FY22). We will continue to monitor in line with the
original target.
95% of staff would recommend Bellway as ‘a great place
towork’ in July 2022 survey (2021 – 89%).
Reduce voluntary employee turnover rate to
18%or less by July 2024.
Turnover rate in FY22 was 25.7% (FY21 – 26.5%).
Improve gender diversity of our directly
employed workforce to a 60/40 male/female
splitby July 2025.
69/31 split for FY22 (FY21 – 69/31).
Improve gender diversity of our senior leadership
teams to 75/25 male/female split by July 2025.
77/23 split for FY22 (FY21 – 82/18).
Improve ethnic diversity of our workforce to
7%or more by July 2025.
FY22 diversity of 4.5% based on current ethnic minorities
classifications (FY21 – 3.8%). The Government are changing
these classifications in 2023. We will monitor these changes
and update our targets and reporting as appropriate.
Become a Living Wage Employer by July 2024. We are now a Living Wage Employer for directly employed
staff. Work continues on a pathway to full accreditation that will
cover sub-contracted staff.
Increase percentage of our workforce in an ‘earn
and learn’ role to 12% by July 2024 and maintain
5% Club Gold membership.
Currently 7% of the workforce are in ‘earn and learn’ roles with
29 new graduate and 61 new apprentice roles recruited in
FY22 and retained 5% Club Gold membership for FY22.
Implement a programme to improve social
mobility and disability diversity within Bellway
by FY23.
HR will introduce new processes to collect data on disability
and socio-economic background of staff by December 2022.
A strategy will be implemented in FY23 to improve diversity.
Employer of Choice
Creating an environment that our colleagues can thrive in
Strategic Report
40 Bellway p.l.c. Annual Report and Accounts 2022
Bellway is committed to ensuring that all employees who
make the decision to have a family are supported in the
workplace and have enhanced maternity, adoption, shared
parental and paternity leave benefits for eligible employees.
We have also introduced additional support for employees
who sadly lose a baby before 24 weeks.
In addition, during the year we have also enhanced employer
contributions into our occupational pension scheme.
We aim to improve social mobility and disability diversity
within Bellway. The first stage of the programme is due to
be delivered by the end of 2022. Our new HR processes
will enable us to accurately determine the baseline data,
after which a programme will be devised and implemented
in 2023.
North London Assistant Site Manager
wins Apprentice Award
Adam Simms, 19, an aspiring site manager at Bellway’s
North London division was awarded Bellway’s
Apprentice of the Year. The Apprentice Assistant Site
Manager was nominated by his manager and other
colleagues who praised his commitment to the job.
It was a complete shock to get the call
saying I had won the award. My manager
and the Technical Manager on site both said
they had put a nomination in as a thank you
for my work, but I never thought I would go
as far as to win. I was taken aback but very
grateful. It’s always nice to be recognised
for the hard work you put in. I really like the
Bellway ethos and I definitely see myself
staying here for a long time. I’ve already
recommended the apprenticeship scheme
tomy friendsbecause it has been such a
goodexperience.
Adam Simms
Apprentice Assistant Site Manager
The future of Bellway
Bellway would not exist without the talent and commitment
of our colleagues. We invest in our people to ensure that they
have the training and ongoing development necessary to
progress their careers and deliver work they can be proud
of. As an active member of ‘The 5% Club’, we are committed
to having at least 5% of our workforce employed in earn and
learn roles, including apprenticeships, student placements,
and graduate roles. We are pleased to report that this year 7%
of our workforce were in earn and learn roles and we have
recruited 29 new graduate and 61 new apprentice roles, who
joined Bellway in September 2022.
Responsible employer
As a responsible employer we are committed to ensuring
that all of 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. Staff may report
any concerns to our HR department or through our SpeakUp
whistleblowing helpline managed by an external provider.
Other priorities
Labour shortages impact the whole house building industry,
compounded by the post-COVID-19 employment instability
that is prevalent across many industries. Bellway’s voluntary
turnover rate for 2022 has fallen to 25.7% (2021 – 26.5%) as we
work towards our target rate of 18% by 2024. We are already
a Living Wage employer, offering competitive remuneration
and benefits, and we have a target to achieve full ‘Living
Recipients of the 20 year service award at our 2022 EmployeeAwards.
Wage Accreditation’ by the end of the FY24. These activities
will contribute to the overall aim of our Employer of Choice
business priority area - to attract and retain talented
individuals in the business.
Headline KPIs
Headline KPIs 2022
Achieve a >90% average score in Employee
Engagement Survey of staff who would
recommend Bellway as ‘a great place to work’
over a three-year period (FY22–FY24)
93%
41Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Climate change is one of the defining challenges
of our time and as a company. The latest climate
science from the IPCC (The Intergovernmental
Panel on Climate Change, the United Nations
body for assessing the science related to climate
change), described by the UN as “code red for
humanity”, shows it is still possible to limit global
temperature rise to 1.5°C, but we are dangerously
close to that threshold. It is therefore important
to achieve rapid and deep emission cuts with the
aim of halving global emissions before 2030 and
achieving net-zero before 2050.
Science Based Targets
Bellway is committed to ensuring the business plays its role in
delivering carbon reductions and planning for a sustainable
future. As part of the Better with Bellway strategy, we worked
with the Carbon Trust to set two science-based targets (SBTs):
• Bellway commits to reduce absolute scope 1 and scope 2
GHG emissions by 46% by July 2030 from a FY2019 base
year, aligned to the 1.5°C pathway.
• Bellway commits to reduce scope 3 GHG emissions by
55% per square metre of completed floor area by July
2030 from a FY2019 base year, aligned to the well below
2°C pathway using the physical intensity target criteria
(cumulative physical intensity reduction aligned with 7%
year-on-year reduction and capping absolute emissions
inthe base year).
Target Progress Performance
Headline
Reduce ‘absolute’ scope 1 and 2 emissions
(tonnes CO
2
e) by 46% by July 2030 against
FY19 baseline.
Our Science Based Target has been validated by the SBTi.
FY22 saw absolute emissions fall by 5.5% to 18,405 tonnes
CO
2
e (FY21 – 19,484; FY19 base year – 25,715).
Headline
Reduce scope 3 emissions (tonnes CO
2
e per
m
2
floor area) by 55% by July 2030 against
FY19baseline.
Our Science Based Target has been validated by the SBTi.
FY22 saw emissions remain stable at 1.94 tonnes CO
2
e per m
2
floor area (FY19 base year – 1.94).
100% electricity purchased will be REGO certified
by December 2023.
As at the end of FY22, 72.2% of electricity was REGO certified
(2021 – 69.2%).
Fit monitoring equipment at three exemplar
sites and Energy House projects and compare
running costs/energy consumption between
units by December 2022.
5 homes to be fitted with monitoring equipment and
monitored, with learnings to be investigated in FY23.
Install Google Smart Home Technology in all
homes on two sites by December 2022 and
assess energy saving benefits.
Trials ongoing and specifications will be reviewed at the end
of FY23.
Increase number of timber frame
unitsbuiltinNorthern divisions.
All new sites in our North East division from July 2022 will be
built using timber frame.
Deliver timber frame training to relevant site
teams in 2022.
Training has been delivered to all relevant sites.
Research embodied carbon benefits of timber
frame versus traditional block.
This has been completed as part of our Science Based
Target submissions.
Better with Bellway Strategy and Priorities continued
Carbon Reductions
Delivering low carbon homes
Strategic Report
42 Bellway p.l.c. Annual Report and Accounts 2022
We have set the base year as FY19 as this was the most recent
annual data available at the time that was uninterrupted
by COVID-19 lockdowns. Our scope 3 target gœs beyond
the emission reductions that will be required to meet the
Future Homes Standard (‘FHS’) in 2025 – we estimate that
moving to the FHS specification for new homes will deliver
a 38% reduction in emissions per m
2
of floor area, with the
remaining 17% to be achieved through additional emission
saving activity.
These targets have been validated by the Science Based
Target initiative and our first year progress is reported below:
• Against our scope 1 & 2 Science Based Target to reduce
absolute GHG emissions by 46% by July 2030, FY22 market-
based emissions fell by 5.5% to 18,405 tonnes of CO
2
e
(2021– 19,484 tonnes), representing a 28.4% fall from the
FY19 base year (25,715 tonnes).
• Against our scope 3 Science Based Target to reduce GHG
emissions per square metre of completed floor area by
55% by July 2030, FY22 emissions were 1.94 tonnes per m
2
,
remaining stable against the FY19 base year (1.94 tonnes
per m
2
).
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
(forexample diesel in site generators and telehandlers; fuel
in company cars used on company business; gas for heating
in offices, show homes and construction 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 2021 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 from part-exchange properties due to immateriality
– we have undertaken an estimation exercise and the
emission from gas used in these properties during the
period of October to May (when heating would be active
to prevent damp and frozen pipes) is only 0.15% of the total
scope 1 & 2 footprint.
• Emissions from air conditioning units in office buildings
in the FY19, FY20 and FY21 footprints due to immateriality
and difficulty in data collection. We have collected and
accounted for this data in the FY22 footprint.
• 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
isprovided by our groundwork’s 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.
For scope 1 & 2 emissions, data for the 2018/19 base year and
for 2020/21 have been externally verified by Zeco Energy to a
‘reasonable assurance level’ using the ISO-14064-3 verification
standard, while 2021/22 emissions have been verified by
the Carbon Trust to a ‘limited assurance level’ using the ISO
14064-3 verification standard.
For scope 3 emissions, 2021/22 emissions have been verified
by the Carbon Trust to a ‘limited assurance level’ using the
ISO 14064-3 verification standard. Emissions for the 2018/19
base year were calculated with the assistance of The Carbon
Trust for our Science Based Target submission but have not
been through an official verification process. Emissions for
the 2020/21 comparison year were calculated using the
same metrics as the base year and again have not been
externally verified.
43Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Greenhouse gas emissions (GHG) (tonnes of CO
2
e)
(a)
2022 2021
2019
(base year)
Scope 1 – Combustion of fuel and operation of facilities (including diesel and petrol
used on-site and in company cars on Group business) 16,696 17,704 20,560
Scope 2 – Electricity purchased for our own use (market-method)
(b)
1,709 1,780 5,155
Total market-method Scope 1 and 2 GHG emissions 18,405 19,484 25,715
GHG intensity (market-method) per Bellway home sold 1.6 1.9 2.4
GHG intensity (market-method) per Bellway employee
(c)
6.2 6.6 8.6
Scope 1 – Combustion of fuel and operation of facilities (including diesel and petrol
used on-site and in company cars on Group business) 16,696 17,704 20,560
Scope 2 – Electricity purchased for our own use (location-method)
(d)
4,419 5,282 5,518
Total location-method Scope 1 and 2 GHG emissions
(d)
21,115 22,986 26,078
Energy consumption used to calculate above emissions (kWh) 92,854,473 102,076,721 109,622,315
GHG intensity (location-method) per Bellway home sold 1.9 2.3 2.4
GHG intensity (location-method) per Bellway employee
(c)
7.1 7.8 8.8
2022
2019
(base year)
Scope 3 (Category 1a: Purchased goods and services – product) 731,398 683,594
Scope 3 (Category 1b: Purchased goods and services – non-product) 13,095 16,261
Scope 3 (Category 2: Capital goods) 4,718 19,030
Scope 3 (Category 3: Fuel and energy related activities) 5,142 5,081
Scope 3 (Category 4: Upstream transportation and distribution) 121,897 113,930
Scope 3 (Category 5: Waste generated in operations) 2,391 4,253
Scope 3 (Category 6: Business travel) 1,987 418
Scope 3 (Category 7: Employee commuting) 1,516 1,468
Scope 3 (Category 11a: Use of sold products – direct) 1,084,788 1,059,905
Scope 3 (Category 12: End-of-life treatment of sold products) 114,638 107,145
Total Scope 3
(e)
2,081,570 2,011,085
Scope 3 – GHG intensity (tonnes CO
2
e per m
2
of completed floor area) 1.94 1.94
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.
d. Scope 2 emissions reported using the location-based method for total electricity used which dœs not account for the zero-carbon nature of electricity supplies purchased under REGO contracts.
e. Total scope 3 emissions are reported in line with our scope 3 science -based target, and so exclude category 11b (use of sold products – indirect). We have separately calculated these
category 11b emissions as part of our carbon lifecycle analysis as 670,878 tonnes of CO
2
e (2019 – 662,146). Categories 8, 9, 10, 14 and 15 are not relevant to the Group.
Scope 1 emissions fell by 5.69% while scope 2 emissions
(market-based) have again fallen by 3.99%, due to our
increased use of REGO (Renewable Energy Guarantee of
Origin) electricity supplies and the ongoing decarbonisation
of the UK electricity mix. 72.15% of our electricity is from
renewable sources (2021 - 69.2%) which has saved 5,263
tonnes of carbon from entering the atmosphere in the past
year. Discounting the benefit of our REGO supplies, location-
based scope 2 emissions fell by 16.3%.
With 11,198 new homes completed for the year, scope 1 & 2
emissions (market-based) per home sold fell by 15.8% to 1.6
tonnes (2021 – 1.9). With employee numbers largely static,
ourscope 1 & 2 (market-based) emissions per employee
havefallen by 6.1% to 6.2 tonnes (2021 – 6.6).
Improvements in scope 3 emissions will take longer to
bring to fruition. Step change savings will be made as we
transition to the 2022 building regulations which will require
all new homes to produce 30% less emission than current
regulations. Then, in 2025, the Future Homes Standard is
expected to come into force which will require a 75-80%
reduction in emissions compared to current regulations,
soan additional 45-50% over and above the 2022 regulations.
The anticipated costs associated with complying with the
Future Homes Standard are incorporated into the land
viabilities, site valuations and Group forecasts. Over and
above the building regulation changes, we aim to drive
additional scope 3 emission savings through enhanced
homespecifications and engagement with our supply
chainto reduce embodied carbon in the materials we use
tobuild new homes.
Better with Bellway Strategy and Priorities continued
Carbon Reductions continued
Strategic Report
44 Bellway p.l.c. Annual Report and Accounts 2022
Building developments
Linked to the development of our Future Homes Standard
specification, work has started on a number of initiatives to
deliver lower carbon and more energy efficient homes for
our customers.
We are building an experimental eco house called ‘The
Future Home’ as part of a research project which could
influence how we use our homes in the future. ‘The Future
Home’ is being built at The University of Salford’s leading
net-zero research facility Energy House 2.0 and will test
innovations in building materials, the effects of double and
triple glazing, storing solar energy, recovering heat from
wastewater, and how to make most efficient use of air source
heat pumps. Each of these elements will be monitored in
both regular and extreme temperatures, with varying weather
conditions simulated inside the specially built chamber.
The findings will help shape future housing design to enable
the UK to achieve its net zero carbon emissions targets.
‘The Future Home’ is one of a series of test sites that we have
set up across the country to work with new energy efficient
technologies. Currently, four ‘Future Homes’ are being built
in Callerton, Newcastle, which will be available for open sale,
and homeowners will work with Bellway to monitor energy
usage as part of Bellway’s wider carbon reduction strategy.
In addition, we are trialling Google smart thermostats across
three sites to calculate the benefit for dwelling emission rates
as well as energy savings for customers.
Our existing homes are already extremely energy efficient
when compared to the second-hand home market, with
high levels of insulation, double glazing and energy efficient
boilers for heating/hot water. We continue to install renewable
technology on our current homes and in 2022, 25.0% of new
homes were fitted with this technology (2021 – 27.0%), helping
to both reduce carbon emissions and also reduce energy bills
for customers. On average, the Dwelling Emission Rate (‘DER’)
of our new homes this year was 6.9% better than required
by the relevant building regulations (2021 – 3.9%) (DER is a
measure of carbon emissions, based on SAP calculations,
from the normal running of a home, with lower emissions
equating to reduced energy consumption and so lower bills
for customers).
Site fuel
Trials have been completed to prove that a hydrotreated
vegetable oil (HVO) biofuel alternative to traditional diesel is
suitable for use in our telehandlers. Following confirmation
that the fuel is also compatible with our generators’
suppliers, we will begin site-wide trials of the fuel to
compare performance with traditional diesel. If successful,
the widespread use of the HVO biofuel has the potential to
deliver significant reductions in our scope 1 & 2 emissions,
contributing progress towards our Science Based Targets.
Bellway welcomes Google
As part of our sustainability strategy, we have teamed up
with Google at one of our developments to fit a series of
hi-tech products into the interior of all private homes on
the site, including the Google Home Hub, Google Nest
Thermostat, and Google video doorbell.
The Google project at Abbey Fields Grange will serve
as a pilot scheme, aimed at increasing sustainability
measures for homeowners. The trial has allowed us to
demonstrate the benefits of the energy saving features
of this technology, which could see it rolled out across
all of our new homes.
This technology will allow homeowners
at Abbey Fields Grange to live in a more
sustainable manner, in a way that is aligned
with Bellway’s overall mission to be a
responsible housebuilder in an increasingly
climate conscious world.
Kenny Lattimore
Sales Manager at Bellway’s East Midlands division
Electrifying the car fleet
Following a review of the existing company car and car
allowance schemes, the Board have approved an initiative
tomake electric and low carbon vehicles (EVs) more
affordable to Bellway staff, helping them reduce their own
carbon footprints. Initially, monthly paid staff are now able
to lease an EV via salary sacrifice (with the associated tax
savings) for an all in monthly cost covering the vehicle, road
fund tax, insurance, servicing and tyres. We are also rolling
out the installation of EV charging points at all Bellway offices
to enable staff to charge their vehicles.
Headline KPIs
Headline KPIs 2022 2021
Reduce ‘absolute’ scope 1 and2
emissions by 46% by July2030
(tonnes)
18,405 19,484
Reduce scope 3 emissions by
55% by July 2030 (tonnes)
1.94 –
45Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Better with Bellway Strategy and Priorities continued
In meeting the requirements of Listing Rule 9.8.6 R, we have concluded that:
• For FY22, we fully comply with recommended disclosures 1, 2, 3, 4, 6, 8, 10 and 11
• For FY22, we partially comply with recommended disclosures 5, 7 and 9.
TCFD recommended disclosures Cross-reference or reason for non-compliance Next steps and further comments
Governance
1) Describe the Board’s oversight of
climate-related risks and opportunities.
2022 Annual Report – Governance
section (Pages 86–139)
Compliant
We will continue to ensure that
climate-related issues are included in
Bellway’s senior leadership decision-
making processes.
2) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
2022 Annual Report – Governance
section (Pages 86–139)
Compliant
We will continue to develop and disclose
the allocation of roles and responsibilities
of climate-related issues to management
across Bellway.
Strategy
3) Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium and
long-term.
2022 Annual Report – Strategic report
section (Pages 10–83)
Compliant – We have undertaken
an assessment of the financial
impacts of our climate-related risks
and opportunities.
We will continue to undertake and refine
a financial quantification assessment
of our climate-related risks and
opportunities, to further understand their
financial impact.
4) Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy
and financial planning.
2022 Annual Report – Strategic report
section (Pages 10–83)
Compliant – We have assessed
how our commercial strategy will be
impacted by our identified climate-
related risks and opportunities.
We will continue to review our Better
with Bellway strategy to encompass
our identified climate-related risks
and opportunities.
5) Describe the resilience of the
organisation’s strategy, taking
into consideration different future
climate scenarios, including a 2°C or
lower scenario.
2022 Annual Report – Strategic report
section (Pages 10–83)
Partially compliant – We have
begun to assess the resilience of
our commercial strategy to climate-
related risks.
We will review and report on how
resilient our Better with Bellway
strategy is to climate-related risks and
opportunities, we aim to achieve this by
the end of 2023.
Risk management
6) Describe the organisation’s processes
for identifying and assessing climate-
related risks.
2022 Annual Report – Risk
management (Pages 75–78)
Compliant
On an ongoing basis, we will continue
to enhance our level of awareness
regarding our climate-related risks and
opportunities in line with emerging
regulatory requirements.
7) Describe the organisation’s processes
for managing climate-related risks.
2022 Annual Report – Risk
management (Pages 75–78)
Partially compliant – we are yet to
detail our processes (e.g. risk mitigation,
transference, acceptance or control)
for managing climate-related risks.
In addition, we are yet to detail our
process for determining climate-related
materiality within our organisation.
We will be undertaking further review
of our decision-making processes for
current and future risk control as well
as further developing our processes for
determining climate-related materiality.
We aim to achieve this by the end
of 2023.
Task Force on Climate-related Financial Disclosures (TCFD)
Strategic Report
46 Bellway p.l.c. Annual Report and Accounts 2022
TCFD recommended disclosures Cross-reference or reason for non-compliance Next steps and further comments
8) Describe how processes for
identifying, assessing and managing
climate-related risks are integrated
into the organisation’s overall
risk management.
2022 Annual Report – Risk
management (Pages 75–78)
Compliant
We will continue to monitor and
manage our risk management
processes to ensure climate-related
risks are integrated and appropriate
accountability is maintained.
Metrics and targets
9) Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities.
2022 Annual Report – Carbon
Reductions section (Pages 42–45)
Partially compliant – we have not yet
set opportunity metrics related to low-
carbon products and services or for
climate-related remuneration. We have
not yet set an internal price of carbon.
We are in the process of setting and
disclosing an internal price of carbon,
we aim to achieve this by the end
of 2023.
10) Disclose scope 1, scope 2, and if
appropriate, scope 3 greenhouse gas
emissions, and the related risks.
2022 Annual Report – Carbon
Reductions section (Pages 42–45)
Compliant
We are committed to continually
reporting and reducing all of our
greenhouse gas emissions. We are also
committed to disclosing GHG emissions
against appropriate efficiency ratios.
11) Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets.
2022 Annual Report – Carbon
Reductions section (Pages 42–45)
Compliant
We will continue to report progress
against our climate-related targets
including our targets and metrics
around water usage and waste
reduction within our value chain.
As a responsible homebuilder, we recognise that climate
change is a growing and significant issue. For a second
consecutive year, we are reporting against the Task
Force on Climate-related Financial Disclosures (TCFD)
recommendations. This year, we have focused on enhancing
our understanding of climate-related financial risks and
opportunities. We have assessed their impact on the business,
through a series of workshops, in order to understand the
financial significance of each risk and opportunity. We define
this process as the financial materiality assessment of our
climate-related risks and opportunities.
Our approach is structured in line with the four TCFD
supporting recommended disclosures:
• Governance.
• Strategy.
• Risk management.
• Metrics and targets.
We have provided a summary of our performance against
each recommended disclosure above, and a reference table.
We will continue to refine our approach to identifying,
assessing and managing our climate-related financial risks
and opportunities. We will align with the guidance outlined
inthe Task Force’s implementation guidance before 2025.
Governance
Climate change represents a principal risk for our business
and, as such, it is treated with the utmost importance by our
Board and within our approach to governance. Our Group
Finance Director is the Board sustainability sponsor and is
responsible for monitoring climate change risks, opportunities
and business impacts. The Group Finance Director sits on the
Executive Team, the Board and chairs the Better with Bellway
Leadership Committee.
The Better with Bellway Leadership Committee monitors
climate-related responsibilities and progress against our
operational targets, including around carbon reduction.
The Committee is also responsible for the management
of sustainability at a strategic level and oversees the
development of our Better with Bellway sustainability strategy.
The Committee is supported by the Better with Bellway
Leadership Team, chaired by the Group Head of Sustainability.
47Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
The Better with Bellway Leadership Team has been assigned
responsibility for raising the profile of environmental, social
and governance (ESG) risks within Bellway and is responsible
for the delivery of the Better with Bellway strategy.
Annually an in-depth sustainability update is provided to the
Board, this includes progress towards achieving the Better
with Bellway KPIs and targets. In addition, a strategy update is
provided at each meeting to ensure the Board are equipped
with relevant information on climate issues. The Board use
this information when reviewing the Group’s overall strategy,
business decisions, forecasts and risk management. This can
be evidenced in decisions relating to strategic land purchases,
expansion of the trial of timber framed construction and the
electrification of the company car fleet.
The Audit Committee receives quarterly updates on business
risks which include climate change. Annually, the Committee
undertakes a comprehensive review of key business risks.
Strategy
Our Better with Bellway strategy relies on our commitment
to deliver long-term value for our customers, employees,
suppliers, shareholders, the environment and the wider
community. We will continue to support the UK Government
in the realisation of its net-zero target by 2050. Our efforts
to tackle climate change are framed within four of the eight
pillars of our strategy:
Carbon Reductions
• Developing science-based carbon
reduction targets.
• Identifying and mitigating our climate-related
financial risks and opportunities.
Resource Efficiency
• Implementing energy-efficient construction
practices and equipment.
• Innovating and investing in research
and development.
Sustainable Supply Chain
• Evaluating the embodied carbon in our
raw materials.
• Working with suppliers to find opportunities along
the supply chain.
Building Quality Homes, Safely
• Complying and exceeding the requirements of
theGovernment’s Future Homes Standard.
• Designing homes with reduced
energy consumption.
Climate scenario analysis
We first embarked on our journey to identify climate-related
financial risks and opportunities for our business in 2021.
This year we expanded upon this and developed a robust
approach to climate scenario analysis. We assessed the
resilience of our strategy against possible climate futures using
the latest climate science as set out in the Intergovernmental
Panel on Climate Change’s Representative Concentration
Pathways (RCPs):
a
Climate scenarios
Cautious scenario (RCP 4.5) A predicted global temperature
increase between 1.7°C and
3.2°C, in line with current climate
change policies, pledges
and commitments.
Worst-case scenario
(RCP8.5)
A global temperature increase
between 3.2°C and 5.4°C, where
carbon emissions continue
growing unmitigated.
For our TCFD reporting, both climate scenarios are projected
over three time horizons – short-term (2022 to 2040), medium-
term (2040 to 2060) and long-term (2060 to 2080). The time
horizons encompass the wide range of timeframes over
which the different climate-related risks will be realised.
The equidistant timeframe of each presents a clear distinction
between the short, medium, and long-term and allows for
longer-term planning of key climate-related risks. For the
context of Bellway, the time-horizons took in to account the
lifetime of Bellway’s assets (primarily homes), the profile of the
climate-related risks, and the geography of operation across
the UK. The following parameters were considered:
• The short-term time-horizon allows for the prioritisation of
risks and opportunities to be included within operational,
financial, and capital planning;
• Industry guidance highlights the typical lifespan of homes
as up to 60 years (for the purposes of whole lifecycle
carbon assessments); and
• Bellway Homes operate out of 22 divisions in England,
Scotland, and Wales. The time-horizons took account of
the relevant geographical data from the UK Met Office
(2018). This dataset shows clear changes and projections
for physical climate-related impacts at key milestones in
alignment between present day and post-2070s.
Notes
a Representative Concentration Pathways (RCPs) were defined by the Intergovernmental Panel on Climate Change (IPCC). The RCPs are considered a method to set different scenarios under
economic, social and physical assumptions that might occur because of climate change, and compare global carbon emissions against pre-industrial levels, projecting the effects from now
until the end of the century.
Task Force on Climate-related Financial Disclosures (TCFD) continued
Better with Bellway Strategy and Priorities continued
Strategic Report
48 Bellway p.l.c. Annual Report and Accounts 2022
Notably, most climate models deliver scenario results for
physical impacts at a timeframe beyond 2050. The immediacy
of the physical risks will increase under a high-emission
scenario and should be considered over the short-term.
The climate scenario analysis outlined above was used
to identify the projected climate changes across England,
Scotland and Wales. Consistent with TCFD, we identified:
• Physical risks: defined as direct damage resulting from
climate change phenomena. These can be event-driven
(acute) or long-term shifts (chronic) in climate patterns.
• Transition risks: defined as policy and legal, technological,
market and reputation impacts, associated with
the implementation of measures to reach a low-
carbon economy.
• Opportunities: realised benefits of climate change arising
from new policies, operational efficiencies, resource
efficiencies, and capitalising upon the low-carbon market
and technological drivers.
We also assessed the financial significance of our climate-
related financial risks and opportunities by:
1. Conducting a financial climate change workshop with
cross-departmental representation.
2. Analysing the financial thresholds and value of our current
and pipeline land and housing portfolio.
3. Identifying the potential financial impacts of every climate
risk for the business.
4. Classifying every risk and opportunity in the financial
threshold, depending on the level of impact against
Bellway’s portfolio value i.e. assets and land.
The most relevant climate-related risks we have identified are
summarised on page 50-52. This includes the level of financial
impact for the short-term time horizon (2022 – 2040).
Risk: financial impact score key:
1. Impacts less than 1% of Bellway’s portfolio value.
2. Impacts between 1% to 2.5% of Bellway’s portfolio value.
3. Impacts between 2.5% to 5% of Bellway’s portfolio value.
4. Impacts more than 5% of Bellway’s portfolio value.
For each climate-related opportunity, we have identified a
potential value score for the short-term time-horizon (2022
to 2040). Each opportunity is scored against the strength of
the benefits Bellway will experience if they are to realise the
identified opportunity. The thresholds are defined as follows:
Opportunity: financial impact score key:
1. An increase to Bellway’s portfolio value at less than 1%.
2. An increase to Bellway’s portfolio value at 1% to 2.5%.
3. An increase to Bellway’s portfolio value at between
2.5and5%.
4. An increase to Bellway’s portfolio value at more than 5%.
The financial impacts of the risks and opportunities is
considered as part of the financial planning process. This can
be evidenced by the allocation of resources for initiatives
including the Future Home per page 45.
49Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Physical risk
Financial score
Category Identified climate risk Actual and financial impact
Cautions Scenario
(short-term
time-horizons)
Worst Case
Scenario (short-
term time-horizons)
Acute Increased frequency and
intensity of heatwaves
leading to adverse on-site
working conditions.
• Increased expenditure as a result of
implementing measures to maintain
comfortable working conditions on
construction sites.
• Reduced revenue and increased costs
as a result of build delays caused
by labour disruption and decreased
production capacity.
Score 1 Score 2
Increased frequency and
intensity of extreme rainfall
events leading to increased
river, coastal and surface
water flooding.
• Increased costs of repair and loss of
useable materials during construction.
• Reduced availability of future
developable land.
• Increased operating costs due to the need
for additional drainage, or amendments
to existing drainage, both during
development and upon completion.
Score 1 Score 2
Chronic Sustained increase in
temperatures leading to poor
thermal comfort/overheating
in homes.
• Increased costs due to adapting and
redesigning new homes.
• Reduced sales revenue and investment
if buyers and investors perceive that
the design of Bellway’s homes are not
adequate for mitigating against the effects
of climate change.
Score 1 Score 2
Sea and tidal river levels rise
may put some site locations
in the coastal regions and
near flood plains up-river at
risk of flooding.
• Increased costs due to prolonged planning
and construction times for at-risk sites.
• Loss of revenue due to reduced availability
of future useable land and inability to
include planned units on at-risk sites.
• Increased insurance premiums and
reduced availability of insurance on assets
at high-risk locations.
Score 1 Score 2
Better with Bellway Strategy and Priorities continued
Task Force on Climate-related Financial Disclosures (TCFD) continued
Strategic Report
50 Bellway p.l.c. Annual Report and Accounts 2022
Transition risk
Financial score
Category Identified climate risk Actual and financial impact
Cautions Scenario
(short-term
time-horizons)
Worst Case
Scenario (short-
term time-horizons)
Policy
and legal
Many local authorities
have declared climate
emergencies, aligned to the
Environment Act and the
Planning and Energy Act,
and have set expectations
of developers to address
associated impacts.
• Increased operating costs as a result
of planning delays or rejections
by local authorities and the
associated resubmissions.
• Reduced revenue due to negative
perception of stakeholders arising
from an insufficient response to local
authority requirements.
• Constrained land supply leading to inflated
land costs.
• Loss of revenue if stakeholders perceive
that Bellway is not responding appropriately
to local authority climate agendas.
• Financial penalties and a fall in demand
and investment if newlocal authority
requirements are not met.
Score 1 Score 1
Failure to comply with the
Future Homes Standard for
England which is planned
to be introduced by 2025 –
requiring new build homes
to be future-proofed with
low carbon heating and
a very high standard of
energy efficiency.
• Reduced sales revenue and investment
if buyers and investors perceive that
the design of Bellway’s homes are not
adequate for mitigating against the effects
of climate change.
• Financial penalties and a fall in demand
and investment if newregulatory
requirements are not met.
Score 3 Score 4
Failure to report and
disclosure both mandatory
and voluntary climate-
related information to a
credible standard.
• Reduced demand and investment
if partners, customers and potential
investors perceive Bellway has had a
delayed response to the climate-related
reporting landscape.
• Increased costs from fines and judgments
arising from non-compliance and with new
reporting requirements.
Score 1 Score 1
Technology Insufficient development and
availability of more efficient
products and technologies
to deliver climate-
resilient homes.
• Increased costs due to investment in
research and development.
• Increased costs from extended build
time and effort to deliver homes and
developments resilient to climate change.
• Loss of revenue if buyers perceive
that Bellway is unable to offer climate-
resilient homes.
• Constrained supply of more efficient
products and technologies leading to
inflated prices.
Score 3 Score 3
The Government has now
recognised that low carbon
homes may be more
expensive for customers than
existing (e.g., gas boiler) homes.
• Increased costs due to higher input prices
of ‘renewable’ resources and equipment.
• Reduced demand and sales revenue as a
result of negative feedback from buyers on
the costs of running a Bellway home or if
buyers favour older properties as opposed
to new builds.
Score 2 Score 2
51Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Better with Bellway Strategy and Priorities continued
Transition risk continued
Financial score
Category Identified climate risk Actual and financial impact
Cautions Scenario
(short-term
time-horizons)
Worst Case
Scenario (short-
term time-horizons)
Market Supply chain challenges
resulting in exhausting
of resources leading to
decreased availability of
building materials.
• Increased costs due to inflated input prices
and delays in construction activity.
• Reduced revenue from a reduction in
completed homes.
Score 3 Score 3
Failure to improve Bellway's
carbon footprint by
meeting the Science Based
Targets, whereby scope 1,
2 and 3 carbon emissions
are reduced.
• Increased operating costs due to
construction and wider business
disruptions resulting from the transition to a
low-carbon economy.
• Damage to share price owing to a
perception of potential and existing
investors that Bellway has not met its net-
zero commitments.
• Increased expenditure and costs resulting
from the actions and initiatives required to
meet Science Based Targets.
Score 2 Score 2
Reputation Customers and communities
do not perceive that Bellway
has responded/contributed
appropriately or sufficiently
to the transition to a low-
carbon economy.
• Loss of competitive advantage resulting in
reduced demand for Bellway homes and a
fall in sales revenue.
• Damage to share price if potential and
existing investors perceive that Bellway’s
response to transitioning to a low-carbon
economy has been inadequate.
Score 3 Score 3
Failure to embed
sustainability in the business
(including within staff
training and development
processes) may lead to
the business becoming
unattractive to staff, potential
investors and existing
shareholders as sustainability
and ESG performance are
increasingly incorporated
into employment and
investment decisions.
• Increased costs due to recruitment/
inductions and associated construction
and business disruptions.
• Reduced revenues due to the impact of
workforce issues on completions.
• Damage to share price if the business is
not seen as an attractive investment due
to perceived poor performance regarding
sustainability and ESG.
• Increased staff turnover resulting in loss of
knowledge and inefficiency.
Score 1 Score 1
TCFD opportunity
Category Identified climate opportunity Business impact
Potential
value
Resource
efficiency
Achieving savings from optimising resources
consumption and adopting circular economy
measures, reintegrating fit-out materials to
productive cycles, reducing waste costs and buying
less materials.
Operational savings and reduced expenditure
for materials and waste management.
Score 2
Technology Harnessing significant operational savings
by investing in energy-efficient equipment,
sustainable materials and implementing sustainable
building practices.
Operational savings, more efficient building
processes, more efficient technology
and equipment.
Score 2
Market and
reputation
Increase in demand for housing due to the
impact of climate change (more people in need of
homes due to forced displacement and migration,
for example).
Increase in demand, sales and market share
resulting in enhanced revenue.
Score 1
Task Force on Climate-related Financial Disclosures (TCFD) continued
Strategic Report
52 Bellway p.l.c. Annual Report and Accounts 2022
Better with Bellway is regularly reviewed by the Board, the
Better with Bellway Committee and the Better with Bellway
Leadership Team, against our identified scenarios, to monitor
and further identify climate risks, opportunities and financial
impacts and how these will affect Bellway as a business.
Risk management
At Bellway, climate-related risks have been integrated into
ourestablished company-wide Risk Management Framework.
This framework is overseen by our Audit Committee, and
we utilise our Risk Management Policy to identify the current
climate-related risks and opportunities. This process considers
internal and external uncertainties which, if they occur, will
have a significant impact on our business. Once we identify
our risks, we then categorise each of them as follows:
• Strategic risks.
• Operational risks.
• Financial risks.
• Compliance risks.
• Reputational risks.
A full summary of our climate-related risks and opportunities,
and their associated business and financial impacts, is
captured within our internal TCFD Risk and Opportunities
Register. The register provides a coherent framework to
identify, assess, manage and monitor the impacts of climate
change on our business. We identify current or future
mitigation measures and controls for the risks to reduce the
impact and likelihood of each arising. We follow the same
method to identify our climate-related opportunities.
Following the quantification of the most significant risks and
opportunities for our business, we then integrate these into
our company-wide strategic Risk Register. This Risk Register
isreviewed on an annual basis by the Board, with risks
deemed high or significant then monitored on a quarterly
basis by the Audit Committee, to prevent the actualisation of
arisk event.
Metrics and targets
We understand that further and more tangible steps
need to be taken to mitigate our climate-related risks and
realise opportunities, both for the future of our planet and
our business.
The most significant climate-related risk to the business
identified through the scenario analysis is the failure to
comply with the Future Homes Standard.
Our scope 3 target gœs beyond the emission reductions that
will be required to meet the Future Homes Standard in 2025.
The Group monitors carbon emissions through the
metrics and targets that form part of Better with Bellway
strategy. These targes outline our commitment to drive
down emissions throughout our operations and our value
chain. We have set targets which are aligned to the SBTi
1.5°C ambition.
In line with our legal obligation under the Companies
(Directors’ Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018 and the Greenhouse
Gas Protocol, we have continued to measure our scope 1 and
2 greenhouse gas (GHG) emissions and are pleased to report
a 5.5% reduction from 2021. This progress is critical to our
business as we continue on our journey towards net zero by
2050. For Bellway, we define net zero as reducing our scope 1,
2 and 3 emissions to zero, consistent with achieving net-zero
emissions in line with the Paris Agreement. Our definition
accounts for neutralising any residual emissions at the net-
zero target year and any GHG emissions released into the
atmosphere thereafter with appropriate initiatives, measures
and technologies.
For more information on our carbon footprint, please see
pages 42-45.
We are proud of our performance to date and have set
ourselves stretching targets, which will manage our climate-
related risks, realise our climate-related opportunities, and
achieve net zero by 2050. Our targets include:
• 46% reduction of absolute scope 1 and scope 2 (tonnes of
CO
2
e) emissions against our 2019 baseline by 2030.
• 55% reduction of our scope 3 emissions (tonnes CO
2
e per
m2 floor area) against our 2019 baseline by 2030.
• 100% electric or hybrid company car fleet by July 2025.
• 100% of purchased energy to be from renewable sources,
and REGO-certified, by December 2023.
• 20% reduction in waste per completed unit by July 2025.
• Reduction in construction site water usage against the
baseline of FY21 by July 2025 (m
3
of water per 1000m
2
ofcompleted homes).
These targets will help strengthen our resilience against
climate change, increase our investors’ trust and enable us
to play a full and active role within the construction industry
to drive innovative change around carbon reduction.
In addition, targets around reducing scope 1 and scope 2
emissions and waste have been added as a performance
criteria for the Group’s long-term incentive remuneration,
seepages 115 for further information.
For more information, please see our Better with Bellway
pageon our website.
53Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
The health, safety, and wellbeing of our
colleagues and subcontractors is our highest
priority. This is an area which has always
demanded our full focus, but there is still room
to improve. By setting ambitious goals for our
organisation, we will raise the quality and safety
of our work to even higher levels.
Encouraging safety and transparency
We actively promote safe working on all our sites, using
training, toolbox talks, informal and formal inspections, and
best practice forums. We encourage our colleagues and
subcontractors to talk to us about any areas of concern
regarding health and safety and have set new KPI safety
measurements for Site Managers this year, with performance
linked to their annual bonus.
New health and safety training modules have been
developed for Site Managers, Assistant Site Managers and
Construction Managers covering, amongst other issues, safety
procedures, accident investigation, temporary works, near
miss reporting and scaffolding standards. These modules are
included in the induction process. The training was due to
be delivered to at least 50% of relevant roles this year (with
the remaining 50% in FY23), but due to delay of the launch of
our new on-line training platform has resulted in the training
being delayed until FY23. For new roles, training will be
undertaken within three months of starting with Bellway, and
for all relevant staff, training will be repeated every three years.
Investigating and preventing
We are placing even greater focus on health and safety by
measuring our RIDDOR seven-day reportable incident rate on
a rolling average basis, not just an annual snapshot. We have
already made progress towards our target of an average
three-year RIDDOR rate of less than 305 by FY24, with the
period covering FY19, FY21 and FY22 standing at 340.5
incidents per 100,000 site operatives. FY20 has been excluded
due to COVID-19 and site closures.
As part of our strategy to improve safety and reduce our
RIDDOR rate, we have undertaken a preventative programme
to reduce accidents from identified reporting areas year-
on-year. Slips, trips and falls fell to 78 (2021 – 129), a decrease
of 39.5%. Third party reported accidents fell by eight when
compared to 2021, with manual handling injuries saw a slight
change with 80 incidents this year (2021 – 78).
Target Progress Performance
Headline
Reduce the average RIDDOR rate (measured
over a three-year period) to <305 by July 2024.
The RIDDOR rolling average (FY19, FY21 & FY22) is currently at
359.98
Headline
>80% of applicable employees trained on the
Group’s Fire Safety Policy and the Building Safety
Bill by July 2022.
As at 31 July 2022 69% of applicable staff have been trained.
Reduce accident rates from identified reporting
areas to below previous FY levels on an
annual basis.
Accidents involving slips/trips/falls, third parties have fallen
compared to FY21. Manual Handling saw a slight increase and
we continue to focus on making improvements in this area.
50% of identified target roles will have received
health and safety training by July 2022 (95% by
July 2023).
Training courses have been created but roll-out has been
delayed until FY23.
Implement new safety induction across Bellway
and 100% of new recruits to have completed
induction by July 2023.
Programme created and will be launched in FY23.
Increase the ratio of mental health first aiders
(‘MHFA’) to 1in 10 by July 2024.
Ratio decreased to 1:34 (2021 - 1:31) as there have been some
MHFA leavers in the year.
Increase employees receiving mental health
awareness training to 1 in 5 by July 2024.
New mental health awareness training was rolled out during
the year which was received by 1:19 employees.
Achieve ISO 14001 certification for the whole
business by July 2024.
We are in the process of working towards certification.
Better with Bellway Strategy and Priorities continued
Building Quality Homes, Safely
Quality and safety first for everyone
Strategic Report
54 Bellway p.l.c. Annual Report and Accounts 2022
Mental health
The mental health of our colleagues is vitally important to
Bellway, and we are targeting an increase in the ratio of
mental health first aiders to 1 in 10 by FY24 (2021 – 1 in 31).
Over the next two years we plan to train 140 employees
per year which will deliver the 1:10 ratio while allowing
forstaff turnover.
In addition, this year saw the roll-out of our mental health
awareness training. We aim to increase the number of
employees receiving this training to 1 in 5 staff by July
2024. So far, 160 employees (1:19) have been provided with
awareness training. We plan to provide awareness training
to230 employees per year in FY23 and FY24, delivering the
1:5 ratio while allowing for staff turnover.
Proactive remediation
Following the Grenfell tragedy in June 2017, we proactively
instigated a full review of our high-rise portfolio and identified
buildings with aluminium composite material (ACM) cladding.
In April 2022, the Group, as part of the Building Safety Pledge,
announced a commitment to resolve any historical fire
remedial work on buildings completed since 5 April 1992,
asa result the Group increased its provision for legacy safety
improvements further. In addition, while the Pledge only
relates to England, we have taken the responsible approach,
and provided for the limited number of apartment buildings
built by the Group in Scotland and Wales.
We are currently engaged in a complete programme
of works to remediate those buildings. In addition, we
have implemented a programme to ensure all applicable
employees receive training on the principles of the Group Fire
Safety Policy and Building Safety Bill. The target was to train
80% (908 individuals) of applicable staff by July 2022, andour
year-end performance was 69%. Around 350 additional
individuals have now been identified for training (additional
staff and new starters) and these individuals will be trained
in FY23.
Headline KPIs
Headline KPIs 2022 2021
Reduce the average RIDDOR
rate (measured over a three-year
period) to <305by July 2024
340.5
(FY19, FY21 &
FY22)
355.1
(FY18, FY19 &
FY21)
>80% of applicable employees
trained on Group Fire Safety
Policy and Building Safety Bill by
July 2022
69% –
This year saw the introduction of our Health and Safety
Awards, with the purpose of recognising the site teams
across the Group going above and beyond to raise
standards in Health and Safety, and acknowledging their
hard work and roll out of best practices. Each of our 22
divisions will have two nominations, totalling 44 across
the Group.
They will be assessed using 39 categories including:
work equipment, waste management and fire.
Each category is scored between 0 (non-compliant)
and6 (exceptional).
Bellway Health and Safety Awards
55Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
We aim to source all of our products and services
in an ethical, sustainable, and socially conscious
way. The initiatives and goals formulated as
part of Better with Bellway will ensure that we
continue, and improve upon, our efforts to date.
Developing long-term relationships
Developing long-term partnerships with our subcontractors
and suppliers is an integral part of what makes Bellway a
success, and we ensure that all of our supply-chain partners
and subcontractors are treated with dignity and respect.
As part of this we are a signatory to the Prompt Payment
Code, and we pay our suppliers and subcontractors within
agreed terms.
For our 2022 financial year, our supply chain spend was
£1.8 billion (2021 – £1.8 billion), delivering a £1.6 billion
investment in the UK economy (based on the HBF estimating
that 90% of housebuilders’ supply chain spend remains in
the UK
a
).
Encouraging opportunities to learn
Bellway is a member of the Supply Chain Sustainability School
(SCSS) and sit on several working groups within the school.
As part of our commitment to lifelong learning and continual
improvement, from 2022 we will be rolling out SCSS training
modules for all of the colleagues in our Procurement team.
We also encourage our supply chain partners to sign up to
SCSS and through Bellway’s membership they are able to
access, free of charge, a wide range of training and resources
to help their businesses become more sustainable. Of our
top 100 suppliers, 63 are now members of the SCSS, of which
25% hold GOLD membership, we aim to increase this to 75%
by FY23.
We have engaged with our top-ten suppliers on a wide range
of sustainability issues, with a two-way sharing process aimed
at delivering benefits across both Bellway and our supply
chain. This will continue and we aim to engage with our top
50 suppliers by FY24.
Responsible sourcing
As part of plans to introduce a Sustainable Procurement
Policy in FY23, we have been working with our supply chain
to reduce single use plastics in the packaging we receive.
Many suppliers are now moving to recycled cardboard as an
alternative and switching to higher recycled content plastics
where there are no current alternatives. We requested all
of our suppliers to ensure that, from April 2022, they use a
minimum of 30% recycled content in any plastic packaging
they provide to us. We plan to report on the quantity
of plastics removed from the supply chain in our FY23
annual report.
For a number of years, we have required all our timber
suppliers to ensure we are only provided with sustainable
timber. We plan to now audit compliance and ask all
suppliers to provide evidence of sustainability certification
for either Forest Stewardship Council (FSC), Programme for
the Endorsement of Forest Certification (PEFC) or Category
B standard.
Within our office environment we have been working
with our stationery provider to switch to more sustainable
products. All photocopier/printer paper and letterhead are
now on fully recycled paper stock, and we are investigating
whether our envelopes and compliment slips can be
switched. The remainder of our stationery items have been
switched to ‘products with purpose’ through our central office
supply company – ‘products with purpose’ are office products
that have been assessed as both sustainable and ethical.
Target Progress Performance
Headline
75% of top 100 suppliers with GOLD Supply Chain
Sustainability School (SCSS) membership by
July 2023.
63 of our suppliers are members of SCSS, 25% of which are
GOLD members.
Deliver a material reduction in single use plastic
packaging in our top ten suppliers of 25% by
July 2023.
Supply chain partners already moving away from plastic.
Figures to be reported in FY23.
Complete modern slavery compliance audit of a
sample of large subcontractors by July 2022 and
address any non-compliance issues.
Five modern slavery audits at site level have been undertaken.
Review and trial new waste reduction procedures
in supply chain by FY23.
Work on-going with our supply chain partners with best
practice guidance being prepared along with a new waste
awareness campaign.
a The Economic Footprint of House Building in England and Wales (July 2018), prepared for
the HBF by Lichfield’s.
Better with Bellway Strategy and Priorities continued
Sustainable Supply Chain
Driving sustainability through long-term partnerships
Strategic Report
56 Bellway p.l.c. Annual Report and Accounts 2022
Ethics
We use our Responsible Sourcing Policy to select partners
and to monitor their performance and compliance with
agreed standards. As well as this, we work with partners to
address any issues of non-compliance identified and reserve
the right to end relationships as a last resort. 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. Through internal reviews we deem that our
subcontracted supply chain contains the greatest potential
risks of modern slavery and this year we have begun a series
of site based audits focused on our subcontracted workers
and compliance with our modern slavery procedures.
The decision was made to focus audits at a site level to
target the geographic regions deemed most likely to be
affected by modern slavery and reach a greatest number
of subcontractors.
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.
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.
Headline KPIs
Headline KPIs 2022
75% of top 100 key suppliers
will be GOLD members of the
Supply Chain Sustainability
School (SCSS) by July 2023
63 of our suppliers are
membersof SCSS, 25% of
whichare GOLDmember
Bellway actively support our supply chain to become
more sustainable. Through supply chain meetings
we have discovered what our suppliers are doing to
achieve their own targets to become more sustainable,
which will reduce our carbon footprint.
We also encourage our supply chain partners to
engage with the Supply Chain Sustainability School
who provide workshops, seminars, and various learning
materials to improve and share best practice on
sustainable and environmental issues.
One of our suppliers has reduced plastic packaging by
6.4 tonnes (equivalent of 500,000 plastic bottles and
19.2 tonnes of CO
2
). They now package their products
in cardboard and eco-friendly paper tape, while trialling
paper bag packaging.
Supply chain case study
57Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Better with Bellway Strategy and Priorities continued
We have an environmental and fiscal
responsibility to manage our resources
effectively and efficiently. In all areas of the
company, we aim to minimise waste (measured
in tonnes per home built) and, where waste
is unavoidable, reuse and recycle as much as
possible. Our new Better with Bellway strategy
will help us to achieve or surpass our waste
reduction goals in the years to come.
Reducing and reusing
We are undertaking work with our supply chain partners
to reduce packaging and have asked them to investigate
reusable alternatives to single-use packaging as well as
ensuring where plastic packaging is unavoidable, they use
a minimum of 30% recycled content. We have sustained
our drive on reuse, recycling and diversion processes on
our sites, and have again improved our waste diversion rate
for the eighth year, reaching 99.5% in 2022 (2021 – 99.4%).
Our partnership with Community Wood Recycling, a network
of social enterprises that collects and reuses waste wood,
rescued 854 tonnes of wood from the waste stream.
We have continued our focus on reducing waste generated
on our construction sites. After successfully reducing waste
per unit to 8.9 tonnes last year, further improvement has
slowed, reaching 8.3 tonnes per unit in 2022 and renewed
focus will be given to reusing rubble waste on site in 2023
to drive improvements towards our 7.1 tonnes per unit target.
Waste is now to be included as part of the procurement visits
to divisions and a new waste awareness guide and onsite
training will be rolled out to all sites in FY23.
Water
Bellway is not a large user of water, either in our offices or in
the construction process. However, with the emerging climate
change trends in the UK placing more regions under water
stress, as a sustainable builder we are looking at ways in
which we can reduce usage, both in our own operation and
for our customers.
We have determined our FY21 baseline water consumption
as 301.8m
3
per 1000m
2
of completed homes and we are
investigating ways in which we can reduce this usage (against
FY21) by 2025. We have continued to adapt the designs of
our homes to be more water efficient and have successfully
delivered on our target to build 100% of new homes to the 115
litres per person per day water standard in 2022.
Timber frame
We are continuing to expand our use of timber frame
construction methods. Five sites are already under
construction in the North East division with a total of 543
plots, and in FY23 we aim to have 100% of new sites in that
division switched to timber frame. Not only dœs timber frame
bring embodied carbon benefits, but it also reduced reliance
on traditional brick and block construction methods, with a
resulting saving in materials .
Headline KPIs
Headline KPIs 2022 2021
Reduce waste per completed
unit by 20% by July 2025
(achieving 7.1 tonnes of waste
per completed unit).
8.3 tonnes 8.9 tonnes
Target Progress Performance
Headline
Reduce waste per completed unit by 20% by
July 2025 (achieving 7.1 tonnes of waste per
completed unit).
FY22 performance is at 8.3 tonnes.
Achieve landfill diversion rate above 99% year-
on-year.
FY22 performance at 99.5%.
Reduce construction site water usage (measured
in m
3
of water per 1000 m
2
of completed homes)
against a base year of FY21 by July 2025.
Research and review of multiple solution options is ongoing.
FY21 baseline set as 301.8 m
3
/10000 m
2
of completed homes.
20% of homes commenced by July 2024 to be
intimber frame.
Timber frame expanded to our North East division – in FY22
8% of plots were completed in timber frame (2021 – 7%).
100% new homes meeting the ‘115 litres per
person per day’ standard by July 2022.
All homes and apartments now meet and exceed our 115 litres
per person per day standard.
Resource Efficiency
Designing out waste by building better
Strategic Report
58 Bellway p.l.c. Annual Report and Accounts 2022
Bellway Wales division, who were previously using 8 – 14
yard skips, now put their main waste streams into four
main categories: brick and block, timber, plasterboard and
mixed use.
The team then worked on how they could separate
materials at source, prior to placing it into skips. A colour-
coded skip policy for each of the waste streams was
introduced for each waste stream category to maximise
diversional potential and reduce costs.
Brick and block are crushed and reprocessed on-site,
avoiding any disposal costs and achieving 100% recycling.
They are now able to achieve 100% recycling of timber
and plasterboards – timber is collected by Community
Wood Recycling Services. Drylining contractors are now
responsible for removing their own waste into a closed top
plasterboard skip. The only skip that is now supplied is for
mixed use/ light waste and this generally achieves 99.5%
diversion from landfill.
Waste Diversion from landfill – Bellway Wales
Brick & block
waste
Blue tipping skips
15
per site
Bricklayer to utilise 1T
bulk bags on scaffold for
lightweight waste such
as insulation etc.
Red tipping skips
5
per site
Green tipping skips
5
per site
Orange tipping skips
5
per site
Plasterboard
waste
Timber
waste
General/mixed
waste
99.5%
Diversion rate from landfill
100%
of timber and plasterboards recycled
59Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
On each of our developments, we aim to mitigate
our impact on the environment through a range
of actions, including flood impact assessments,
ecology surveys, biodiversity mitigation, and
environmental impact assessments.
Sustainability
Our communities are built with the intention of maintaining
and protecting the local environment as much as possible.
As the availability of suitable land changes over the years,
the proportion of greenfield sites has increased, but we still
developed 39.3% of our new homes in 2022 on brownfield
sites (2021 – 36.8%), helping to regenerate local areas.
No matter the development, we want to offset the effect
we have on the environment. To do this, we carry out a
comprehensive range of risk assessments and surveys,
covering local ecology, flood impact, and much more.
Biodiversity
Bellway already addresses biodiversity needs in our new
developments, with Sustainable Drainage Systems (‘SuDS’)
implemented on 255 of our developments (2021 – 255),
mimicking natural drainage processes to reduce flooding
and pollution and providing an additional habitat for wildlife.
In addition, 137 developments included a biodiversity plan
(2021 – 147) and we planted over 15,800 trees (2021 – 17,200).
Biodiversity net gain (BNG) is a new obligation that will
require housebuilders to improve the biodiversity of land by
at least 10% compared to the baseline prior to development.
This requirement is likely to come into effect for planning
applications from November 2023, and at Bellway we are
aiming to ensure that all planning applications submitted from
July 2023 onwards are BNG compliant.
This is a significant development for Bellway and our strategic
land teams have already been formulating our strategies to
meet this requirement. We have established a biodiversity
baseline for all existing Bellway owned land and we have
appointed a new role of Group Head of Biodiversity who
will lead on all BNG activity. BNG champions have been
appointed in each division and we have established BNG
protocols for site acquisitions and management, with a
BNG section added to land packs. We aim to deliver on the
BNG requirements through a combination of on-site and
off-site enhancements, with the potential to add purchased
biodiversity credits.
Target Progress Performance
Headline
Achieve 10% biodiversity ‘net gain’ (BNG)
in all new sites submitted for planning from
FY23 onwards.
Our central land team are taking the lead and progress is
detailed below.
Establish 1 Tiny Forest site by July 2022. Tiny Forest planted Ponteland (Northumberland).
All new development sites to incorporate
hedgehog highways by July 2022.
Divisions to install on all new developments from 1st
August 2022.
Investigate a tree planting programme for every
home sold by July 2023.
Working with consultants and third party organisations to
understand the best way to deliver this in conjunction with net
gain requirements.
Better with Bellway Strategy and Priorities continued
Biodiversity
Protecting and preserving nature
Strategic Report
60 Bellway p.l.c. Annual Report and Accounts 2022
This year, volunteers from the Group Office teamed up
with Earthwatch to create a ‘Tiny Forest’ on land we
own in Ponteland. A Tiny Forest is a dense, fast growing,
native woodland about the size of a tennis court.
They are not only an attractive location for wildlife, but
for people as well, and can provide a range of benefits
in the fight against climate change.
The Tiny Forest is planted using a technique developed
by Japanese botanist Akira Miyawaki. It consists of a
dense mix of 600 trees and shrubs native to this area of
the UK. When mature, the Tiny Forest has the potential
to provide natural habitat to over 500 animal and plant
species within the first three years.
It is one of many environmental and sustainability
projects Bellway is undertaking across the UK to help
fight global climate change.
600
trees and shrubs
500
potential new natural habitats
Creating habitats for over 500 animal and
plant species with Tiny Forests
Helping our customers
As part of the drive to improve our sustainability offering
to customers, we have developed a green welcome pack.
New homeowners will now receive a pack that includes a
bird box, bee bomb and garden trowel, along with advice
on how they can cultivate a nature friendly garden. The pack
also contains tea, coffee and biscuits, and families with
children will have the addition of a colouring story book
encouraging children to understand how they can be more
environmentally aware in a fun way.
We will also incorporate hedgehog highways into all new
developments from 1st August 2022. One of the main reasons
why hedgehogs are declining in Britain is because our
fences and walls are blocking their natural foraging paths,
often forcing them onto roads where they are often killed.
The ‘highways’ allow hedgehogs to safely travel across our
developments (from garden to garden) as they search for
food and a mate, and the presence of hedgehogs helps
maintain a healthy ecosystem as they work to control insect
populations – including keeping gardens healthy.
Partnership working
Towards the end of this year, we started working on
establishing a partnership with The Rivers Trust, conservation
experts who work with members to preserve wild, healthy,
natural rivers, which work as part of an integrated ecosystem.
Our initial work with The Rivers Trust will be around
volunteering opportunities, with Bellway staff across our 22
divisions supporting the work of the local trusts around the
country. As the partnership develops in the future, we plan
to expand our work to include engagement on Bellway’s
sustainability objectives, and selected national policy
processes in England and to explore the development of an
approach to BNG and nutrient balancing.
Headline KPIs
Biodiversity is a key component of our sustainable approach,
and we continue to work to minimise our impact on
biodiversity. We aim to achieve a 10% biodiversity net gain on
all new sites submitted for planning from FY23, we will start
reporting on this KPI from FY23.
61Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Charitable engagement is a key part of the
Bellway ethos, going back to our initial charitable
partnerships in 2015, and we are proud of our
work so far. Our commitment to helping others
is only going to grow and we are dedicated to
widening the range of our charitable activities as
well as increasing our fundraising totals.
Maintaining key partnerships
2020 and 2021 have been difficult periods for the charitable
sector, with COVID-19 restrictions severely impacting on
donation revenue whilst demand for their services was
increasing. We are proud that throughout this difficult period
we have continued to increase charitable donations year-
on-year.
Cancer Research UK (CRUK) has been Bellway’s national
charity partner since 2016 and our relationship with this
key charity continues to go from strength to strength.
We extended the partnership in August 2021 for a further
two and a half years as part of our ‘3 4 23’ campaign with the
aim of increasing our fundraising and donations to CRUK to
£3 million by the end of 2023.
Engagement with employees, subcontractors and suppliers
has remained strong while large scale fundraising activities
were difficult in 2020 and early 2021 due to COVID-19
restrictions. However, since August 2021 everyone connected
with Bellway has embraced the new ‘3 4 23’ campaign and
restarted fundraising with great energy and determination.
In total FY22 has seen £607,898 (2021 – £351,157) raised and
donated to CRUK, the highest annual total so far of our six-
year partnership. £130,829 has been raised by employees
(2021 – £70,323), with another £168,442 from subcontractors
and suppliers (2021 - £23,380), Bellway’s double matching
ofemployee fundraising added a further £308,848
(2021 – £145,650). This brings our six-year total to
£2.56 million, well onour way to our £3 million target with
18 months remaining.
CRUK is not the sole focus of our charitable activity, and we
continue to support a range of local charities, causes and
community groups in the areas where we develop, including
corporate donations as well as employee fundraising for
causes close to their heart. Non-CRUK employee fundraising
came to £123,435 this year, with Bellway ‘matching’
employees’ fundraising efforts. This includes payroll giving
for which we introduced matching for this year. In total,
across all our charitable activities, Bellway, our employees,
subcontractors, and suppliers have raised and donated a total
of £899,467 (2021 - £520,413) of which £422,816 was raised
by our employees, subcontractors, and suppliers, (2021 -
£128,413).
Target Progress Performance
Headline
Raise £3m for Cancer Research UK by the end of
December 2023.
£607,898 raised and donated in 2022, bringing our total to-date
to £2.56 million.
All office based staff to be given the opportunity
to complete a volunteering day by July
2023, with 1 day per FTE per year donated to
volunteering activities by July 2027.
Volunteering policy is being finalised for FY23 launch.
Establish at least 1 partnership with a charity
supporting disability/disadvantaged individuals
with a view of providing work placements by
July 2023.
Preferred charity partner identified. Partnership to be launched
in FY23.
Implement a programme of employee benefits
roadshows and increase payroll giving donations
against FY21 by December 2022.
Benefits roadshows planned for FY23 which will
incorporatepayroll giving. FY22 payroll giving total
of£104.4K(2021 – £16.6K).
Charitable Engagement
Giving, to build better lives
Better with Bellway Strategy and Priorities continued
Strategic Report
62 Bellway p.l.c. Annual Report and Accounts 2022
Help raise £3million for 2023
In support of our Better with Bellway target to raise
£3 million for Cancer Research UK by the end of 2023,
we held our first ever National Charity Day on 16 June.
Teams from across our 22 divisions and Head Office
took part in virtual escape rooms, sports days and
sponsored walks, as well as raffles with amazing prizes
and plenty more activities, to raise as much cash as
possible. The total raised across the Group was an
incredible £24,658 – with Bellway’s double matching
taking the grand total to just over £72,500.
Our divisions were also given the opportunity to take
part in a day of volunteering throughout the month of
June. A team from Bellway North East spent some time
with 4Louis in Sunderland, a charity which supports
families through miscarriage, stillbirth and child loss.
National Charity Day
Homelessness support
We continue to investigate new opportunities to give
something back to communities where we develop.
One example of this is a burgeoning partnership with Great
Change, a non-profit organisation who help individuals to
break the cycle of homelessness, providing additional support
that would fall outside the remit of social services. In total,
15 Bellway divisions made donations to Greater Change,
matched by Bellway Head Office, to provide direct support
to at least one individual who was homeless per division.
The partnership with Greater Change is in its early stages, but
the donations have already brought real, tangible benefits to
people’s lives. In Leicester, a man who had been homeless
for years has been provided with appliances for his temporary
flat so his children can visit. In Essex, the money has helped
awoman secure a social housing tenancy.
In addition to the Greater Change partnership, our Yorkshire
division have supported The Hull Homeless Community
Project which provides a support network for rough sleepers
in Hull. Our South West division has supported the Help
Bristol’s Homeless charity to assist its work to get people into
safe and stable accommodation, and from there to improve
their lives and reach their potential.
New partnerships
While Bellway staff have often undertaken volunteering
on an informal ad hoc basis, we have decided to formalise
arrangements and introduce a Staff Volunteering Policy and
scheme in the coming year. The aim is to have all office-
based staff given the opportunity to volunteer a day of their
time in FY23 and reach 1 volunteering day per FTE by FY27.
As part of our emerging partnership with The Rivers Trust,
we aim to have at least one volunteering event per division
across the various local rivers trusts organisations in England,
Scotland and Wales. Not only will this deliver a much needed
resource for The Rivers Trust, it will also provide extensive
team building opportunities for Bellway divisions.
As part of our Better with Bellway strategy, we are
investigating opportunities to partner with charities that
support disabled and disadvantaged individuals. The aim will
be to initially offer work placements within Bellway, with the
view of progressing to offers of permanent employment as
the partnership progresses.
Headline KPIs
Headline KPIs 2022 2021
Raise £3m for Cancer Research
UK by December2023
£2.56m £1.95m
63Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Better with Bellway Strategy and Priorities continued
Bellway’s ‘The Future Home’ is being
built at The University of Salford’s leading
net-zero research facility Energy House
2.0 that has been part funded by the
European Regional Development Fund.
The house will test innovations in
building materials, the effects of double
and triple glazing, storing solar energy,
recovering heat from wastewater, and
how to make most efficient use of air
source heat pumps.
Each of these elements will be
monitored in both regular and extreme
temperatures, with varying weather
conditions simulated inside the specially
built chamber.
The results of this project have the
potential to change how Bellway build
homes and how our customers live
in them.
We have started building an experimental eco house called ‘The Future Home’
as part of a research project which could influence how we use our homes
in the future.
DESIGNING THE HOUSE
OF THE FUTURE
Strategic Report
64 Bellway p.l.c. Annual Report and Accounts 2022
Key Stakeholder Relationships
Customers
How we engage
Bellway has always had a strong reputation for excellent
customer service, with our face-to-face sales approach
helping thousands of our customers to purchase their
dream home every year. This approach has served us well
throughout the years, but our customers expect more from
Bellway, so we have extended our traditional approach to
improve the digital and telephony offerings to complement
what we do well. Our Customer First initiative is designed to
support this improvement and we have implemented several
new processes to support this throughout the year.
Our digital channels – website and social media – are
designed to engage homebuyers early in the customer
journey and provide them with all the information they
require to help them make an informed decision when
deciding on the location and property type that meets their
needs. This helps customers have the knowledge before they
visit the sales office.
We recognise that the customer journey, from first visiting a
site to moving into their new home, can be a long process
and our dedicated and highly trained sales advisors help
make the process of buying and moving into a new house as
smooth as possible and a positive experience.
Our face-to-face sale approach helping
thousands of our customers to purchase their
dream home every year.
Once in their new home, our dedicated Customer Care team
will deal with any post completion issues and questions
customers may have, to maintain that positive experience
throughout the early years of Bellway home ownership.
To continue the high standard of customer service our
customers expect, we encourage feedback throughout
the sales process via Trustpilot and HBF Customer
Satisfaction surveys.
Through our marketing activities, we assess and review
collected data to ensure we are engaging with our customers
and responding to their needs effectively.
Our use of social media channels involves us engaging with
customers by generating aspirational content that showcases
Bellway’s products and uses customer case studies and
testimonials to bring this to life.
Our new Better with Bellway strategy will help customers
by building new homes to Future Homes Standards, and
will develop desirable communities with sustainability at the
heart of what we build. This will bring benefit to customers by
providing energy efficient homes meeting, or where possible
exceeding, the standards required. Bellway is undertaking
customer trials across the country to inform this strategy and
we will be using customer feedback to help us identify the
technologies and innovations that best meet our customer
needs as a result.
For customers who live in legacy Bellway built properties
which do not meet new standards for fire safety, Bellway
have introduced a dedicated Building Safety Division that
communicates directly with building owners, managing
agents, customers and other key stakeholders in helping to
remediate life-critical fire safety issues in high, and medium-
rise buildings. The team also ensures compliance with our
new fire policy. The Executive Management Team provide
oversight of this division.
Key issues raised
• Customer service
• Digital adoption
• Sustainability and efficiency of homes
• Build quality
• Innovation
• Legacy building safety improvements
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 65 to 74 we set out how we have engaged with various stakeholders during the year, the key issues raised
and outcomes
65Bellway p.l.c. Annual Report and Accounts 2022
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Key Stakeholder Relationships continued
Outcomes
We have retained our 5-star
6
homebuilder
status in the
national HBF awards for the sixth consecutive year, reflecting
our commitment to delivering exceptional quality and service
as standard to our customers, throughout their whole journey
with Bellway.
Nine out of 10 customers would recommend Bellway to
a friend. Our score of 93.6% in the Recommend a Friend
category was the highest score achieved by Bellway since
commencement of the HBF Survey scheme in 2007.
HBF Survey scheme:
‘Recommend a Friend’ category
93.6%
We have recognised that customer satisfaction in the
9-month survey has historically been lower in this survey
period and our Customer First initiative has been addressing
this directly. Our current Recommend a Friend score of 82.1%
reflects our efforts in this regard, delivering a year-on-year
improvement of 2.2 ppt when compared to our 9-month
Recommend a Friend score of 79.9% in 2021.
We continue to build on this improvement to achieve our
aspiration of achieving 90% customer satisfaction in the
9 month Recommend a Friend category by 2026.
Customer First is designed to help achieve this aspiration
with a focus on improvements to 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. To help
us achieve this, the Group appointed a Customer Experience
Director who has worked with some of the UKs largest brands
and whose role is to help deliver the improvements through
our Customer First initiative.
Driving our Artisan Collection of standard house types
through our divisional businesses helps us to work
consistently across the Group, allowing for standardised build
processes and procedure, and the sharing of best practice.
Our Watchmaker house type which is part of the Artisan Collection.
We have introduced several initiatives to help our customers
understand the complex processes undertaken. ‘Meet the
Builder’ allows our customers to meet the construction teams
who are building their homes, while our ‘pre-plaster visits’
provides customers with an opportunity to visit their new
homes during construction, so they understand how their
home is built. This allows customers to ask questions of the
construction teams and gain a greater knowledge of the
processes involved in building their home. Feedback from
customers has been extremely positive as it provides
reassurance and builds excitement during the process.
We have maintained our appointment system for sales centre
visits, which was first introduced due to COVID-19 restrictions.
This was positively received by customers as it allows us to
provide a dedicated one-to-one service as a result.
Enhancements to our customer care procedures and quality
assurance inspections have improved the build quality of our
new homes, and the aftercare we provide to our customers
following completion. We introduced unaccompanied
inspections for customers prior to their home demonstrations,
this allows them the opportunity to inspect their home in their
own time and report any defects or issues prior to moving
in. In addition, a 12-week defect period has been introduced,
where construction teams remain responsible for defect
rectification in all new homes. Our dedicated Customer
Care teams manage any issues throughout the remaining
warranty period.
We have introduced new core hours for our Customer Care
teams in line with the roll-out of a new telephony system
which has been introduced into most divisions with complete
implementation towards the end of the year. We are also
introducing tablets and digital solution for on-site teams to
report and manage customer care issues which will provide
a greater level of control and reporting for our Customer
Care teams.
Our new sustainability strategy operating under the
banner ofBetter with Bellway was launched in early 2022.
This strategy consists of eight business priority areas, one
being Customers and Communities. Outcomes from
this strategy are already being seen by our customers,
with sustainability initiatives taking place on ‘exemplar’
developments across the country and homes being built
toFuture Homes Standards.
This strategy has also seen the launch of a ‘green’
welcome pack for new homeowners, consisting of more
environmentally focused items such as bird boxes, bee
bombs and fairtrade tea and coffee. Our sustainability
message is also being rolled out to households with
children, with the inclusion of a children’s activity story book
highlighting the benefits of sustainable living using characters
Belle and Brickle to bring the message to life.
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66 Bellway p.l.c. Annual Report and Accounts 2022
As part of our Customer First initiative, we began the roll-out
of the digitalisation of our sales process with the launch of
the‘Your Bellway’ customer portal.
The portal has been launched on a trial basis across
two divisions and we expect to roll this out over the next
12 months. ‘Your Bellway’ will provide an improved level
of service to our customers, giving them another way
of interacting with us and allowing them to download
key documentation.
The second phase of the portal will allow customers to
choose additions from the comfort of their own home.
‘Your Bellway’ will provide an improved level
of service to our customers, giving them a further
way of interacting with us.
We have also enhanced our digital customer experience with
the launch of websites for our Bellway London and Ashberry
Homes brands. In addition, Bellway has also responded
to customer needs with the launch of a lifestyle website
‘Your Nest’ which provides guides and information to help
customers turn their new house into a home.
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 Customer Care
Director is a standing agenda item for all Board meetings.
As part of our continued commitment to building safety,
in April 2022, Bellway agreed a voluntary pledge with the
Department for Levelling Up, Housing and Communities
(DLUHC) in relation to historical fire safety issues on buildings
where Bellway has played a role in their development.
Bellway agrees with Government that leaseholders should
not have to pay for any costs associated with necessary life-
critical fire safety remediation work arising from the design
orconstruction of buildings they live in. We have entered
into a pledge with DLUHC that we will fund, undertake or
procure at our own cost as quickly as reasonably possible
all necessary remediation or mitigation work to address
life-critical fire safety issues arising from design, construction
or refurbishment defects on buildings above 11 metres
in England which Bellway played a role in developing
or refurbishing that have been built by the Group since
5 April 1992.
The standard of remediation will be assessed proportionately
to the standard as articulated in the PAS methodology and
other relevant industry standards to ensure that affected
buildings meet a life-critical safety standard. We will:
• Withdraw any buildings that we have played a role in
constructing from the Building Safety Fund and ACM
Funds, and reimburse any costs incurred to date by those
funds;and
• Publish the pledge on our website, and agree a process
with DLUHC for contacting building owners of buildings
falling within scope of the Pledge to agree the steps
required to meet its objectives.
In October 2022, the Group signed up to the Developers’ Pact
with the Welsh Government. Similar to the Pledge, this is a
commitment to remediate buildings over 11 metres in heights
with life-critical fire safety issues, which were constructed in
Wales since April 1992.
Our dedicated Building Safety team communicate with
customers through our Building Safety helpline, and we have
launched a dedicated Building Safety website for customers
providing guidance on what Bellway is doing to address
the issue. Our Building Safety team meet with leaseholders
and other key stakeholders in order to maintain effective
communications, and we provide regular communications
onsites where we are undertaking remediation.
From August 2022, Bellway has launched a dedicated
Building Safety Division which will operate solely to address
fire safety issues across the group and will deliver remediation
to buildings identified as part of the pledge.
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Key Stakeholder Relationships continued
Colleagues
How we engage
Becoming an Employer of Choice is one of Bellway’s main
business priorities and to be able to do this we need to
ensure that our colleagues are fully engaged in our business,
so they have the knowledge and understanding of how we
operate successfully for the benefit of all our stakeholders.
In the UK, there have been changes to working practices
following the COVID-19 pandemic, with a greater focus on
work life balance, which has meant we have had to adapt
tomeet the evolving needs and demands of our colleagues.
We measure the success of our engagement through our
annual Employee Engagement Survey, the latest ones being
in August 2021, and again in June 2022, providing us with vital
data and colleague feedback on the things that matter most
to them. The survey 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
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.
The Employee Engagement Survey gives us an annual
overview of colleague views on Bellway, but we continued
to run quarterly Employee Listening Groups with a
cross-section of colleagues from across the business.
The Employee Listening Groups allow us to present key
initiatives to colleagues and gain real time feedback on the
views of colleague representatives. The Groups also allow
senior management to gain feedback on issues raised by
colleagues. The importance of this activity is demonstrated by
the active involvement from Board level, with non-executive
directors attending some of the listening group sessions, and
the outcomes from these meetings being reported to the
Board through regular updates.
The attraction, development and retention of talent across
the business, and improving the diversity of our workforce,
remains a key priority for our Group HR team, especially at
a time when pressures are being faced across the wider
industry by the lack of skilled workforce across the sector.
We have upskilled our senior leadership team with the
introduction of the Senior Leaders Development Programme,
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. We are extending this skills training with the
launch of the CMI accredited Middle Managers Development
Programme in September 2022 to extend these capabilities
beyond the senior leadership team.
The onboarding of new colleagues who join the business
remains a priority as we ensure they have a positive
experience when joining the Group so they can be successful
in their roles and we continue to gain feedback from those
who leave in order improve where necessary.
Our focus on diversity and inclusion is another key area
under our ‘Employer of Choice’ strategic priority and we have
been working with external consultants in developing a new
Diversity and Inclusion strategy which we aim to roll-out later
in the year.
Our ‘Balance’ network group, which was launched in
May 2021 and provides an open forum to discuss matters
relating to diversity, equality and inclusion across the Group,
continues to be successful with a diverse group of colleagues
from across the business being actively involved. The network
discusses diversity issues being encountered both in Bellway
and in the wider industry, and seeks to find solutions to
improve accessibility to the industry and Bellway for minority
groups. The network is sponsored and chaired by senior
leaders within the Group.
We commit to having at least 5% of our
workforce employed in ‘earn and learn’ roles.
As an active member of ‘The 5% Club’, we commit to having
at least 5% of our workforce employed in ‘earn and learn’
roles, including apprenticeships, student placements, and
graduate roles. As part of our new strategy, we aim to have
at least 12% of our workforce in ‘earn and learn’ roles by
July 2024.
Bellway employees at the Brook View sales office in Wixam.
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68 Bellway p.l.c. Annual Report and Accounts 2022
We are placing even greater focus on health and safety by
measuring our RIDDOR rate to cover all members of staff, not
just those on our sites. Furthermore, we are using technology
to improve the reporting and analysis of any health and safety
incidents – this allows for more timely investigations and
ensures that preventative measures are introduced.
The mental health of our colleagues is also vitally important,
which is why we are increasing the ratio of mental health
first-aiders and implementing mental health wellbeing training
to raise awareness.
Our internal communications strategy remains an area of
focus for the business. Although improvements have been
made over the past two years, we are focusing on how
wecan improve communication to our harder to reach
site-based colleagues and ensure our Better with Bellway
strategic priorities are clearly articulated to colleagues.
Key issues raised
• Health, safety and wellbeing
• Flexible and agile working
• Diversity and inclusion
• Pay and benefits
• Training and development
• Career progression
• Work life balance
Outcomes
The latest Employee Engagement Survey undertaken in
June 2022 received a 74% response rate, which is 2 ppt
higher than our August 2021 survey. The engagement rate
from employees was very high at 96% and represents an
improvement on the 2020 and 2021 surveys which were
bothat 89%.
The survey results showed that there was a strong customer
focus among Bellway employees and that there were high
levels of trust and empowerment for colleagues to do their
jobs. Our colleagues told us that they know what is expected
of them in their roles and they are clear in the part they
play inhelping Bellway achieve its goals. More importantly,
Bellway colleagues told us they were prepared to go the extra
mile in doing their roles, demonstrating their commitment to
the organisation.
Overall, 95% of colleagues would recommend Bellway as
‘agreat place to work’.
Employee Engagement
Survey response rate
Colleagues who would
recommend Bellway as
‘agreat place to work’
74%
(2021 – 72%)
95%
(2021 – 89%)
Areas for improvement identified in the 2021 survey have led
to us enhancing our training and development programme.
A Senior Leadership Management Programme was launched
last year, with two cohorts of senior leaders undertaking this
programme. Further to this, we are introducing a new Middle-
Managers Management Programme with the first cohort
beginning in Autumn 2022.
We have launched a monthly Health & Safety newsletter for
all staff to provide advice and guidance on key health and
safety issues and have used this to demonstrate the success
of our new Near Miss Reporting Policy by highlighting near
misses on a monthly basis to educate colleagues.
Following the full reopening of our offices after the end
of COVID-19 restrictions, we have introduced our new
permanent Agile Working Policy and Flexible Working Policy
which have been introduced across the Group to support
colleagues in balancing their work and personal lives.
Further enhancements to this policy are being considered
aspart of the feedback from our latest survey, where work-life
balance remained a key area of concern for our colleagues.
We introduced our new permanent Agile
Working Policy and Flexible Working Policy
which have been introduced across the Group
tosupport colleagues in balancing their work
and personal lives.
Bellway has been voted a Top 100 Apprenticeship Employer
for 2022 by the Department for Education. Our Apprenticeship
Programme currently has 154 apprentices working across
the business in a range of different roles, so this accolade
demonstrates our commitment to employing apprentices
across the business.
Ben Elliot, Apprentice Plumber at Houlton Meadows in Rugby.
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Key Stakeholder Relationships continued
Investors
How we engage
As a FTSE 250 publicly listed company, we have a duty to
provide our equity and debt investors 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.
As part of reporting on our performance, through interim
results, preliminary results and regular trading updates,
our Executive Management Team regularly meets and
communicates with major shareholders and analysts,
including at formal presentations at least twice a year.
This ensures that investors have access to the progress of
the business.
As well as providing regular marketing updates to our
investors, we also use traditional media channels and hold
calls with key journalists to ensure our principal messages are
understood by the wider market, prospective shareholders
and investors. At key points around interim and preliminary
results, we also communicate directly with our colleagues as
many are also investors in the business.
Our relationships with institutional investors, prospective
investors and market analysts allow them to raise issues with
us or seek information, primarily when we are issuing results
to the City.
Following financial announcements, our Board of Directors
receive updates from our brokers and PR consultancies,
providing feedback from investors and analysts which can
be used to help us understand how our strategy is being
received by investors and analysts.
We respond to investor communications whenever possible
to build upon their understanding of our business strategy,
orto address any concerns they may have raised.
We have engaged with key stakeholders, and took investor
views on board, in developing our new Better with Bellway
sustainability strategy while working with external sustainability
consultants to ensure the strategy is aligned with industry best
practices and to meet expectations for Environment, Social
and Governance (ESG) reporting.
In addition, over the past 12 months, we engaged with
institutional investors, analysts and shareholders in relation
to legal building safety, particularly the voluntary Pledge
undertaken to remediate buildings dating back to April 1992
which Bellway built, where life-critical fire safety issues have
been identified.
Our Chair and Senior Independent Director are both 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.
Gavin Jago – Group IR Director.
Key issues raised
• Environment, social and governance (ESG)
• Remuneration policies
• Market conditions e.g. mortgage market, supply and
labour supply chain, impact of conflict in Ukraine,
affordability of homes, and land market
• Dividend Policy
• Customer care and build quality
• Building safety voluntary ‘pledge’ with Government
• Future Homes Standards
Outcomes
Investor and media engagement around interim and
preliminary results and regular trading updates allows us
to provide additional information and clarity on the key
points raised during those updates. Where necessary, we
ensure that where greater clarity is required, it is adopted
for future updates in order to make sure we are meeting
shareholder needs.
We have proactively communicated our Better with Bellway
sustainability strategy to investors as part of our interim
and preliminary results announcements and had ongoing
dialogue with interested investors. Feedback on the strategy
has been positive as investors see our ambitions not only to
fulfil our ESG obligations, but also to become industry leaders
in the three flagship priorities: Customers and Communities;
Carbon Reductions and Employer of Choice. The strategy
was launched with a dedicated website which provides a
high level overview of the strategy, our priorities and our key
targets for measuring success.
We use investor feedback on our Annual Report and
Accounts to provide greater transparency and clarity on the
performance of our business.
We have proactively communicated with major shareholders
on our response to legacy building safety to provide oversight
of Bellway’s proactive and responsible response to the issue.
Bellway has appointed a Group IR Director to enhance the
relationship with investors. Following the end of COVID-19
restrictions we plan to undertake more in-person activities.
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70 Bellway p.l.c. Annual Report and Accounts 2022
Partners
How we engage
Bellway’s partners are a key part of our success. Due to our
size and scale we must proactively engage with our partners
– our suppliers and subcontractors – in order to achieve
our goals. Without a positive approach to partnerships, we
wouldn’t be able to produce the thousands of homes we
build every year.
Our dedicated Group Commercial relationship management
team provide ongoing communications with our partners,
and this is also supported at a divisional level. Bellway is
proud that many of our suppliers and subcontractors have
been working with us for a long-time and it is these long-term
relationships that have contributed to the success of both
Bellway and our partners.
Bellway’s scale and size means we can react to some of
the challenges that face the construction sector, with price
inflation, supply chain management and labour issues all
placing strain on the industry. These are exacerbated by
theongoing worldwide impact of the COVID-19 pandemic,
Brexit and the war in Ukraine.
It is during challenging times that our partnership
engagement approach comes to fruition as we can flex our
approach to mutually address the challenges being faced
byall parties to find a suitable outcome. By working together,
we have been able to successfully manage any issues that
have arisen.
Our long-term working relationships with reputable
subcontractors ensure that we can maintain the availability
and quality of materials and labour. We work closely with
subcontractors to ensure health and safety on construction
sites is a priority and any risks are identified and managed
effectively. Where health and safety standards are not being
maintained, we move quickly to address the issue, removing
subcontractors from site or addressing the issue through
educational means, such as toolbox talks.
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.
Bellway’s Group Strategic Land and Divisional Land teams
work with landowners, commercial vendors, and the public
sector to secure land opportunities in areas where we can
provide desirable homes. Sites are considered at all levels of
current planning status and funding is made available to allow
our teams to move quickly, with offers to purchase subject to
our well-established approval process and hurdle rates.
Our divisional teams have significant expertise and
knowledge of local planning policies and frameworks, this
expertise is essential in guiding challenging sites through
thelocal planning process.
We also engage with Government and private agency
partners in joint venture and partnership agreements.
We are working with key partners in the execution of our new
sustainability strategy Better with Bellway by identifying new
technologies and innovations to deliver houses that meet
Future Homes Standards from 2025.
We are partner members of the Supply Chain Sustainability
School and encourage all our materials suppliers and
manufacturers to engage with the school to promote
understanding of what they can do to reduce carbon, waste
and improve the environment.
On legacy building safety, we work with key fire safety
engineers and specialist subcontractors to ensure we are able
to identify and manage remediation projects that fall within
the government ‘Pledge’ on building safety.
Key issues raised
• Supply chain demand and price inflation
• Labour shortage
• Health and safety
• Land and planning
• Sustainability
Outcomes
Bellway’s strong personal relationships with key suppliers
and subcontractors have helped us effectively manage
the challenges being faced by the industry including post-
Brexit issues and the war in Ukraine, which is causing
global shortages in supply chains and labour. Our Group
Commercial team has worked closely with our supply chain
partners to overcome most supply issues through more
effective planning and discussion.
Our long-term relationships and commitment to our partners
and sub-contractors has allowed flexibility to adapt to
the challenges being faced by all parties. The continued
deployment across our divisions of the standard Artisan
house type range is bringing efficiencies for our suppliers and
subcontractors. This helps with longer-term forecasting and
planning, allowing us to agree longer lead times for products
or be more flexible in distribution options.
Respect for our long-term relationships within our supply
chain means we can help our suppliers and manufacturers
address any short-term issues in the knowledge that they will
continue to support us beyond the current market challenges.
Our continued focus on health and safety on our
construction sites is vitally important for the health and
wellbeing of all our partners and subcontractors. Our ongoing
education and enforcement activity means that our RIDDOR
levels remain consistent with pre-COVID-19 levels.
Our land and planning expertise continues to be important
in delivering new land opportunities and successful planning
applications for new sites. Our work with 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 legacy building safety, we are working closely with
specialist fire safety experts on remediation projects.
71Bellway p.l.c. Annual Report and Accounts 2022
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Key Stakeholder Relationships continued
Communities
How we engage
Building homes to be proud of and creating new
developments which create attractive and desirable
communities is a vital part of our strategy. Our community
involvement extends far beyond the sites in which we
develop. The investment we make into local communities
creates skilled jobs, providing employment to the thousands
of subcontractors who work with us. It also provides
infrastructure improvements, regeneration, and wider
economic benefits that new homes deliver.
During our engagement in the planning process for new
developments, we undertake consultation with local
communities as part of the public engagement policies of
local authorities. By doing this, through direct and indirect
communications, holding public meetings and exhibitions,
we can share our proposals with communities, and where
possible, we will amend proposals if there is a need to
address concerns.
Our local PR and digital marketing strategies help us
showcase the benefit of our developments to all stakeholders
and we use these channels to also highlight the work we
do with local communities, for local charities, schools and
other organisations.
School children with their safety posters at Wellfield Rise, Wingate.
Through Section 106 (England and Wales) and Section 75
(Scotland) contributions, Community Infrastructure Levies,
and affordable housing contributions, we invest significant
resources into the communities where we develop. This is
an important contribution to improve education, healthcare
and sports facilities and improve local transport networks.
In addition, our contribution to improving recreational space
for communities through our funding and through the design
of our sites provides additional benefit to the community, as
well as to homebuyers on our developments.
We operate the Considerate Construction Scheme on sites
where appropriate as we understand the impact construction
has on communities. Despite our best endeavours,
construction is disruptive, noisy and often dirty but we make
every effort to limit the impact on local communities and
we work with local stakeholders to address concerns when
they arise.
As part of our new Better with Bellway sustainability strategy,
we are enhancing our work with local communities by
increasing our involvement in sustainability activities
with them, and we will continue to work with national,
regional and local charities and community organisations.
Our colleagues fundraise for local events but also provide
benefit in kind to organisations, through the donation
of supplies or labour. The Group matches donations,
recognising the charitable contributions of our colleagues.
Our national charity partnership with Cancer Research UK
(CRUK) is now in its sixth year, with fundraising taking place
across our 22 divisions and Group, involving colleagues,
suppliers, subcontractors, and professional advisors. Our aim
is to raise £3m for the charity by the end of 2023 and we are
well on the way to achieving this ambition.
We also run local programmes involving schools and
other community organisations, which demonstrates our
commitment to local communities. This year we have
launched our schools programme, with divisions working
with local schools to promote construction as a career.
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
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72 Bellway p.l.c. Annual Report and Accounts 2022
Outcomes
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 11,198 housing completions this year, 18% (2021 – 22%)
were sold to affordable housing providers, providing much
needed affordable homes in communities throughout the UK.
We sold 13% (2021 – 7%) of our new homes to unassisted
first-time buyers while 22% (2021 – 39%) were purchased
by customers using Help-to-Buy. Overall, 34% (2021 – 28%)
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
Houses purchased by
unassisted first-time buyers
18%
(2021: 22%)
13%
(2021: 7%)
Homes purchased by
customers using
Help-to-Buyschemes
Homes purchased by
first-timebuyers
22%
(2021: 39%)
34%
(2021: 28%)
We have a proven track record of responding to local
community queries relating to planning applications
and meeting community needs in the process. In 2022
we contributed £117.2 million (2021 – £71.3 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 29,300 and 34,800 direct and indirect jobs were
supported by Bellway in the past year.
Direct and indirect jobs supported by Bellway
29,300 – 34,800
Following COVID-19, our fundraising activities have increased,
with us holding our first national charity day across the Group
where all colleagues helped raise money for CRUK.
Our relationship with Cancer Research UK has raised a
total of £2.56 million for the charity over the lifetime of our
partnership, well on the way to achieving our target of
£3 million by the end of 2023.
During the year, our divisions have continued to work with
local charitable and community organisations. A further
£123,435 has been raised for these organisations but our
contribution gœs 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 building materials
where they are needed.
Total raised for Cancer
Research UK
Raised for local charitable and
community organisations
£2.56m £123k
Our new schools engagement programme was rolled out
in 2022 as part of our new Better with Bellway sustainability
programme. So far, our 22 divisions have linked up with over
500 schools to run programmes designed to attract young
people to consider a career in construction.
As part of our sustainability strategy, Bellway has teamed
up with the environmental charity Earthwatch to trial Tiny
Forests, on and near developments. The first of these trials
started near to Bellway’s Head Office in Newcastle-upon-
Tyne. Volunteers from Head Office came along to the first
Tiny Forest Tree Planting Day, along with groups from local
schools, to plant 600 saplings using 18 different species of
trees, creating a natural habitat for wildlife which is open for
the enjoyment of the public.
Tiny Forest biodiversity trial
600
saplings planted
The Goldsmith show home at Woodland Rise, Hartshorne.
73Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Key Stakeholder Relationships continued
Government and regulators
How we engage
Bellway is apolitical as it has no political affiliations and makes
no donations to any political party, causes or campaigns.
However, our relationship with central and local government
is an important one, given the UK’s housing requirements and
the part we play in delivering this.
The Government’s ‘levelling-up agenda’ and the importance
of housing development in the health of the economy means
it is vitally important we engage with key stakeholders in
central and local government. Bellway often engages through
industry representative bodies on key issues facing the
housebuilding sector, for example, building safety. It is through
these groups where collective industry positioning is agreed.
Central, devolved, and local government policy in England,
Scotland and Wales has a significant impact on the operation
of our business, with planning and monetary policy all
impacting the supply and demand for housing in the UK.
We work collaboratively with local authorities and other key
statutory bodies to ensure developments are brought forward
to meet the local housing need. Our contributions tothe
public purse, through Section 106 (England and Wales) and
Section 75 (Scotland) payments help address the wider needs
of local communities. These contributions are used forkey
infrastructure projects to reflect the increase in demand
as a result of new homes being built, with roads, schools,
doctors and other schemes bringing additional benefits to
thecommunities in which we build.
Bellway engages at a strategic level with senior officials within
the Department for Levelling Up, Housing and Communities
(DLUHC), HM Treasury and The Cabinet Office to address
the pressing issues of accelerating housing delivery, building
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 where
necessary. We also regularly communicate with MPs, MSPs
and Welsh Assembly members in dealing with local issues
relating to constituency matters.
Homes England, the Government’s housing accelerator
body, is an important partner as we work with them to
meet the housing needs. We work closely on their public
land and housing investment agendas. We remain one of
the main housebuilders to access the equity loan Help-to-
Buy programme, which closes at the end of October 2022,
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.
Since 2010, the Consumer Code for Home Builders has set
mandatory requirements that housebuilders must meet in the
marketing and selling of new homes, as well as in their after-
sales customer service. However, a new independent body,
The New Homes Quality Board (NHQB), recently published
the New Homes Quality Code (NHQC), which will become
the industry code of practice for all registered builders.
Bellway registered with the NHQB in February 2022, and
activated our membership in October 2022. Post October,
customers who reserve a new home will benefit from the
protection of the NHQC and the New Homes Ombudsman
Service (NHOS). All others will remain subject to the terms of
the current Consumer Code for Home Builders.
Key issues raised
• Building safety and the industry voluntary pledge to
remediate buildings
• 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.
Our centralised MP and key stakeholders communications
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 legacy
building safety and planning and construction matters, as
well as dealing with ongoing constituency matters relating
toour developments.
A New Homes Quality Code internal working group has
implemented the required changes to our policies and
practices to ensure that the business was compliant prior
to activation of our registration. Members of this group
liaised regularly with representatives from the NHQB, the
NHOS, and the HBF, to ensure our compliance with the
new requirements.
Strategic Report
74 Bellway p.l.c. Annual Report and Accounts 2022
Risk Management
Risk management framework
The Board
• Overall responsibility for risk management.
• Review, challenge and approve the risk management
framework and corresponding policy, processes and
annual risk plan.
• Review and agree risk appetite.
• Conduct a robust assessment of the emerging and
principal risks facing the Group.
• Review and challenge risk reports.
Audit Committee
• Oversee the risk management framework, policy
and processes.
• Review routine risk reports and utilise risk information
to review and approve assurance plans and priorities.
• Provide assurance over risk management to the Board.
• Monitor the progress of risk mitigating actions
and recommendations.
Group Risk Director
• Design and implement the risk management
framework and corresponding policy and processes.
• Facilitate and implement the risk management
framework, policy and processes.
• Undertake risk management activities and produce
reports in accordance with risk management policy.
Executive Management
• Review, challenge and approve the risk management
framework and corresponding policy and processes.
• Review and challenge risk information against stated
business objectives.
• Approve risk treatments and actions.
• Approve risk reports for the Board.
• Review and agree risk appetite.
Key
Reports to
Directs and monitors
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.
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 defined in our risk management framework and
corresponding policy, are set out in the diagram below:
Identify
all business
areas
Risk management process
Evaluate
severity of
risks
Treat
to bring within
risk appetite
Action
mitigate risks
(where needed)
Report
monitor risks and
report progress
of mitigation
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.
75Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Risk management process
A risk register is maintained detailing all potential risks and
our risk management processes ensure that all aspects of the
Group are considered, from strategy through to operational
execution including any specialist business areas.
The risk register is reviewed as part of our management
reporting processes, resulting in the regular assessment of
risk, 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 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 and any changes that have occurred.
Once a year, via the Audit Committee, the Board determines
whether the risk management framework is appropriately
designed and operating effectively. The Directors confirm
thatthey 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
97to 105.
Financial risk management
The Group’s financial instruments comprise cash 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 facilities, 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 2.3
times
(2,3)
(2021 – 2.7 times).
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.
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 £18.9 million (2021 – £5.9 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 £20.9 million (2021 – £39.6 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
orsubsequently and the Group dœs 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.
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 17 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.
Risk Management continued
Strategic Report
76 Bellway p.l.c. Annual Report and Accounts 2022
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, fully undrawn at year end, bear
interest based on SONIA.
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,
theterm and whether a fixed or floating interest rate
is obtained.
During the year ended 31 July 2022, 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£2.2 million (2021 – £2.7 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 macrœconomic basis, the Group
dœs 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
micrœconomic 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 2024, 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 129 and 148.
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 2026, 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-termviability
In assessing the Group’s forecasts and long-term viability,
thefollowing factors are considered:
Factor Consideration
Group’s latest
performance
This considers the trading performance
in both the year ended 31 July 2022
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.
Group’s current
financial position
This considers the latest net cash held
by the Group and the expiry date of
existing debt financing. Furthermore,
consideration is given to the land and
work-in-progress held on the balance
sheet at 31 July 2022.
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.
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
anticipated costs arising from adopting the Future Homes
Standard, which is linked to the environment and climate
change risk. The viability assessment has not been materially
affected by climate change considerations.
77Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
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.
• The quantity and timing of spend following the signing
ofthe Building Safety Pledge.
• 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 79 to 83.
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 FY23 are supported by the strong
forward order book, but marginally reduce compared to
that achieved in H1 of FY22. In the 12 months to 31 January
2024, private completions reduce by around 50%
compared to the 12 month pre-stress peak achieved in
FY22. This is followed by a gradual recovery based on the
lower base position.
• Private average selling price in H1 FY23 remains in line with
internal forecasts due to the strong order book position.
In the 12 months to 31 January 2024, 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.
• 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.
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 2022.
The output of this review considered the profitability, cash
flows and funding requirements of the Group over the period
to 31 July 2026. The assessment included an assumption that
existing debt 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 debt 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 2026.
Risk Management continued
Strategic Report
78 Bellway p.l.c. Annual Report and Accounts 2022
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
Construction resources
Shortages of building
materials and
appropriately skilled
subcontractors at
competitive prices.
• Failure to secure the
required quantity and quality
of resources causes delays
in construction, impacting
the ability to deliver volume
growth targets.
• Pricing pressures / increased
costs impact returns.
• Number of
homes sold.
• Operating profit.
• Operating margin.
• EPS.
• Gross margin.
• Customer
satisfaction score.
• Robust forecasting and
forward planning of labour and
materials requirements.
• Processes are in place to select,
appoint, manage, and build long-
term relationships with subcontractors
and suppliers.
• Review of subcontractor and
supplier performance, with regular
communications to understand their
position and any potential issues with
their own supply chain.
• Competitive rates and
prompt payment.
Economy and market
Changes in the
external environment
(including, but not
limited to, house price
inflation, interest rates,
mortgage availability,
unemployment,
Government housing
policy and post-Brexit
trade agreements)
reduce the affordability
of new homes.
• Reduced affordability has
a negative impact on
customer demand for new
homes and consequently
our ability to generate sales
at good returns.
• Number of
homes sold.
• Operating profit.
• Operating margin.
• RoCE.
• EPS.
• Gross margin.
• Customer
Satisfaction score.
• Reservation rate.
• Order book value.
• Board level monitoring of the housing
market and economic environment
alongside key business metrics,
leading to development of action
plans as necessary.
• Disciplined operating framework,
strong balance sheet and low
financial gearing.
• Product range and pricing strategy
based on regional market conditions.
• Regular engagement with industry
peers, representative bodies, and
new build mortgage lenders.
• Use of sales incentives such as
part-exchange, and Government-
backed schemes to encourage the
selling process.
• Quarterly site valuations and monthly
budget reviews based on latest
market data.
Principal Risks
79Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Risk and description Strategic relevance KPIs Mitigation
Environment and climate change
Failure to evolve
sustainable business
practices and operations
in response to climate
change, including
physical environmental
impacts and transition
risks associated
with new regulation,
reporting requirements,
and increased social /
marketexpectations.
• 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 Government
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.
• Tonnes of carbon
emissions per
legal completion.
• Percentage
of renewable
electricity.
• Tonnes of waste
per home built
• Percentage of
waste diverted
from landfill.
• Continual monitoring of new and
evolving requirements as part of our
legal and regulatory compliance
framework, including TCFD, the
Future Homes Standard and the
Environment Act.
• Climate change and carbon
reduction is a key priority under
the Group’s Better with Bellway
sustainability strategy.
• Dedicated sustainability, innovations
and biodiversity resource in place
to assess risks relating to climate
change, monitor performance and
drive improvement.
• Consultation with specialist external
advisors and subject matter experts
(e.g. sustainability consultants).
• Regular review of the design and
features of new homes, along with
construction methods and the
sustainability of materials, to increase
energy efficiency and reduce waste.
• Investment in energy-saving
measures for offices and sites,
including transition to REGO
certified electricity.
• Development of science-based
carbon reduction targets.
Health and safety
A serious health and
safety breach and/or
incident occurs.
• Failure to maintain safe
working conditions
would impact employee
wellbeing and the
creation of a positive
working environment.
• Injury to an individual whilst
at one of our business
locations could delay
construction and result
in criminal prosecution,
civil litigation, and
reputational damage.
• Number of
RIDDOR seven-day
reportable incidents
per 100,000
site operatives.
• Health and safety
incident rate.
• Number of NHBC
Pride in the
Job Awards.
• Health and safety policy and
procedures in place, supported by
Group-wide training.
• Regular visits to sites by both our
Group Health and Safety function
(independent of divisions) and
external specialist consultants to
monitor standards and performance
against health and safety policies
and legislation.
• The Board considers health and
safety matters at each meeting.
Principal Risks continued
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80 Bellway p.l.c. Annual Report and Accounts 2022
Risk and description Strategic relevance KPIs Mitigation
Human resources
Inability to attract,
recruit and retain high
quality people.
• Failure to attract and retain
people with appropriate
skills would affect our ability
to perform and deliver
our strategy and volume
growth targets.
• Employee turnover.
• Number of
graduates, trainees,
and apprentices.
• Employees who
have worked for the
Group for 10 years
or more.
• Training days
per employee.
• Senior
management
gender split.
• Percentage of staff
in earning and
learning roles.
• Employee
engagement survey
response rate.
• Continued development
of our Group HR function
and implementation of our
people strategy.
• Established human resources
programme for apprentices,
graduates, and site management.
• Monitoring of staff turnover
and analysis of feedback from
exit interviews.
• Competitive salary and benefits
packages which are regularly
reviewed and benchmarked.
• Employee engagement activities
undertaken, including an annual
survey, with results communicated to
the Board.
• Succession plans in place and key
person dependencies identified
and mitigated.
• Robust programme of training
provided to employees which is
regularly updated and refreshed.
• Senior Leaders Development
Programme completed, with Middle
Managers Programme currently
being developed.
IT and security
Failure to have suitable
IT systems in place
that are appropriately
supported and secured.
• Poor performance of our
systems would disrupt
operational activity and
impact the delivery of
our strategy.
• An IT security breach could
result in the loss of data, with
significant potential fines
and reputational damage.
• Operating profit.
• Operating margin.
• RoCE.
• EPS.
• Gross margin.
• Customer
Satisfaction score.
• Continued investment in
infrastructure and systems.
• Group-wide systems in operation
which are centrally controlled by an
in-house IT function, supported by a
specialist outsourced provider.
• IT security policy and procedures
in place with regular Group-
wide training.
• Regular review and testing of our IT
security measures, contingency plans
and policies.
• Security Committee in place.
81Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Risk and description Strategic relevance KPIs Mitigation
Land and planning
Inability to source
suitable land at
appropriate gross
margins and return on
capital employed.
Delays and complexity in
the planning process.
• Insufficient land at
appropriate margins,
onerous planning
conditions or a failure to
obtain planning approval
within appropriate
timescales would
exacerbate the challenge
of developing new homes,
restrict our ability to deliver
volume growth targets and
impact future returns.
• Number of
homes sold.
• Operating profit.
• Operating margin.
• RoCE.
• EPS.
• Gross margin.
• Number of plots
in owned and
controlled land
bank with DPP.
• Number of plots in
‘pipeline’.
• Number of plots
in strategic land
bank – positive
planning status.
• Number of plots
in strategic land
bank – longer-
term interests.
• Number of plots
acquired with DPP.
• Number of plots
converted from
medium-term
‘pipeline’.
• Continued development of our
Group Strategic Land function and
implementation of our land strategy.
• Increased investment in land and
more sites with detailed planning
permission (DPP).
• Regular review by both Group and
divisions of the quantity, location,
and planning status of land against
growth targets to ensure our land
bank supports immediate, medium-
term, and strategic requirements.
• Formal land acquisition process in
place for the appraisal and approval
of all land purchases, including
pre-purchase due diligence
and Group level challenge of
viability assumptions.
• Group and divisional planning
specialists in place to support
the securing of implementable
planning permissions.
Legal and regulatory compliance
Failure to comply
with legislation and
regulatory requirements.
• Lack of an appropriate
compliance framework and/
or compliance breaches
could incur fines, delay
business operations and
lead to re-work across
sites, which will impact our
reputation and profitability.
• Number of
homes sold.
• Operating profit.
• Operating margin.
• RoCE.
• EPS.
• Gross margin.
• In-house expertise from Group
functions such as Company
Secretariat, Legal, Health and Safety
and Technical / Design, who advise
and support divisions on legal
compliance and regulatory matters.
• Consultation with Government
agencies, specialist external legal
advisors and subject matter experts,
(e.g., fire safety engineers).
• Strengthened Group-wide
policies, guidance, and training
in place supported by externally
facilitated whistleblowing and
reporting procedures.
• Continual monitoring and review
of changes to legislation and
regulation, including Government
guidance, advice notes and sector
specific updates.
• Regular liaison with industry peers
and the HBF on compliance
requirements and matters.
Principal Risks continued
Strategic Report
82 Bellway p.l.c. Annual Report and Accounts 2022
Risk and description Strategic relevance KPIs Mitigation
Unforeseen significant event
An unforeseen significant
national or global
eventoccurs.
• The economic uncertainty
brought about by an
unforeseen significant
event, such as the COVID-19
pandemic, could materially
impact the Group’s operations
and liquidity.
• Damage to reputation
if the Group is not
perceived to be following
Government guidelines and
acting responsibly.
• We are also mindful of the
continuing conflict and
humanitarian crisis in Ukraine.
We continue to monitor the
situation, acknowledging
the potential impact on the
UK economy, supply chains
and inflation.
• NAV.
• Operating profit.
• Operating margin.
• RoCE.
• EPS.
• Total dividend per
ordinary share.
• Gross margin.
• Reservation rate.
• Order book value.
• Employee turnover.
• Strong balance sheet, low financial
gearing, committed bank loan facilities
and USPP debt which would help
ensure resilience during a recession.
• Maintenance of business resilience and
continuity plans covering offices, sites,
and IT.
• Experienced and well-established
senior management team.
• Continued investment in systems
and infrastructure to enable robust
home working.
• Monitoring of Government guidelines
(including Public Health England and
the Construction Leadership Council).
• Regular communications with
subcontractors and suppliers to
understand their position and any
potential issues with their own
supply chain.
The Group also considers any emerging risks that have the potential to impact the achievement of our strategy, but which
cannot yet be fully defined and assessed. These uncertainties are reviewed as part of our established risk management
framework, discussed regularly by management, the Audit Committee and the Board, and elevated to principal risks (either as
new risks or an extension of existing risks) when warranted.
83Bellway p.l.c. Annual Report and Accounts 2022
Strategic Report
Investing in People
Bellway wouldn’t exist without the talent and
commitment of our colleagues. We invest in our
people to ensure that they have the training and
ongoing development necessary to develop
their careers and produce work they can be
proudof.
Diversity, Inclusion
and Belonging
As a responsible employer, we are committed
to being an inclusive organisation that strives
to create a working environment that is open,
diverse, and free from all forms of prejudice
and discrimination.
Creating a safe, diverse, and inclusive environment,
as well as investing in and upskilling our workforce,
are just some of the ways we can ensure that Bellway
is an employer of choice.
Read more on page 40.
WE’RE MAKING
BETTER CHOICES
FOR OUR COLLEAGUES
84 Bellway p.l.c. Annual Report and Accounts 2022
Governance
Board of Directors and Group General
Counsel and Company Secretary
86
Chairman’s Statement on
Corporate Governance
88
Board Leadership 90
Division of Responsibilities 91
Nomination Committee Report 95
Audit Committee Report 97
Remuneration Report 106
Director’s Report 126
Independent Auditor’s Report 130
The Future of Bellway
As an active member of ‘The 5% Club’, we commit
to having at least 5% of our workforce employed in
‘earn and learn’ roles, including apprenticeships,
student placements, and graduate roles.
At least 5%
of our workforce employed in ‘earn and learn’ roles
85Bellway p.l.c. Annual Report and Accounts 2022
John Tutte
Chairman
Appointed 1 March 2022
Denise Jagger
Senior Independent
Non-Executive Director
Appointed 1 August 2013
Jason Honeyman
Group Chief Executive
Appointed 1 September 2017
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,
Member of the Finance Committee, and Member of the
Remuneration Committee
• The National Trust – Trustee, Member of Remuneration
Committee, and Member of Audit Committee
Background and experience
John was appointed to the Board on 1 March 2022 as
Non-Executive Chairman Designate, and succeeded Paul
Hampden Smith as Non-Executive Chairman and Chair of
the Nomination Committee on 1 April. He is qualified in civil
engineering and has over 40 years experience within the
industry through various senior roles at Redrow plc, including
Group Chief Executive, Executive Chairman and then Non-
executive Chairman, prior to him retiring from the Board
in 2021.
Other appointments
• Home Builders Federation – Non-executive director.
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.
Board of Directors and Group General Counsel andCompanySecretary
N* R
NR*
Jill Caseberry
Independent
Non-Executive Director
Appointed 1 October 2017
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 – Senior Independent
Director. Chair of the Remuneration Committee and a
member of the Audit and Nomination 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.
A N R A N R*
Governance
86 Bellway p.l.c. Annual Report and Accounts 2022
Sarah Whitney
Independent
Non-Executive Director
Appointed 1 September 2022
Paul Hampden Smith
Chairman
Appointed 1 August 2013
Resigned 31 March 2022
Background and experience
Sarah, a chartered accountant, was appointed to the Board as
a Non-Executive Director on 1 September 2022.
She was formerly a partner at PricewaterhouseCoopers and
held roles as Head of the Consulting & Research business
at DTZ Holdings (now Cushman & Wakefield), and then at
CBRE as an Executive Director heading the Government &
Infrastructure team.
Previously Sarah has held a Non-executive Director role at
St Modwen Properties PLC and was Chair of the Audit & Risk
Committee of The Land Restoration Trust.
Other appointments
• A non-executive director and Chair of the Audit and
Management Engagement Committees at JP Morgan Global
Growth & Income plc.
• Chair of the Supervisory Board of BBGI Global Infrastructure
S.A. and Chairman of the Nomination Committee.
• A non-executive director and member of the Audit and
Management Engagement Committees of Tritax EuroBox plc.
• Trustee and Chair of the Investment Committee of The Canal
& River Trust.
N* R
Ian McHoul
Independent
Non-Executive Director
Appointed 1 February 2018
Simon Scougall
Group General Counsel
andCompany Secretary
Appointed 1 February 2016
Keith Adey
Group Finance Director
Appointed 1 February 2012
Background and experience
Ian, a Chartered 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
• Videndum plc – Chairman.
• Young & Co’s Brewery, P.L.C. – non-executive director and
Chairman of the Audit Committee and member of the
Remuneration Committee.
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.
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.
A
Audit
Committee
Key:
N
Nomination
Committee
R
Remuneration
Committee
NR
Board Committee on Non-Executive
Directors’Remuneration
*
Denotes
Committee Chair
NR
A* N RA N R
87Bellway p.l.c. Annual Report and Accounts 2022
Governance
Chairman’s Statement on Corporate Governance
Dear Shareholder
I am delighted to have joined Bellway as Chairman and I
have been impressed with the Company’s commitment
to corporate governance which is embedded within the
business. I do however recognise we can build on these
strong foundations and we have a strategic plan to improve
corporate governance, sustainability and diversity at all levels
of the organisation.
Diversity
The Board is naturally committed to achieving long-term
success for the Group through the delivery of its strategy.
We believe a highly qualified board with directors from a
diverse background will improve corporate governance
and decision-making. 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. As part of Board
succession planning, the Nomination Committee has been
actively working on promoting diversity with the objective of
aligning Board composition with the Parker Review and The
FTSE Women’s Leaders Review recommendations. During the
year, Sarah Whitney has been appointed as Non-Executive
Director, I am therefore pleased to report that women now
make up 43% of our Board. The Board recognises that
increased ethnic diversity is necessary and continues to
actively work towards this. Our Board Diversity Policy is
available to view on our website.
Diversity extends beyond the boardroom and the Board
values diversity across the workforce. Becoming an Employer
of Choice is a flagship pillar of our Better with Bellway strategy.
(more details on pages 40 & 41). and this objective includes
becoming a more open, diverse and inclusive organisation.
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. We want to ensure that equality,
diversity and inclusion is embedded in our culture, and
reflected in our people and behaviours.
The UK construction sector has historically been a male
dominated environment and tangible change will take some
time to accomplish. We are committed to increasing the
number of females in the business, especially in senior roles,
and we continue to invest in our apprentice and graduate
schemes to bring new diverse talent into the business.
Sustainability
The Board has worked hard to set an ambitious ESG agenda,
and I am pleased to update you on the significant efforts that
have been made in this area during the year.
During the year we launched our new Better with Bellway
strategy which has sustainability at its heart and reinforces
our commitment to operating in a responsible and
ethical manner.
In 2017, the Financial Stability Board released its report on
the recommendations of the TCFD. We acknowledge the
importance of these disclosures and we are committed to
implementing the recommendations in full. This is our second
year of making TCFD disclosures, and we will continue to
refine and develop our approach. More information on TCFD
reporting can be found on page 46 to 53.
In addition, as part of our Better with Bellway strategy, we
have chosen to report against GRI, SASB and SDGs reporting
frameworks as these were identified as being most relevant
toour investors.
GRI reporting standards enable organisations to report on
their impact on the economy, environment and people.
We have chosen to report against the core option of the 2016
GRI standards, this is the first time we have reported against
the GRI standards (more detail on page 194 to 198).
SASB have produced standards to focus companies
disclosing performance on the most financially material
sustainability topics for the benefit of investors. We have
reported against the standards applicable for our industry
forthe first time this year (more detail on page 189 to 193).
There are 17 SDGs in total, and Bellway have mapped the
goals which are applicable against the new Better with
Bellway strategy (more detail on page 199).
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. The 2022 evaluation was
conducted internally with the support of the Group General
Counsel and Company Secretary.
Each Director and the Group General Counsel and
Company Secretary 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.
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.
We have strong foundations and
astrategic plan in place to improve
the diversity of the Board and the Group
as awhole.
John Tutte
Chairman
Governance
88 Bellway p.l.c. Annual Report and Accounts 2022
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:
• The Board should give consideration to its formal objectives
and regularly appraise itself against them.
• To further consider Board and Committee membership in
line with the Parker Review recommendations.
• Further promote greater interactions between senior
managers and the Board to better understand
current challenges.
The areas highlighted for improvement in last year’s internally
facilitated Board evaluation and the progress made are set out
in the table below.
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. During the year a
Group IR Director has been appointed to further enhance
this engagement.
In September 2022 myself, and the Executive Directors hosted
an in person, meet the team event at our development in
Great Dunmow, attended by institutional investors, analysts
and shareholders, with other members of the senior
management team present.
We also consulted with a number of shareholders on our
plans for Executive Director remuneration. The Board receives
regular updates from our advisers on investors’ and analysts’
feedback 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.
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 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. 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.
John Tutte
Chairman
17 October 2022
Board evaluation 2020/21 update
Action point Progress
Annual review of the crisis management protocol with a
focuson learnings.
The crisis management protocol was reviewed during
the year and has been scheduled for annual review
goingforward.
Have clarity of board objectives based on the evaluation
feedback and identify tangible actions for what will be
donedifferently.
The feedback has recognised progress but given the
recent change in board composition there is further work
to undertake.
ESG progression. The Better with Bellway strategy has been launched
during the year which includes ambitious ESG targets.
Following COVID-19, the reintroduction of Chairman
dinnersand divisional visits by Non-Executive Directors.
Chairman dinners and divisional visits by Non-Executive
Directors have been reintroduced.
Chairman and Senior Independent Director
successionplanning.
A new Chairman was appointed during the year and a
new Senior Independent Director will be announced
ahead of the AGM.
89Bellway p.l.c. Annual Report and Accounts 2022
Governance
Board Leadership
Board of Directors
Audit
Committee
Nomination
Committee
Remuneration
Committee
Board Committee on
Non-Executive Directors’
Remuneration
Divisional Boards
Head Office Senior
Management Team
Better with Bellway
Leadership Committee
Group General Counsel
and Company Secretary
Regional Chairmen
Executive Directors
Left to Right: Keith Adey Denise Jagger John Tutte Sarah Whitney Ian McHoul Jason Honeyman Jill Caseberry Simon Scougall
See pages 97 to 105. See pages 95 to 96. See pages 106 to 125. See page 94.
Governance
90 Bellway p.l.c. Annual Report and Accounts 2022
Governance
Division of Responsibilities
Statement about applying the principles
ofgoodgovernance
The Board acknowledges the importance of, and is
committed to the principle of, achieving and maintaining
ahigh standard of corporate governance and in promoting
apositive 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 seven directors
whose names, responsibilities and other details appear on
pages 86 to 87. Currently two of the directors are executive
and five 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
ofthe 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
theGroup 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 Board 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,
GroupGeneral Counsel and Company Secretary and
Regional Chairman remuneration.
• Appointing and removing Executive Directors and
succession planning.
• Serving on Board committees.
91Bellway p.l.c. Annual Report and Accounts 2022
Governance
Division of Responsibilities continued
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, land,
strategic land and planning departments.
• Supporting the Group Finance Director on the sustainability
and ESG agenda.
• Managing the Group’s external legal panel.
Better with Bellway Leadership Committee
• The Better with Bellway Leadership Committee is comprised
of Group Finance Director, Group General Counsel and
Company Secretary, Group Production Managing Director
and Group Head of Sustainability.
• Oversees the continued development of the Better with
Bellway strategy, objectives, and targets.
• Engages with the Board and key external stakeholders.
• Works with senior management across the business
to embed the Better with Bellway strategy into day to
day activities.
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 consideration when addressing Board succession.
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. Delivering volume growth.
2. Better with Bellway.
3. Value creation.
Each year we hold separate annual conferences for
the divisional Managing, Finance, Sales, Technical and
Commercial Directors and our Planning Managers which are
attended by Executive Directors or members of the Group
Office senior management team.
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.
Membership and meeting attendance
Director
Date appointed
to the Board
Number of
meetings
attended during
the year
John Tutte
(Chairman)
1 March 2022, appointed
Chairman 1 April 2022
4/4
Paul Hampden Smith
(Chairman)
1 August 2013, appointed
Chairman on 12
December 2018
Resigned 31 March 2022
5/5
Denise Jagger 1 August 2013 8/8
Jill Caseberry 1 October 2017 8/8
Ian McHoul 1 February 2018 8/8
Jason Honeyman 1 September 2017 8/8
Keith Adey 1 February 2012 8/8
Sarah Whitney 1 September 2022 0/0
The number of Committee meetings are set out in each
Committee report. There were no absences from any Board
or Committee meetings.
Governance
92 Bellway p.l.c. Annual Report and Accounts 2022
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 Chairs 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 separately visits at least one
division during the year, independent of the Executive
Directors, and reports their key findings and observations
atthe next Board meeting.
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 Group’s 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 has
concluded that the corporate culture of the Group is of a
high standard.
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
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 for FY23.
• 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.
• Receiving presentations on sustainability and approval of
corporate responsibility targets for FY23 from the Better with
Bellway Leadership Team.
• Approval of the Better with Bellway strategy.
• Approval of signing up to the Building Safety Pledge.
• Approval of the Group’s tax strategy.
• Approval of major IT expenditure.
• Approval of the Group’s insurance programme.
• Approval of the Group’s Slavery and Human Trafficking
Statement for 2021.
• Approval of the Annual Report and Accounts for 2020/21.
• Approval of the preliminary announcement, interim results
and trading updates.
• Recommending the final dividend for 2020/21 to be
approved by shareholders.
• Approval of the interim dividend for 2021/22.
• Defence document review and meeting with
corporate advisors.
• Crisis protocol review.
• Approval of HR (including Equality, Diversity and Inclusion)
KPIs.
• Receiving regular updates on legacy apartment schemes
where fire safety improvements may be required or where
works are planned or underway.
93Bellway p.l.c. Annual Report and Accounts 2022
Governance
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.
Due to the recent appointment of John Tutte as Chairman,
the annual board evaluation was moved to the September
board meeting. 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
Chairs 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
onone 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.
Division of Responsibilities continued
Governance
94 Bellway p.l.c. Annual Report and Accounts 2022
Nomination Committee Report
Composition, Succession and Evaluation
Membership and meeting attendance
Director
Date appointed to
theCommittee
Number of
meetings
attended during
theyear
John Tutte
(Chairman)
1 March 2022, appointed
Committee Chairman on
1 April 2022
1/1
Paul Hampden
Smith(Chairman)
1 August 2013, appointed
Committee Chairman
on 1 November 2018,
resigned 31 March 2022
1/1
Denise Jagger 1 August 2013 2/2
Jill Caseberry 1 October 2017 2/2
Ian McHoul 1 February 2018 2/2
Sarah Whitney 1 September 2022 0/0
Focus areas for 2021/22
• To focus on Board succession, in particular for the
Chairman and a Non-Executive Director, taking into
account the recommendations from the Parker Review and
the FTSE Women’s Leaders Review.
• To continue our work to improve diversity across the Group.
• With support from the Executive Management Team and
Group HR, to continue to develop the succession plan for
those immediately below Board level.
Focus areas for 2022/23
• To focus on Board succession, in particular for the
Senior Independent Director, taking into account the
recommendations of the FTSE Women’s Leaders Review.
• To consider expanding the number of Non-Executive
Directors appointed to the Board.
• To continue our work to improve diversity across the Group.
• With support from the Executive Management Team and
Group HR, to 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 continue
to 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
ofthe Committee.
• To consider diversity and inclusion targets for the Group.
• To carry out an annual performance evaluation of
the Committee and review the results of the Board
performance evaluation in relation to the composition
ofthe 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 2021/22
• Appointment of the Chairman. Following a rigorous
appointment process, I was appointed as Chairman
of the Board, bringing with me over 40 years of
housebuilding experience.
• The preparation for the appointment of a Non-Executive
Director to the Board in September 2022. The Committee
recognised the importance of gender and ethnic diversity
as part of the succession plan, and worked with an agency
to identify a diverse pool of candidates. The Committee will
continue to work towards increasing the diversity of the
current Board.
• Continued our work to improve diversity across the Group,
taking into account the recommendations from the Parker
Review and the FTSE Women’s Leaders Review.
• The Committee’s continued focus during the year has been
on the action plan to improve engagement and diversity
within the Group. Building on the success of the 2021
Bellway Graduate Recruitment Programme, we continue to
look for the opportunities to recruit female candidates and
candidates from an ethic minority where possible, which
helps drive diversity within Bellway and provides possible
leaders of the future.
The Committee’s continued focus during
the year has been on the action plan to
improve engagement and diversity within
the Group.
John Tutte
Chairman of the Nomination Committee
95Bellway p.l.c. Annual Report and Accounts 2022
Governance
• Planning for Board succession with regard to the
recommendations of the FCA and the Parker Review.
• Presentation from the Group HR Director on equality,
diversity and inclusion across the Group and the proposed
action plan for further improvement.
• Also during the year, the Committee continued to develop,
with support from the Executive Management Team
and Group HR Director, the succession plan for those
immediately below Board level. This exercise will look to
promote diversity and inclusion where possible.
The Committee had oversight of the following activities
undertaken by the Group General Counsel and Company
Secretary with support from the Group HR Director.
• Equality, diversity and inclusion e-learning continues to
be issued to employees and forms part of the mandatory
training a new employee must undertake. 86% of
employees have completed this training within three
months of joining Bellway.
• Introduction and implementation of a new Recruitment
Policy, to help promote diversity and inclusion across
the group.
• Supporting the development of the company’s network
‘Balance’, which was launched in May 2021 with a focus
on gender diversity and with targeted areas for progress
relating to increasing awareness around agile and
flexible working and core hours, reviewing family friendly
provisions/policies to ensure that they are competitive,
including reviewing the range of PPE to suit all genders.
• Partnering with external charities and organisations to
promote diversity and inclusion.
Asian or
AsianBritish
Black or
BlackBritish
Mixed/Multiple
Ethnicity
Other
Ethnic/Arab
White British/
European/
Non-European
Any other
ethnic group
Prefer not
tosay
Not
specified
Board of Directors 0 0 0 0 6 0 0 0
Executive Committee and
directreports 0 0 1 0 16 0 0 0
Monthly paid employees 51 32 22 7 2,222 4 28 6
Weekly paid employees 1 10 3 1 625 0 7 0
Total 52 42 26 8 2,869 4 35 6
John Tutte
Chairman
17 October 2022
• Rolling out talent and succession planning training to
senior leaders and line-managers, focused on developing
graduates as part of our three-year talent strategy.
• Continuing to work with the Regional Chairs and Managing
Directors to develop progression and retention plans for
key employees within each division, promoting diversity
where possible.
Focus in 2022/23
• Finalising the succession of the Senior Independent
Director whose nine year tenure ended on 31 July 2022.
A successor will be appointed in advance of the AGM.
• To continue our work to improve diversity across the Group,
taking into account the recommendations from the Parker
Review, the FCA Diversity and Inclusion Policy Statement,
and updated The FTSE Women’s Leaders Review.
Director and employee profile
The following tables show the gender and ethnicity split in the
Group as at 31 July 2022. Ethnic diversity was reported for the
first time in 2021, more detail on the Group’s efforts to improve
diversity can be found on page 40:
Male
No.
Male
%
Female
No.
Female
%
Total
No.
Total
%
Board of Directors 4 67 2 33 6 <1
Executive
Committee and
direct reports 12 71 5 29 17 <1
Senior managers 131 78 37 22 168 6
Other employees 1,967 69 884 31 2,851 94
Total 2,114 69 928 31 3,042 100
Nomination Committee Report continued
Governance
96 Bellway p.l.c. Annual Report and Accounts 2022
Audit Committee Report
Audit, Risk and Internal Control
Membership and meeting attendance
Director
Date appointed to
theCommittee
Number of
meetings
attended during
theyear
Ian McHoul
(Chairman)
1 February 2018,
appointed Committee
Chairman on 12
December 2018
3/3
Denise Jagger 1 August 2013 3/3
Jill Caseberry 1 October 2017 3/3
Sarah Whitney 1 September 2022 0/0
Main focus in 2021/22
• Reviewed the performance of the external auditor following
their first audit cycle.
• Reviewed internal controls and risk management.
• Ensured that the Group has appropriate disclosures as
required by the TCFD.
• Considered the assessment and disclosure of significant risk
and profit items, including legacy building safety expense.
Focus areas for 2022/23
• Ensuring the Group has appropriate internal audit resource.
• Continue to assess significant risk and profit items for
the Group.
• Ensuring that the Group continues to have the appropriate
disclosures as required by the TCFD in the 2023 Annual
Report and Accounts.
I am pleased to present our Audit Committee Report and
to provide you with an update of the work undertaken
by the Audit Committee (the ‘Committee’) during the
period. The update sets out how we have discharged our
responsibilities and provided assurance on the integrity of the
2022 Annual Report and Accounts, alongside an insight into
key areas considered.
The Committee supports the Board in
achieving the objectives of the corporate
governance framework.
Ian McHoul
Chairman of the Audit Committee
The Committee supports the Board in achieving the
objectives of the corporate governance framework,
withitsprincipal activities focused on:
• the integrity of financial reporting;
• the quality of narrative reporting;
• the quality and effectiveness of internal controls and
riskmanagement systems;
• procedures relating to the prevention and detection
offraud and bribery;
• risk and internal audit; and
• external audit.
Committee governance
During the year the Committee comprised 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.
Sarah Whitney joined the Committee on 1 September 2022.
I am a Chartered Accountant, currently Chairman of
Vindenum P.L.C. and Chair the Audit Committee of Youngs
&Co.’s Brewery P.L.C. Previously I served Scottish & Newcastle
plc from 1998 to 2008, first as Finance Director of Scottish
Courage and later as Group Finance Director of Scottish
&Newcastle plc, before becoming 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 Corporate Governance Code (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 members enables us 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 86 and 87.
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 Risk Director attend
meetings by invitation. 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.
Representatives of Ernst & Young LLP (“EY”) attended all
meetings during the year 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 Risk Director 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 decision making to take place.
97Bellway p.l.c. Annual Report and Accounts 2022
Governance
Audit Committee Report continued
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 activities undertaken at the October 2022 meeting
concluded the Committee’s activities in relation to the Group’s
financial reporting for the year ended 31 July 2022.
The main activities performed by the Committee at these
meetings are described below:
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.
• 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 statement 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 were
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 into 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 had 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
Risk Director.
January 2022 The Committee:
• Received and challenged a risk management
update from the Group Risk Director and reviewed
the Risk Management Policy.
• Received and challenged an update on internal
audit activities undertaken, reviewed the Internal
Audit Charter and provided feedback on the
proposed 2022 Internal Audit plan.
• 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.
• Assessed the performance of the 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, these had on the
Bellway audit.
• Held a private meeting with EY and the Group
Risk Director.
Governance
98 Bellway p.l.c. Annual Report and Accounts 2022
Meeting date Activities
March 2022 The Committee:
• Considered a paper produced by management
setting out management’s assessment of significant
risk and profit items, including legacy building
safety improvements and incremental site
related COVID-19 costs, 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 rationale
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 2022
Interim Announcement.
• Challenged EY’s audit plan, including the proposed
Group, subsidiary, and divisional materiality for the
2022 audit.
• Reviewed the Independent Auditor Policy.
• Reviewed and challenged a risk management and
internal audit update.
• Reviewed and approved the Group’s Corporate
Criminal Offence Policy.
• Reviewed compliance with the Group policies for
half year ended 31 January 2022.
• Reviewed the Group’s response to the Investment
Association priorities for 2022 annual reports.
• Held a private meeting with EY and the Group
Risk Director.
October 2022 The Committee:
• Reviewed the final draft of the 2022 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.
• Concluded that the 2022 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 2022 Annual
Report and Accounts to the Board for approval.
• Reviewed the draft viability statement to appear
in the 2022 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 statement or otherwise, that affected
profit during the year and provided challenge of
the treatment of these.
• Considered and challenged a paper produced by
management setting out the accounting approach
used for the legacy building safety provision
and related expense following the signing of the
Building Safety Pledge in April 2022. This consisted
of understanding the approach taken in identifying
apartment blocks dating back to April 1992 that
could fall within the scope of the Pledge, cost
estimates applied, inflation and discounting
assumptions along with ensuring the associated
disclosures are clear and understandable.
The Committee challenged managements’ cost
and inflation assumptions, including considering
a sensitivity paper, and believed managements
proposed assumptions to be appropriate.
• Considered and challenged management about the
use of APMs and whether they were appropriate or
whether GAAP measures would be more relevant.
• Reviewed a paper setting out the TCFD disclosure
requirements and how they have been satisfied
by Bellway.
• Reviewed and approved the Slavery and Human
Trafficking Statement 2022.
• Reviewed a paper produced by management
setting out the main controls for preventing and
detecting fraud.
• Reviewed and challenged a risk management and
internal audit update.
• Considered whether the interaction between
the Group risk and audit function (internal audit)
and external auditor during the period had
been appropriate.
• Reviewed and considered the effectiveness of the
Group risk and audit function.
• Considered the findings of the performance
evaluation of the Committee.
• Held a private meeting with EY and the Group
Risk Director.
99Bellway p.l.c. Annual Report and Accounts 2022
Governance
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;
• Cost of sales recognition;
• Carrying amount of land and work in progress;
• Going concern;
• Legacy building safety improvement provision; and
• 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
Matter considered
Revenue of £3,536.8 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 thecustomer.
The Committee understood the Group’s revenue
recognition policy.
Management outlined the existing systems
and controls surrounding revenue recognition.
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 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 £2,749.8 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
inmarketconditions.
The Committee understood the Group’s gross
profit recognition policy.
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.
Governance
100 Bellway p.l.c. Annual Report and Accounts 2022
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 2022 had a book value of £4,311.2
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 for any site/phase, currently trading or
not, is 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.
The Committee reviewed and understood
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.
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 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 banking facilities to show the expected
headroom and bank 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 77 and 78.
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 and safety improvement
provisions totalling £441.5 million were recognised
in the balance sheet as at 31 July 2022.
The Committee reviewed a paper setting out the
IAS 37 requirements for recognising a provision,
and how this applies following the signing of the
Building Safety Pledge in April 2022.
The paper set out the approach taken in
identifying apartment blocks dating back to April
1992 that could fall within the scope of the Pledge,
cost estimates applied, inflation and discounting
assumptions along with ensuring the associated
disclosures are clear and understandable.
The Committee challenged management’s cost
and inflation assumptions, and after considering
a sensitivity paper concluded management’s
proposed assumptions to be appropriate.
Following a review of
this paper and challenge
of management and
the external auditor, the
Committee concluded
that the legacy building
safety improvement
provision held in the
balance sheet and the
associated disclosures
are appropriate.
101Bellway p.l.c. Annual Report and Accounts 2022
Governance
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
£346.2 million has been recognised in the year.
Separate disclosure is required on the face of the
income statement when, in the opinion of the
Board, a transaction is material by size or nature
and of such significance that it is necessary to
give a proper understanding of the results.
The Committee reviewed and understood 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 prior to the approval of the
Interim Statements.
The Committee provided 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. The base case and scenarios incorporated
the anticipated costs arising from adopting the Future
Homes Standard. These scenarios included a reduction
in both the total number of legal completions and private
average selling price, with both sales and administrative
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.
Quality of narrative reporting
2022 Annual Report and Accounts: fair, balanced and
understandable
Group Risk and Audit provided a paper to the Committee
to assist them in concluding whether the 2022 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 2021
Annual Report and Accounts has been reflected.
In addition, the Committee performed a comprehensive
review of the Annual Report and Accounts considering items
such as:
Governance
102 Bellway p.l.c. Annual Report and Accounts 2022
Fair Balanced Understandable
The Annual Report and Accounts provide
a comprehensive review of the Group’s
strategy and activities during the year which
isconsistent with the business model.
The Annual Report and Accounts 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
resultsand 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 the emerging and principal risks and
uncertainties are both accurate and complete.
The KPIs and APMs have
remained consistent and
there has been no change
inthe methodology.
All material transactions and issues faced by
the Group are included within the financial
statements and disclosed where required.
The Committee concluded that the 2022 Annual Report
and Accounts, when taken as a whole, are 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, processes and controls are separately reviewed
by the Committee. The Committee is aware of the increasing
significance of ESG reporting matters with the Group having
established road map for climate risk disclosures relating to its
Annual Report and Accounts. This, along with regular updates
from EY since October 2021, has enabled the Committee
to review and assess the additional disclosures included
in the 2022 Annual Report and Accounts, when TheTask
Force on Climate-related Financial Disclosures (‘TCFD’)
became mandatory.
Quality and effectiveness of internal controls
andrisk 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 on a quarterly basis.
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 dœs not
eliminate this risk completely.
The emerging and principal risks facing the Group,
which are described in the Strategic Report on pages
79 to 83, 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 Chair 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 Chairman visits to divisions.
• 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.
103Bellway p.l.c. Annual Report and Accounts 2022
Governance
Audit Committee Report continued
Throughout the year, the Committee received reports from the Group Risk and Audit team on the following areas of focus:
Review Focus and outcomes
Legal completions
(half-year andyear-end)
2 reviews
Testing of legal completions is undertaken on a bi-annual basis to check that transactions
have been recorded and recognised in the correct period, with appropriate supporting
documentation. For FY22, this work provided positive assurance that the processes operate
effectively and prevent the occurrence of cut-off issues.
Divisional compliance
13 reviews
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.
Building safety
risk assessment
1 review
This risk assessment offered a number of recommendations to further strengthen the
Group’s policies, training and audit arrangements over fire safety.
GDPR compliance
riskassessment
22 site visits
This risk assessment focused on the paper-based records held within sales offices and
site compounds, including the need to collate such information, and storage and disposal
processes. No material recommendations were raised.
IT security
1 review
This review assessed the Group’s cyber controls using methodology based on Center for
Internet Security best practices for securing systems and data. Recommendations were
made allowing the Group to further strengthen its robust IT infrastructure and security
controls.
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 FY22, only administrative improvement opportunities were
identified.
Modern slavery – subcontractors
1 review (plus 5 site visits)
This review included a risk assessment of the Group’s subcontractor population,
considering factors that may pose a greater threat of modern slavery, followed by an
audit of trades at five sites. The work provided positive assurance that the Group takes its
responsibilities surrounding modern slavery seriously and raised minor recommendations
which have further enhanced third-party onboarding and induction processes.
Where any control recommendations are made by the external auditors, these are considered, and where relevant are
implemented to further strengthen the control environment.
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 reviewed and confidentially
investigated by senior, independent personnel and the
findings are reported to the Board.
During the year the Committee approved minor changes
tothe Whistleblowing Policy.
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 audit function
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 Risk Director has
a direct reporting line into both the Group Finance Director
and myself. During the year the Group risk and audit function
undertook a number of internal audit reviews, utilising
specialists from within relevant functions. The Group Risk
Director 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.
Governance
104 Bellway p.l.c. Annual Report and Accounts 2022
External audit
Audit performance and effectiveness
The external auditor of the Group is EY. Their performance is
regularly reviewed by both management and the Committee,
and this is done formally on an annual basis.
The Committee considered a paper produced by
management which used the FRC practice aid ‘Audit Quality
– Practice aid for Audit Committees’ as a basis.
The review consisted of:
• Considering the robustness and appropriateness of EY’s
approach to auditing the significant risk areas facing
the Group.
• Considering whether EY’s materiality proposal for the
2020/21 financial year, which was the most up-to-date
information held at the date of review, was set at an
appropriate level for the component parts of the Group.
• Discussions with management who were involved in the
financial reporting processes.
• An understanding of the findings of the Audit Quality
Inspection (‘AQI’) results that were published by the FRC
on 23 July 2021, following their inspection of audit firms
including EY. This included understanding whether any
ofthe fundings would have affected the Bellway audit.
• An understanding of the Audit Quality Review (‘AQR’) and
internal EY quality review findings, specifically in relation
tothe engagement partner, Mark Morritt.
• Considering EY’s independence, objectivity, and
professional scepticism.
• Reviewing the performance of EY against their audit
strategy for the 2020/21 financial year, the most recent
completed audit cycle, and their interaction with the
Committee during the process.
• Considering where EY have added value and
demonstrated proactivity.
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
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
theindependence 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
onthe 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, 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 activities.
Ian McHoul
Chair of the Audit Committee
17 October 2022
105Bellway p.l.c. Annual Report and Accounts 2022
Governance
Remuneration Report
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 2021/22 financial year, which will be subject to a single
advisory shareholder vote at the forthcoming AGM.
Performance and reward in 2021/22
The Committee continues to operate a remuneration
structure based on the three core elements of basic salary,
annual cash bonus, subject to the deferral policy, 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. The number of housing completions
rose by 10.5% to 11,198 (2021 – 10,138), underlying operating
profit rose to £653.2 million
(2,3)
(2021 – £531.5 million).
Underlying earnings per share increased by 19.9% to 420.8p
(2,3)
per share (2021 – 350.9p) and underlying RoCE increased to
19.4%
(2,3)
(2021 – 16.9%).
To reflect a material increase in our Group Finance Director’s
responsibilities his salary was increased by 5% on 1 February
2022. Keith took on responsibility for delivering the Board
agreed sustainability and ESG strategy through our new Better
with Bellway sustainability strategy and we are very satisfied
that these responsibilities are being well managed.
Better with Bellway addresses the key sustainability risks
and opportunities unique to Bellway, ensuring that the
Group is aligned to national and international standards and
responding to the views of our stakeholders. It enables the
Board to set suitably ambitious goals and KPIs, set Science
Based Targets, increase our reporting transparency, further
improve the overall quality of disclosure, and continue to
build stakeholder trust.
The Company has awarded the Executive Directors a bonus
payment of 118.32% of basic salary, however, the long-term
incentive plan awarded in November 2019 will not vest based
on performance over the three financial years to 31 July
2022. The Committee considers that the bonus outcome is
reflective of the strong performance of the Group and the
Executive Directors during the 12-month period to 31 July
2022. The Committee also recognises that the long-term
incentive plan (LTIP) not vesting is reflective of the challenging
regulatory environment over the period. The Committee
determined that there was no reason to exercise its powers
of discretion in relation to either the bonus or LTIP outcomes,
which were considered to be in line with individual
contribution and the overall Company performance during
the respective performance periods.
As we disclosed last year, whilst not a requirement of the
policy at the time, the Group Chief Executive voluntarily
agreed to invest all of the FY21 bonus he would receive
above 90% of salary (after paying tax and national insurance)
in Bellway shares which would be kept 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 and EPS performance conditions are met over the period
to 31 July 2024, with any shares delivered being subject to a
further two-year holding period. Details of these awards are
set out on pages 112 and 113.
How we will implement the Remuneration Policy in 2022/23
At our AGM last year, shareholders approved the renewal
of our Directors’ Remuneration Policy. The Committee
consider the current policy to be operating effectively,
providing a balance between fixed pay and the short and
long-term incentives which provide a robust link between
pay and performance. The Committee has however been
reviewing how the Policy should operate for the year ahead
and is proposing to make the changes described below.
As disclosed in the 2021 Report, the Policy and its operation
are considered to be in line with the principles set out in
Provision 40 of the UK Corporate Governance Code 2018.
There will be a 4% increase to the Executive Directors’ salaries
in 2022/23 which is lower than the level of average increase
to the workforce in general, given the challenging inflationary
environment. As previously noted, the pension rates for the
Directors will be aligned with those of the workforce at the
end of 2022, at 10% of salary, with the workforce pension rates
having recently been increased to this level. All other benefits
remain unchanged.
We plan to retain the overall weighting of the profit, land bank
and ESG measures for the annual bonus. Within the ESG
measures we plan on marginally increasing the weighting
on achievement of 5-star
(6)
homebuilder. The small increase
will come from a reduction in the weighting on employee
engagement from 7.5% to 5%.
Health and safety performance will be taken into account
as part of the Committee’s overall assessment of the
bonus payment, which it dœs every year before making a
final determination.
Governance
106 Bellway p.l.c. Annual Report and Accounts 2022
Mandatory deferral of any bonus earned above 100% of salary
into Bellway shares for three years was introduced by the 2021
Remuneration Policy. 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 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.
The Committee has been reviewing both the performance
measures and opportunity under the long-term incentive
plan, to ensure they are aligned to our future strategy and
provide appropriate levels of opportunity respectively.
Having operated with only relative TSR for a number of years,
we introduced underlying EPS as a performance measure this
financial year and advised shareholders that we would plan
to also introduce a three-year environmental target for carbon
reduction in our supply chain. Having looked at the other
possible measures and listened to shareholder feedback we
feel that it would be appropriate to also include return on
capital employed (RoCE) to increase the focus on the efficient
use of capital over the longer-term.
Environmental
We are working on reducing the carbon generated within the
business and have identified that 99% of our carbon footprint
is within the supply chain for housebuilding. Actions required
to reduce this will take a number of years and go out beyond
the end of the next three-year LTIP performance cycle. We do
not feel this is therefore the most suitable measure this year.
In the interim, we propose to use two measures which directly
have an important impact on the environmental sustainability
of the business. The Committee feels these measures are
more suitable for the longer-term than the annual incentive
as their achievement requires actions to be planned and
achieved over multiple years.
• Scope 1 and 2 emissions - We have set our goal for 2030 of
reducing these by 46% from the 2019 level of 25,715 tonnes.
As this target has an eight-year delivery period we propose
to set a threshold target that equals 3/8th of the 46%
reduction (17.3% reduction by 2025). This creates a straight
line between now and 2030 for the achievement of our
goal. A stretch target of a 25% reduction will also be set to
incentivise earlier delivery of the total 46% reduction.
• Waste reduction - We have set our goal for reducing waste
in each housing unit built by 20% by 2025 from a starting
point of 8.90 tonnes (measured in July 2021). We propose
to set a threshold to stretch range of reducing by 17.5% to
22.5% (1.56 to 2.0 tonnes) per housing unit in FY25.
RoCE
Efficient use of capital is important for Bellway to maintain
a balanced focus on both profitability and land bank
investment. This has not been a feature of incentives at
Bellway, but we now feel that it should be. The Committee
plans to set a target range of 14% to 19% for FY25 and disclose
a reconciliation for the definition of adjusted RoCE in our
annual report. Adjusted RoCE for the current financial year on
a consistent basis of calculation is 16.4%.
Increase in opportunity
When we introduced the higher LTIP limit of 200% of salary
in the Policy last year, we undertook to consult with leading
shareholders before implementing any increase. Our intention
is now to make that increase for the Chief Executive and
Group Finance Director, having consulted with shareholders
on the proposals and who were generally supportive of the
changes. We have been aware for a number of years that
total incentive opportunity at Bellway has lagged behind
the housebuilding and UK listed market generally. We last
increased the annual grant level from 130% to 150% of
salary in 2017/18, and whilst the Committee dœs not adjust
remuneration packages at Board level to slavishly follow the
market, we feel now that the gap in incentive opportunity is
unhealthy. We believe that the targets that we have set are
more challenging to achieve than those set in recent prior
years. We will also assess whether a scale back in the normal
grant level is appropriate based on the share price at the
time of grant, compared to recent years’ prices, or whether to
impose a windfall gain test after the grant instead.
The Committee engaged with shareholders and employees
with regards to executive remuneration during the year.
We engaged with the largest shareholders and advisory
bodies with respect to the changes to the implementation
of the Policy including with respect to (i) the change to the
metrics and weightings under the bonus and LTIP; (ii) the
salary increase for the Group Finance Director and (iii) the
increase in LTIP opportunity for both Executive Directors.
Shareholders were overall supportive of the changes.
The Committee also engaged with employees through
Employee Listening Groups where the governance of
executive remuneration at Bellway was explained along with
how the arrangements align with the workforce pay policies.
Employee feedback was, in particular, positive in respect of
the introduction of ESG metrics into the LTIP.
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 are grateful for the support from our shareholders at
the 2021 AGM with c.97% support for the Policy and c.98%
support for the Annual Report on Remuneration and we hope
you are supportive of the approach we have taken during
these unprecedented times and will support the resolutions
approving this report at the 2022 AGM.
Jill Caseberry
Chair of the Remuneration Committee
17 October 2022
107Bellway p.l.c. Annual Report and Accounts 2022
Governance
Remuneration at a glance
How remuneration links to our strategy (see pages 14 and 15 for details of our performance).
Strategic objective Link to remuneration Metric Performance against metric
Earnings growth and
drivingdown costs
Annual bonus and future long-
term incentive plan awards
Underlying operating profit Achieved
Volume growth and focus
onRoCE
Annual bonus Sufficient land bank of plots
with DPP
Achieved
Customer First Annual bonus Retain 5-star
6
homebuilder
status
Achieved
Customer First Annual bonus Overall customer satisfaction
score
Partly Achieved
Employee Engagement Annual bonus Results of Employee
Engagement Survey
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
Not achieved
£000
0 £500 £1,000 £1,500 £2,000
Fixed pay total Annual bonusOther items Long-term share awards Impact of share price fall on LTIP
52%
52% 48%
48%
Chief
Executive
Finance
Director
£1,738
£1,044
How our Executive Directors were paid during 2021/22
Bonus outcomes – see page 110
The 2021/22 bonus was based on financial and strategic targets.
Strategic objective
Weighting
(%ofsalary)
Threshold
(25% pays out)
Maximum value
(100% pays out)
Actual
(a)
Payment
(% of maximum)
Payment
(% of salary)
Operating profit (underlying) 80.0% £555.0
million
£600.0
million
£662.5
million
100% 80.0%
Strategic objectives and performance against target
Threshold
(25% pays out)
Land bank The land bank of plots with DPP (available for completion in the following
financial year) exceeded the maximum target and an award of 20% of
salary was achieved.
Achieved in full – 20% of salary
awarded.
Customer
First
We retained our 5-star
6
homebuilder status. Achieved in full – 5% of salary
awarded.
The Group’s 9-month customer satisfaction score in 2022 was 82.1%
compared with the base of 79.4%.
Achieved – 5% of salary awarded.
The Group’s overall customer satisfaction score in 2022 was 86.9%
compared with the base of 86.8%.
Partly achieved – 0.82% of salary
awarded.
The Group’s employee engagement score, relating to Customer First, in
2022 was 96.0% compared with the base of 94.0%.
Achieved – 2.5% of salary awarded.
Employee
Engagement
The Group’s employee engagement score in 2022 was 96% compared
with the base of 87%.
Achieved – 5% of salary awarded.
Note:
a. For underlying operating profit and land bank bonus purposes, targets and outcomes include our share of joint ventures.
b. Underlying profit excludes exceptional items of income and expenditure, for example costs and recoveries associated with legacy building safety expense. This removes any incentive to
delay or reduce spending on life-critical fire safety remedial works.
Remuneration Report continued
Governance
108 Bellway p.l.c. Annual Report and Accounts 2022
LTIP outcomes – see page 111
The PSP awards granted in 2019/20 were based on a three-year TSR performance for the period to 31 July 2022.
Metric Performance condition Threshold target Stretch target Actual % Vesting
50% of
awards
Relative TSR against an index of peer
housebuilders
-5.2% TSR
(median)
17.3% TSR
(median +22.5%)
-11.6%
Bellway TSR
0%
50% of
awards
Relative TSR against the FTSE 250
(excludingfinancial services companies
andinvestment trusts)
Rank 71 (median) Rank 36
(upperquartile)
Rank 83
Bellway
0%
Total 0%
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 Date appointed to the Committee
Number of meetings
attendedduring the year
Jill Caseberry (Chair) 1 October 2017 (appointed as Committee Chair on 13 December 2017) 7/7
John Tutte 1 March 2022 3/3
Paul Hampden Smith 1 August 2013
(resigned on 31 March 2022)
5/5
Denise Jagger 1 August 2013 7/7
Ian McHoul 1 February 2018 7/7
Sarah Whitney 1 September 2022 0/0
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 £40,963 (2021 – £68,616) which was charged on a time and material basis.
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 2021/22
• Approved the long-term incentive awards vesting levels for the 2021/22 financial year.
• Approved the 2020/21 Remuneration Report.
• Approved the 2020/21 financial year bonus payments for the Executive Directors and the Group General Counsel and
Company Secretary.
• 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.
109Bellway p.l.c. Annual Report and Accounts 2022
Governance
Focus areas for 2022/23
• Approve the long-term incentive awards vesting levels for the 2021/22 year for the Executive Directors and the Group General
Counsel and Company Secretary.
• Approve the 2021/22 Remuneration Report.
• Set the bonus targets for the 2022/23 year.
• Approve the 2021/22 financial year bonus payments for the Executive Directors and the Group General Counsel and
Company Secretary.
• 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.
Implementation of Remuneration Policy in 2021/22
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 2022
For 2021/22, Jason Honeyman received a salary of £711,048 and Keith Adey received a salary of £423,572.
Annual bonus for the year ended 31 July 2022
The annual bonus is payable in November 2022 for performance during the year ended 31 July 2022. The performance targets
for the 2021/22 bonus comprised of underlying operating profit and three strategic targets. Any bonus earned above 100% of
salary will be deferred into shares which cannot be sold for three years.
The actual bonus payment against underlying operating profit was determined on the following basis:
Strategic objective
Weighting
(%ofsalary)
Threshold
(25% pays out)
Maximum value
(100% pays out)
Actual
(a)
Payment
(% of maximum)
Payment
(% of salary)
Operating profit (underlying) 80.0% £555.0
million
£600.0
million
£662.5
million
100% 80.0%
Underlying operating profit including our share of joint ventures grew by 22.3% to £662.5 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 Opportunity and score
Land bank 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 5% 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 20% of salary. The
land bank targets are commercially sensitive and will be disclosed one year in arrears.
(b)
Maximum –
20% of salary
The land bank of plots with DPP (available for completion in the following financial
year) exceeded the maximum target and an award of 20% of salary was achieved.
Achieved in full –
20% of salary awarded.
Customer
First
Retention of 5-star
6
homebuilder status (as measured by the HBF). Maximum –
5% of salary
We retained our 5-star
6
homebuilder status. Achieved in full –
5% of salary awarded.
9-month customer satisfaction score (as measured by NHBC): A threshold payment
of 1.25% of salary would be triggered for a threshold score of 79.4%, with an additional
bonus opportunity on a straight-line basis for further improvement in the score, up to
a maximum of 5% of salary for a score of at least 81.0%.
Maximum –
5% of salary
The Group’s customer satisfaction score in 2022 was 82.1% compared with the base
of79.4%.
Achieved in full –
5% of salary awarded.
Overall customer satisfaction score (as measured by NHBC): A threshold payment of
0.63% of salary would be triggered for a threshold score of 86.8%, with an additional
bonus opportunity on a straight-line basis for further improvement in the score, up to
a maximum of 2.5% of salary for a score of at least 87.8%.
Maximum –
2.5% of salary
Remuneration Report continued
Governance
110 Bellway p.l.c. Annual Report and Accounts 2022
Strategic pillar Objectives and performance against target Opportunity and score
The Group’s customer satisfaction score in 2022 was 86.9% compared with the base
of86.8%.
Partially achieved
– 0.82% of salary
awarded.
Employee
Engagement
The Group’s employee engagement score relating to Customer First: A threshold
payment of 0.63% of salary would be triggered for a threshold score of 94.0% with an
additional bonus opportunity on a straight-line basis for further improvement in the
score up to a maximum of 2.5% of salary for a score of at least 95.5%.
Maximum – 2.5% of
salary
The Group’s employee engagement score relating to Customer First in 2022
was 96.0% compared with the base of 94.0%.
Achieved in full – 2.5%
of salary awarded
Employee engagement scores (as measured by the June 2022 employee survey):
Athreshold payment of 1.25% of salary would be triggered for a threshold score
of 87.0%, withan additional bonus opportunity on a straight-line basis for further
improvement in score, up to a maximum of 5% of salary for a scores of at least 89.5%.
Maximum – 5% of salary
The Group’s employee engagement score in 2022 was 96.0% compared with the
base oftarget 87.0%.
Maximum – 5% of salary
Notes:
a. For underlying operating profit and land bank bonus purposes, targets and outcomes includes our share of joint ventures.
b. The 2020/21 base target was set at 10,000 plots with a maximum target of 10,500 plots. The actual performance achieved was 11,715 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.
Long-term incentives vesting in respect of performance period ended 31 July 2022
The PSP awards granted in 2019/20 were based on a three-year TSR performance for the period to 31 July 2022. In line with the
2021 Remuneration Policy, any bonus earned above 100% of salary will be deferred into shares which cannot be sold for three
years. The applicable vesting percentages will be as follows:
Metric Performance condition Threshold target Stretch target Actual % Vesting
50% of
awards
Relative TSR against an index of peer
housebuilders comprising Barratt Developments
PLC, The Berkeley Group plc, Crest Nicholson
Holdings plc, Persimmon plc, Redrow plc, Taylor
Wimpey plc and Vistry Group 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.).
-5.2% TSR
(median)
17.3% TSR
(median +22.5%)
-11.6%
Bellway TSR
0%
50% of
awards
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.
Rank 71
(median)
Rank 36
(upperquartile)
Rank 83
Bellway
0%
Total 0%
Regardless of TSR performance, 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.
As the TSR performance thresholds have not been met, the Committee agreed there were no circumstances that warranted the
exercise of discretion. As a result, no awards will vest in November 2022.
111Bellway p.l.c. Annual Report and Accounts 2022
Governance
Single figure of total remuneration (audited)
Salary and
fees
(a)
£
Taxable
benefits
(b)
£
Pension
(c)
£
Annual
bonus
£
Sub-total
£
Long-term
incentives
(d)
£
Other
items
(e)
£
Total
£
Total fixed
remuneration
£
Total variable
remuneration
£
Non-executive Chairman
John Tutte 2022 108,333 – – – 108,333 – – 108,333 108,333 –
2021 – – – – – – – – – –
Paul Hampden
Smith
2022 152,282 – – – 152,282 – – 152,282 152,282 –
2021 221,340 – – – 221,340 – – 221,340 221,340 –
Executive directors
Jason Honeyman 2022 711,048 43,797 142,210 841,312 1,738,367 – – 1,738,367 897,055 841,312
2021 689,000 49,293 137,800 822,804 1,698,897 294,780 4,495 1,998,172 876,093 1,122,079
Keith Adey 2022 423,572 34,410 84,714 501,170 1,043,866 – – 1,043,866 542,696 501,170
2021 400,427 33,311 80,085 478,190 992,013 218,317 – 1,210,330 513,823 696,507
Non-executive directors
Denise Jagger 2022 71,776 – – – 71,776 – – 71,776 71,776 –
2021 69,550 – – – 69,550 – – 69,550 69,550 –
Jill Caseberry 2022 71,776 – – – 71,776 – – 71,776 71,776 –
2021 69,550 – – – 69,550 – – 69,550 69,550 –
Ian McHoul 2022 71,776 – – – 71,776 – – 71,776 71,776 –
2021 69,550 – – – 69,550 – – 69,550 69,550 –
Total 2022 1,610,563 78,207 226,924 1,342,482 3,258,176 – – 3,258,176 1,915,694 1,342,482
2021 1,519,417 82,604 217,885 1,300,994 3,120,900 513,097 4,495 3,638,492 1,819,906 1,818,586
Notes:
a. Paul Hampden-Smith retired as Chairman on 1 April 2022, John Tutte was appointed to the Board on 1 March 2022 and took over as Chairman upon Paul’s retirement. Their fees reflect their
service during the financial year.
b. Taxable benefits include car allowance and health insurance and £9,387 for Jason Honeyman which relates to hotel and travel costs.
c. Pension includes both payments in lieu of pension of £221,591 and contributions to a defined contribution scheme of £5,333. 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.
d. The value of long-term incentives in 2022 is nil as the threshold performance targets for the 2019 PSP awards were not met and as a result the awards lapsed in full. The 2021 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 of all directors’ interests in the Company share-based reward schemes are shown.
Jason Honeyman
Scheme
Awards/
options held at
1 August 2021
Granted/
awarded during
the year
Exercised
during the year
Lapsed during
the year
Awards/
options held at
31 July 2022
Exercise price/
market price
at date of
award(p)
Date of grant/
award
Exercisable/
capable of
vesting from
PSP
(a)
28,909 – (9,264) (19,645) – 2,750.0 22.10.2018 22.10.2021
PSP
(b)
30,667 – – – 30,667 3,370.0 16.10.2019 16.10.2022
PSP
(c)
39,005 – – – 39,005 2,317.0 27.10.2020 27.10.2023
2013 SRSOS
(f)
771 – – – 771 2,333.0 04.12.2020 01.02.2024
PSP
(d)
– 33,216 – – 33,216 3,211.0 26.10.2021 26.10.2024
Totals 99,352 33,216 (9,264) (19,645) 103,659
Remuneration Report continued
Governance
112 Bellway p.l.c. Annual Report and Accounts 2022
Keith Adey
Scheme
Awards/
options held at
1 August 2021
Granted/
awarded during
the year
Exercised
during the year
Lapsed during
the year
Awards/
options held at
31 July 2022
Exercise price/
market price
at date of
award(p)
Date of grant/
award
Exercisable/
capable of
vesting from
PSP
(a)
21,413 – (6,862) (14,551) – 2,750.0 22.10.2018 22.10.2021
PSP
(b)
17,823 – – – 17,823 3,370.0 16.10.2019 16.10.2022
2013 SRSOS
(f)
621 – – – 621 2,414.4 03.12.2018 01.02.2024
2013 SRSOS
(f)
356 – – – 356 2,528.0 03.12.2019 01.02.2023
PSP
(c)
22,668 – – – 22,668 2,317.0 27.10.2020 27.10.2023
PSP
(d)
– 19,304 – – 19,304 3,211.0 26.10.2021 26.10.2024
Totals 62,881 19,304 (6,862) (14,551) 60,772
Notes:
a. The performance period was 1 August 2018 – 31 July 2021. 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, Crest Nicholson Holdings plc, Persimmon plc, Redrow plc, Taylor Wimpey plc and Vistry Group (‘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 0% and the second at 57.4%, so 28.72% of these awards vested. Dividend equivalent
shares were also delivered to the participants in respect of the shares vesting (J Honeyman: 963 shares / K Adey: 713 shares).
b. The performance period for the awards granted in October 2019 finished on 31 July 2022. 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 2022’ above.
c. 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.
d. On 26 October 2021, awards of performance shares under the PSP were made to Jason Honeyman and Keith Adey, equal to 150% of their respective salaries at the date of grant. The face
values on grant of these awards were therefore £1,066,566 and £619,851 respectively. The performance period is 1 August 2021 – 31 July 2024. The performance condition was in three
equal parts. The first part is measured by reference to the median of a group of UK housebuilders comprising Housebuilders’ group (33% weighting) comprising Barratt Developments,
TheBerkeley Group, Crest Nicholson Holdings, Persimmon, Redrow, Taylor Wimpey and Vistry Group (‘Housebuilders’ Index’). If Bellway’s TSR matches 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 second part is measured by
reference to the companies in the FTSE 350 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 reaches the upper quartile. The third part is measured by reference to
EPS. Awards would start to vest at 25% if Bellway’s EPS reaches a threshold of 383.5p, increasing on a straight-line basis so that full vesting would be achieved if Bellway’s EPS reaches 435.9p.
Regardless of TSR performance, 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. These awards are also subject to clawback provisions.
e. All of the above awards set out in notes a-d were granted for nil consideration.
f. Further details of the 2013 SRSOS are shown in the summary of outstanding share options in note 23 to the accounts.
g. The value of long-term incentive plan awards for the executive directors which were exercised in the year and those which will become exercisable in 2022/23 are shown in the single
figure of total remuneration table on page 112.
h. The market price of the ordinary shares at 31 July 2022 was 2,446p and the closing range during the year was 2,070p to 3,526p.
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 2021/22 financial year.
Statement of directors’ shareholdings and share interests (audited)
The directors’ interests (including family interests) in the ordinary share capital of the Company as at 31 July 2022 are set
out below:
Scheme
Beneficially
owned at
31 July 2022
(c)
% basic
salary held
by executive
directors in
shares
(a)(b)
Shareholding
target of 200% of
basic salary met?
Beneficially
owned at
31 July 2021
Outstanding
and unvested
PSPawards
Outstanding
and unvested
share options
Share options
exercised in
the year
Jason Honeyman 34,777 141 In progress 26,503 102,888 771 9,264
Keith Adey 78,188 532 Yes 74,558 59,795 977 6,862
John Tutte 20,000 N/A N/A – N/A N/A N/A
Denise Jagger 2,462 N/A N/A 2,462 N/A N/A N/A
Jill Caseberry 470 N/A N/A 470 N/A N/A N/A
Ian McHoul 2,000 N/A N/A – N/A N/A N/A
Notes:
a. 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 vesting under the PSP, after allowance for paying tax, until the requisite number
of shares has been accumulated. 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 received in FY22 above 90% of salary (after paying tax and national insurance) in Bellway shares.
b. The % shareholding is based on salaries as at 31 July 2022 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 2022 and the date of this report.
113Bellway p.l.c. Annual Report and Accounts 2022
Governance
The following section of this report is not required to be audited.
Implementation of Remuneration Policy in 2022/23
This section sets out how the Company will implement the Remuneration Policy for the 2022/23 financial year. Full details
ofhow 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 2022/23 targets for the
Executive Directors.
Basic salaries
The Committee has awarded Jason Honeyman and Keith Adey salary increases of 4.0% which are below the level of the
average for 2022/23. Therefore, from 1 August 2022, Jason’s salary was increased to £739,490 p.a., and Keith’s salary was
increased to £451,259 p.a.
Annual bonus
For the 2022/23 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, including Bellway’s share of joint ventures (with a
maximum payment of 80% of basic salary achievable) and the following strategic performance measures which provide
amaximum bonus opportunity of 40% of basic salary.
Strategic
measure Objectives Score
Land bank 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.
Maximum –
20% of salary
Sustainability
Customer
First
This will be in four parts:
• 7.5% of salary for retaining 5-star
6
homebuilder status (as measured by the HBF).
• 7.5% of salary linked to 9-month post completion customer satisfaction score (as
measured by the HBF).
The nine-month customer satisfaction score element is assessed based on the question
‘would you recommend Bellway to a friend?’. This measure is used as it reflects a metric
by which the performance of each division is managed by the Executive Directors.
Maximum –
15% of salary
Sustainability
Employee
Engagement
Targets relating to the annual employee engagement survey. 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.
In line with the 2021 Remuneration Policy, any bonus earned above 100% of salary is required to be deferred into shares which
cannot be sold for three years.
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.
Remuneration Report continued
Governance
114 Bellway p.l.c. Annual Report and Accounts 2022
Long-term incentives
In line with the rationale set out in the Statement from the Committee Chair, the Company anticipates making a grant under
the PSP in October 2022 with a face value equivalent up to 200% of salary to the Executive Directors. Awards will vest to the
executive directors after three years, subject to the achievement of performance conditions with any shares vesting subject
toatwo year holding period.
The performance conditions for the 2022/23 Awards will be based on (i) underlying EPS
2,3
, (ii) TSR versus a group of peer
housebuilders, (iii) TSR versus the FTSE 350 constituents and, for the first time, (iv) Adjusted RoCE and (v) ESG, with a 20%
weighting on each metric.
The targets for Adjusted EPS and adjusted RoCE measure performance in 2024/25. In setting the targets the Committee
considered analysts consensus figures, internal forecasts and the impacts expected from the new Residential Property
Developer Tax (RPDT) from April 2022 and the end of Help-to-Buy.
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
theperformance period.
Metric Performance condition (25% to 100% straight line vesting) Threshold target Stretch target
20% of
opportunity
Underlying EPS in 2024/25. (Calculated using underlying profit and the current
taxrates.)
409.7p 463.8p
20% of
opportunity
Relative TSR against a group of peer housebuilders comprising Barratt
Developments PLC, The Berkeley Group plc, Crest Nicholson Holdings plc,
Persimmon plc, Redrow plc, Taylor Wimpey plc and Vistry Group PLC.
Median Median
+7.5% p.a.
20% of
opportunity
Relative TSR against the FTSE 350. (Excluding financial services companies
andinvestment trusts.)
Median Upper
Quartile
20% of
opportunity
Underlying Return on Adjusted Capital Employed. (Adding back land creditors
andlegacy building safety provisions to Capital Employed.)
14% 19%
10% of
opportunity
Reduction in scope 1 and 2 emissions. 25% of this part of an award vests at
areduction in tonnes by 17.3%, increasing pro-rata, to full vesting at a reduction
intonnes by 25% measured by emissions for 2024/25.
4,436 tonnes
reduction
6,429 tonnes
reduction
10% of
opportunity
Reduction in waste per completed unit. 25% of this part of an award vests at
areduction in tonnes by 17.5%, increasing pro-rata, to full vesting at a reduction
intonnes by 22.5% for 2024/25 compared to 2021/22.
1.56 tonnes
reduction
2.01 tonnes
reduction
Chairman and Non-Executive Director fees from 1 August 2022
Director
Fee from
1 August 2021
£
%
increase
Fee from
1 August 2022
£
Non-Executive Chairman fee 228,423 13.82% 260,000
Non-Executive Director fee 60,063 4.06% 62,500
Senior Independent Non-Executive Director, 11,713 0.32% 11,750
Audit and Remuneration CommitteeChair fees 11,713 15.26% 13,500
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. A benchmarking exercise was performed during the year to align fees to
the wider FTSE 250.
115Bellway p.l.c. Annual Report and Accounts 2022
Governance
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 113). 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, as at 31 July 2022, of £100 invested in Bellway on 31 July 2012 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.
Sou
rce: Datastream (Refinitiv Datastream) Bellway
Housebuilder’s Index
FTSE 250 Index
Total shareholder return £ (rebased)
700
600
500
400
300
200
100
0
Total shareholder return
31 July
2014
31 July
2015
31 July
2016
31 July
2017
31 July
2018
31 July
2019
31 July
2020
31 July
2021
31 July
2022
176
224
387
312
463
474
211
440
472
417
553
431
140
150
177
176
206
223
212
180
257
228
453
473
415
628
197
324
291
463
31 July
2012
31 July
2013
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).
2013 2014 2015 2016 2017 2018
(c)
2019
(d)
2020 2021 2022
Total remuneration
(£000)
1,243
(a)
1,450 1,960 2,785 3,468 1,737 1,220 1,110 1,998
(b)
1,738
Annual bonus paid
(as % of maximum)
100.0% 91.6% 88.8% 95.8% 93.8% 0.0% 76.7% 0.0% 99.5% 98.6%
PSP vesting (as a %
of maximum)
0.0% 50.0% 50.0% 100.0% 100.0% 99.8% 30.6% 47.7% 28.7% 0%
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 112.
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.
Remuneration Report continued
Governance
116 Bellway p.l.c. Annual Report and Accounts 2022
Percentage change in remuneration of directors compared to workforce
The table below shows the annual percentage change in base salary, benefits and bonus between FY19 and FY22 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.
% Change in
salary/ fees
FY21–FY22
(a)
% Change
inbenefits
FY21–FY22
% Change
inbonus
FY21–FY22
% Change in
salary/ fees
FY20–FY21
% Change
inbenefits
FY20–FY21
% Change
inbonus
FY20–FY21
% Change in
salary/ fees
FY19–FY20
% Change
inbenefits
FY19–FY20
% Change
inbonus
FY19–FY20
All other employees
(b)
+6.0 +8.4 +83.2 +1.6 +8.3 -79.9 +2.6 +8.7 +17.8
J Honeyman
(Group Chief Executive)
(c)
+3.2 -11.2 +2.6 +3.4 +9.8 +100 +25.6 +38.5 -100
K Adey
(Group Finance Director)
+5.6 +3.3 +5 +3.4 +0.3 +100 -1.4 +2.4 -100
J Tutte (Chair)
(d)
+100 n/a n/a n/a n/a n/a n/a n/a n/a
P Hampden Smith
(Chair)
(e)
-31.2 n/a n/a +3.4 n/a n/a +31.4 n/a n/a
D Jagger (INED) +3.2 n/a n/a +3.4 n/a n/a +2.3 n/a n/a
J Caseberry (INED) +3.2 n/a n/a +3.4 n/a n/a -1.4 n/a n/a
I McHoul (INED) +3.2 n/a n/a +3.4 n/a n/a +4.4 n/a n/a
Notes:
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 112.
b. All other employee figures are calculated on a cash basis.
c. 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 112.
d. John Tutte was appointed as Non Executive Chairman during the financial year, having joined Bellway on the 1 March 2022.
e. Paul Hampden Smith resigned as Non Executive Chairman on the 31 March 2022.
CEO pay ratio
We are publishing our CEO pay ratio figures for the financial years 2018/19, to 2021/22. Over time, ten-year ratios will eventually
be disclosed.
Upper quartile Median Lower quartile
Financial year Method Pay
ratio
Total pay and
benefits
£
Salary
component
£
Pay
ratio
Total pay
and benefits
£
Salary
component
£
Pay
ratio
Total pay
and benefits
£
Salary
component
£
2018/19 A 19:1 62,168 50,200 28:1 42,845 22,647 40:1 29,858 23,305
2019/20 A 18:1 60,675 24,400 27:1 40,415 22,000 43:1 25,580 25,200
2020/21 A 31:1 65,866 52,279 45:1 44,864 40,556 68:1 29,886 24,750
2021/22 A 25:1 70,036 62,311 36:1 48,662 29,438 54:1 32,148 24,561
The pay ratios have been calculated as at 31 July 2022 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 for the Group Chief Executive. The annual bonus earned during the 2021/22 financial year, which is expected
to be paid in November 2022, has been approved for the Group Chief Executive, there is not an accurate estimate for all
other staff, therefore cash bonus paid during the year (relating to the 2020/21 financial year) has been used in the calculations.
The decrease in the CEO pay ratio in the current year is driven by the current year LTIP opportunity not vesting.
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. Due to COVID-19 no bonuses were paid in the
2019/20 financial year, this led to a further fall in the CEO pay ratio.
117Bellway p.l.c. Annual Report and Accounts 2022
Governance
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 2021 and 31 July 2022.
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
2022
£m
2021
£m
% change
Employee costs
(a)
167.0 159.9 4.4
Dividends
(b)
172.4 144.9 19.0
Section 106 and CIL payments
(c)
117.2 71.3 64.4
Notes:
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 20 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. As at 31 July 2022 the Trust held 331,115 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 2022 was:
Limit of 5% in any ten years under all executive share plans Actual 0.92 %
Limit of 10% in any ten years under all share plans Actual 0.86 %
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:
Directors’ Remuneration Policy
(binding vote at AGM
on6December 2021)
Remuneration Report
(advisory vote at AGM
on6December 2021)
Number
of votes
% of
votes cast
Number
of votes
% of
votes cast
For 89,540,335 96.95 91,041,126 98.37
Against 2,815,436 3.05 1,505,145 1.63
Total votes cast (excluding votes withheld) 92,355,771 100.00 92,546,271 100.00
Votes withheld 206,210 15,710
At the AGM on 16 December 2022, the Company’s shareholders will have an advisory vote on the Remuneration Report.
On behalf of the Board
Jill Caseberry
Chair of the Remuneration Committee
17 October 2022
Remuneration Report continued
Governance
118 Bellway p.l.c. Annual Report and Accounts 2022
Directors’ Remuneration Policy
This part of the remuneration report provides a summary of the Directors’ Remuneration Policy which was approved by
shareholders at the AGM on 6 December 2021. Factual data has been updated where appropriate (e.g. details of service
contracts). A full version of the policy, as approved by shareholders, can be found in the Annual Report and Accounts for 2021
on the Company’s website.
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 complexityand their
rationale and operation should be
easytounderstand.
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.
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 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
thepolicy.
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
shouldbe 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,
valuesandstrategy.
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.
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.
119Bellway p.l.c. Annual Report and Accounts 2022
Governance
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.
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
linktostrategy Operation Maximum opportunity Framework to assess performance
Salary
To be market
competitive and
therefore assist
in recruiting,
retaining and
motivating high-
quality executives.
Reflects
individualrole
andexperience.
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.
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.
Remuneration Report continued
Governance
120 Bellway p.l.c. Annual Report and Accounts 2022
Component and
linktostrategy Operation Maximum opportunity Framework to assess performance
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.
The rate for current
Directors will be aligned
with that of the workforce
at the end of 2022.
Not applicable.
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
Annual bonus
To reward
achievement with
acombination
of financial and
non-financial
operational-based
performance
targets in
accordance with
Group KPIs.
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.
121Bellway p.l.c. Annual Report and Accounts 2022
Governance
Component and
linktostrategy Operation Maximum opportunity Framework to assess performance
Share ownership guideline for Executive Directors
To align executive
directors’ interests
with those
ofshareholders.
Executive directors are required
to accumulate a minimum
shareholding equivalent to 200%
ofbasic salary. This level, or if
lower the actual shareholding on
departure, must be maintained for at
least two years post departure.
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.
Not applicable. Not applicable.
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.
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.
200% of basic salary. 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.
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.
Remuneration Report continued
Governance
122 Bellway p.l.c. Annual Report and Accounts 2022
Component and
linktostrategy Operation Maximum opportunity Framework to assess performance
All-employee share schemes
To encourage
employees to
build a stake
in the future of
theCompany.
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
To set appropriate
fees in light of the
time commitment,
responsibilities,
wider market and
best practice.
The Chairman’s fee is determined
bythe 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.
The aggregate of NED
fees is set out in the
Articles of Association
and is currently
£500,000p.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
inconjunction with the Directors.
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.
123Bellway p.l.c. Annual Report and Accounts 2022
Governance
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 General policy Detail
Salary At a level required to attract the
most appropriate candidate.
Discretion to pay lower basic salary with incremental increases,
potentially higher than for the general workforce, as new
appointee becomes established in the role.
Pension and benefits In accordance with
Company policies.
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.
Bonus In accordance with
existing schemes.
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.
Long-term
incentives(PSP)
In accordance with Company
policies and maximum limits in the
PSP rules.
An award may be made in the year of joining or, alternatively,
theaward 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.
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).
Awards would, where possible, be consistent with the awards
forfeited in terms of the vehicle, structure, vesting periods,
expectedvalue and performance conditions.
Service contracts and loss of office payment policy
The details of the executive directors’ service contracts are as follows:
Executive Director
First appointed as
aDirector
Current contract
commencement date
Notice period
fromemployer
Notice period
fromexecutive
Jason Honeyman 1 September 2017 1 August 2018 6 months 6 months
Keith Adey 1 February 2012 1 February 2012 12 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.
Remuneration Report continued
Governance
124 Bellway p.l.c. Annual Report and Accounts 2022
Executive Director
First appointed as
a Director
Current letter
of appointment
commencement date
Current letter of
appointment
end date
John Tutte 1 March 2022 1 March 2022 28 February 2025
Denise Jagger 1 August 2013 1 August 2019 31 July 2022
Sarah Whitney 1 September 2022 1 September 2022 31 August 2025
Jill Caseberry 1 October 2017 1 October 2017 30 September 2023
Ian McHoul 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)
Salary, pension
and benefits
(after cessation
of employment)
Nil. 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.
The Company may pay in lieu of notice
an amount equivalent to 12 months’
salary, pension and benefits.
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.
The Company may pay in lieu of notice
an amount equivalent to 12 months’ salary,
pension and benefits.
Annual bonus No bonus payable. 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.
For the proportion of the financial year
worked, bonus may be payable pro-rata,
subject to performance, at the discretion of
the Committee.
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.
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.
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.
Other payments Nil. Depending upon circumstances,
theCommittee may consider payments
in respect of an unfair dismissal award,
outplacement supportand assistance
with legal fees.
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.
125Bellway p.l.c. Annual Report and Accounts 2022
Governance
Directors’ Report
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 26 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 Page number
Directors 86 to 87
Appointment and
replacement of directors
92 and in the Articles
Directors’ interests 113
Future developments 29 of the Strategic Report
Group undertakings 173
Environmental issues 42 to 61 of the Strategic Report
s172 statement/reporting 65 of the Strategic Report
Greenhouse gas emissions 44 of the Strategic Report
Whistleblowing 104
Financial risk management 75 to 78 of the Strategic Report
Going concern 77 of the Strategic Report
Results and Dividends
The profit for the year attributable to equity holders of
the parent company amounts to £242.6 million (2021 –
£390.7 million).
The Directors have proposed a final ordinary dividend for
the year ended 31 July 2022 of 95.0 per share (2021 – 82.5p).
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 11 January 2023 to shareholders on
the Register of Members at the close of business on Friday
2 December 2022.
Dividends paid during the year comprise the final dividend
of 82.5p per share in respect of the year ended 31 July 2021,
together with an interim dividend in respect of the year ended
31 July 2022 of 45.0p per share.
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.
Major interests in shares
As at 31 July 2022 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:
Topic As at 31 July 2022 As at 17 October 2022
Number of
shares with
voting rights
% total
voting
rights
Number of
shares with
voting rights
% total
voting
rights
BlackRock Inc Below 5% 6,631,353 5.36
Credit Suisse
Securities (Europe)
Ltd
3,890,282 3.38 3,890,282 3.38
Dimensional Fund
Advisors LP
6,148,373 4.99 6,148,373 4.99
Polaris Capital
Management
5,053,537 4.09 5,053,537 4.09
The Directors have proposed a final
ordinary dividend for the year ended
31July2022 of 95.0p per share.
Simon Scougall
Group General Counsel and Company Secretary
Governance
126 Bellway p.l.c. Annual Report and Accounts 2022
Post balance sheet events
The Company acquired 100% of the ordinary share capital
of Rosconn Strategic Land Limited on 12 October 2022 for
£24.8 million cash consideration.
Earlier this month, the Group also signed up to
the Developers’ Pact with the Welsh Government.
Similar tothePledge, this is a commitment to remediate
buildings over 11 metres in height with life critical fire
safety issues, which were constructed in Wales since 1992.
Reflecting our ongoing and responsible UK-wide approach
tolegacy building safety, the expected cost of the remediation
works in Wales was probable at the year end and is included
in our provision at 31 July 2022.
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
tobe 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 2022,
consisted of 123,486,260 ordinary shares of 12.5p each.
Further details of the issued capital of the Company can be
found in note 18 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.
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.
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.
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.
Amendments to the Articles
The Company may amend its Articles by passing a special
resolution at a general meeting of its shareholders.
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, 89,838 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,
tobe held on Friday 16 December 2022.
Purchase of the Company’s own shares
The Company was given authority at the AGM on
6 December 2021 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.
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 77, 91
and 92 respectively.
The Audit Committee, whose role is detailed on page 97 and
98, has meetings at least twice a year with the Company’s
auditor, Ernst & Young LLP.
127Bellway p.l.c. Annual Report and Accounts 2022
Governance
People
The important role that our people perform is described
throughout the Strategic Report. In addition, following
the introduction of Better with Bellway, which is our new
responsible and sustainable approach to our business,
weaim to be an employer of choice, with a safe, diverse,
andinclusive environment. More details are included with
theBetter with Bellway section.
The following disclosures provide additional information
onhow 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
isrecognised 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
Head Office.
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.
This is now further supported by our new sustainable
approach, Better with Bellway, and the ‘Building Quality
Homes, Safely’ pillar. More details can be found within the
Better with Bellway section.
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 Friday 16 December 2022.
Explanatory notes on these resolutions are set out in the
Notice of Meeting of the AGM.
Disclosure of all relevant information to theauditor
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 ofthe
Companies Act 2006.
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.
Directors’ Report continued
Governance
128 Bellway p.l.c. Annual Report and Accounts 2022
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) as adopted by the UK.
In preparing these Financial Statements the Directors are
required to:
• Select suitable accounting policies in accordance with
IAS8Accounting Policies, Changes in Accounting
Estimatesand 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
as adopted by the UK 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 UK adopted 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 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.
The Board consider the annual report and accounts,
taken as a whole, is fair, balanced and understandable,
and provides the information necessary for shareholders
to assess the company’s position, performance, business
modeland strategy.
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 as adopted by the UK, 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
17 October 2022
129Bellway p.l.c. Annual Report and Accounts 2022
Governance
Independent Auditor’s report to the members of Bellway p.l.c.
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 2022 and of the
Group’s profit for the year then ended;
• the Group financial statements have been properly
prepared in accordance with UK adopted international
accounting standards;
• the parent Company financial statements have been
properly prepared in accordance with UK adopted
international accounting standards 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 (the ‘Group’) for the
year ended 31 July 2022 which comprise:
Group Parent Company
Consolidated balance sheet as
at 31 July 2022
Balance sheet as at
31July2022
Consolidated income statement
for the year then ended
Statement of changes
inequity for the year
thenended
Consolidated statement of
comprehensive income for the
year then ended
Statement of cash flows for
the year then ended
Consolidated statement of
changes in equity for the year
then ended
Related notes 1 to 29 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 29 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 UK adopted
international accounting standards 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 believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Independence
We are independent of the Group and parent 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.
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.
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 obtained an
understanding of each of management’s modelled
scenarios, including the base case, the reasonable
downside case and the reverse stress test case. The reverse
stress test case has 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 assessed the appropriateness of the duration of the
going concern assessment period to 31 July 2024 and
considering the existence of any significant events or
conditions beyond this period based on our procedures
on the Group’s business plan, cash flow forecasts and from
knowledge arising from other areas of the audit.
• We obtained management’s going concern calculations,
including the cashflow forecast for the going concern
period through to 31 July 2024 and tested these for
arithmetical accuracy.
• We assessed the historical accuracy of the forecasting and
challenged the appropriateness of the key assumptions
in management’s forecasts, including the impact of
housing completions and average selling price on
revenue generation. We also assessed these against
information from the Office of National Statistics, with
consideration to trends in respect of house price inflation,
noting no contradictory indicators. We considered the
appropriateness of the methods used to calculate the
cash flow forecasts and 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 of going concern.
• We verified inputs into the cash flow forecasts and debt
facility terms and reconciled the liquidity position as at
31 July 2022. We further reviewed borrowing facilities to
confirm both their availability to the Group and the forecast
debt repayments through the going concern assessment
period and to validate that there are only three financial
covenants in relation to the available facilities.
Governance
130 Bellway p.l.c. Annual Report and Accounts 2022
• We obtained the reverse stress testing and downside cases
prepared by management and assessed the plausibility of
these. We did this by challenging the assumptions made
and considering indicators of contradictory evidence.
• We considered any mitigating factors included in the
downside case scenarios 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 reasonable downside model to additional
stress testing to confirm management has considered
a balanced range of outcomes in their assessment of
going concern.
• We assessed management’s considerations related to any
material climate change impacts in the going concern
period, including incorporation of the expected costs of
applying the Future Homes Standard during the period of
going concern assessment.
• 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
appropriately described the assessment management
performed and the key judgements taken.
Our key observations:
• The directors’ assessment forecasts that the Group
will maintain sufficient liquidity throughout the going
concern assessment period in the base case scenario.
Under management’s reverse stress test scenario (which
includes a significant investment in land, increasing land
creditors to £800m, followed by a reduction in private
homes completions of 50% and average selling prices on
private homes reducing by 20% in following 12 months),
liquidity headroom is nearly eliminated in June 2024.
• Other than the impact of the Future Homes Standard,
we have not identified any material climate-related risks
that should be incorporated into the Group’s forecasts to
31 July 2024.
Based on the work we 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 for a period to 31 July 2024 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 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.
and its components.
• The components where we performed
full scope audit procedures accounted
for 99% of profit before tax, adjusted
for the estimated one-off impact of the
£300.0 million Building Safety Pledge
recorded in the year, 99% of Revenue
and 99% of Total assets.
Key audit matters • Inappropriate revenue recognition;
• Inappropriate cost of sales recognition
and valuation of work-in-progress and
land on sites under development; and
• Inappropriate recognition of legacy
building safety improvement provisions.
Materiality • Overall Group materiality of £30.7 million
represents 5% of profit before tax,
adjusted for the estimated one-off
impact of the £300.0 million Building
Safety Pledge recorded in the year.
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, 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 component.
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 11 reporting components of the Group, we
selected 2 components covering entities which represent the
principal business units within the Group.
For the 2 components selected (“full scope components”)
which were selected based on their size or risk characteristics,
we performed an audit of the complete financial information.
The full scope components accounted for 99% (2021: 99%)
of the Group’s profit before tax, adjusted for the estimated
one-off impact of the £300.0 million Building Safety Pledge
recorded in the year, 99% (2021: 99%) of the Group’s Revenue
and 99% (2021: 99%) of the Group’s Total assets.
The remaining 9 components together represent 1% of
the Group’s profit before tax, adjusted for the estimated
one-off impact of the £300.0 million Building Safety Pledge
recorded in the year. 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 8 components were performed concurrently with the
Group audit
131Bellway p.l.c. Annual Report and Accounts 2022
Governance
Changes from the prior year
There are no changes to our scoping from the prior year.
Involvement with component teams
All audit work performed for the purposes of the audit was
undertaken by the Group audit team.
Climate change
There has been increasing interest from stakeholders as to
how climate change will impact Bellway p.l.c. The Group has
determined that the most significant future risks from climate
change on their operations will be from evolving legal and
regulatory requirements (e.g. Updated Part L requirements
within building regulations, the Future Homes Standard and
the Environment Act), market pressures over supply chain
resource shortages and insufficient development of more
efficient products and technologies to deliver climate-resilient
homes. These are explained on pages 34–64 in the Better
with Bellway section, and specifically within pages 46–53
in the required Task Force for Climate related Financial
Disclosures, which form part of the “Other information” rather
than the audited financial statements. Our procedures on
these disclosures therefore consisted solely of considering
whether they are materially inconsistent with the financial
statements, or our knowledge obtained in the course of the
audit or otherwise appear to be materially misstated.
As explained on page 148 in the Basis of Preparation note,
governmental and societal responses to climate change
risks are still developing, and are interdependent upon each
other, and consequently financial statements cannot capture
all possible future outcomes as these are not yet known.
The degree of certainty of these changes may also mean
that they cannot be taken into account when determining
asset and liability valuations and the timing of future cash
flows under the requirements of UK adopted international
accounting standards. In the Task Force for Climate related
Financial Disclosures on pages 50–52 supplementary
narrative explanation of the impact of reasonably possible
changes in key assumptions have been provided.
As part of our audit, we have made enquiries of management
to understand the extent of the potential impact of climate
change risk on the Group’s financial statements. We have
performed a risk assessment of how climate risks facing the
Group, particularly with the requirements to meet evolving
legal and regulatory requirements (e.g. Updated Part L
requirements within building regulations and the Future
Homes Standard) on the valuation of land and work in
progress under development, and understood the Group’s
strategy to address these risks that may affect the financial
statements and our audit. We also held discussions with
our own climate change professionals to challenge our
risk assessment.
On the basis of our risk assessment, our audit effort in
considering climate change was focused on evaluating
management’s assessment of the impact of climate risk,
physical and transition, and ensuring that the effects of
material climate risks disclosed on pages 50-52 have been
appropriately reflected in asset values and associated
disclosures where values are determined through modelling
future cash flows. Specifically, we considered this in the timing
and nature of future cost assumptions underpinning the
valuation of land and work in progress under development.
We did this by understanding how future cost estimates were
included within the site margin calculation in respect of the
costs of applying the updated Part L building regulations
for units without foundations constructed prior to June
2023, and applying the Future Homes Standard for units
without foundations constructed prior to June 2025 (for
full compliance). Details of our procedures and findings on
cost of sales recognition and valuation of work-in-progress
and land on sites under development are included in our
key audit matters below. We also challenged the Directors’
considerations of climate change in their assessment of going
concern and viability and associated disclosures.
We have read the climate related information within the
Annual Report, which included the Group’s adoption
of climate related disclosures as recommended by the
Task Force for Climate related Financial Disclosures and
considered consistency with the financial statements and our
audit knowledge.
Whilst the Group have stated their commitment to the
aspirations of the Paris Agreement to achieve net zero
emissions by 2050, the Group are currently unable to
determine the full future economic impact on their business
model beyond the viability assessment period, operational
plans and customers to achieve this and therefore as set
out above the potential impacts are not fully incorporated in
these financial statements.
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.
Independent Auditor’s report to the members of Bellway p.l.c. continued
Governance
132 Bellway p.l.c. Annual Report and Accounts 2022
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Inappropriate
revenue recognition
Refer to the Audit Committee
Report (page 97); Accounting
policies and Notes 1 and 8 of the
Consolidated Financial Statements
(pages 148, 150 and 158)
The Group has reported:
• Revenues of £3,536.8 million
(2021: £3,122.5 million)
• Trade receivables of
£47.5 million (2021: £17.0 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, 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.
There is no change in our risk
assessment from the prior year.
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
transaction 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 any anomalies and unusual trends
in respect of timing. This work has also 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. We do not
rely on the work performed by internal audit, therefore 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 or
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 Chairs 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.
We did not identify any
evidence of material
misstatement in the
revenue of £3,536.8 million
recognised in the year as
a result of inappropriate
revenue recognition,
application of cut-off or
management override.
133Bellway p.l.c. Annual Report and Accounts 2022
Governance
Risk Our response to the risk
Key observations communicated
to the Audit Committee
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 (pages 100 and 101);
Accounting policies and Notes
3 and 7 of the Consolidated
Financial Statements (pages 153
and 156 to 157)
The Group has reported:
• Cost of sales before net
legacy building safety
expense of £2,749.8 million
(2021: £2,470.6 million)
• Land £2,786.4 million
(2021: £2,483.9 million)
• Work-in-progress
of £1,524.8 million
(2021: £1,431.4 million)
• Showhomes £107.0 million
(2021: £115.1 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.
There is no change in our risk
assessment from the prior year.
Walkthrough and controls
• We performed a walkthrough of management’s transaction
controls in place covering the monitoring and updating of
certain site valuations to assess design effectiveness.
• We attended and observed the valuation meeting at
12 divisions held closest to year end. As part of this, we
observed the level of review applied by management in
evaluating assumptions within site valuations.
• We confirmed that management action logs were reviewed
at 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.
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 and
considering the impact of trends in house price inflation.
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 also obtained
supporting correspondence with suppliers in respect of price
increases and variations where relevant.
• We enquired of management regarding their assessment
of the impact of climate change on the forecast costs to
complete. In order to assess the reasonableness of their
assumptions, we selected a sample of sites with construction
phases beyond FY23, to assess for those sites impacted
by the Future Homes Standard and/or Part L of updated
building regulations, that the application of future homes
cost assumptions were appropriately reflected within
the valuations.
• 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 FY22 and compared the final site margin to the
previous quarterly valuation.
We are satisfied the cost of
sales margin and valuation
of WIP and land on sites
under development
is appropriate.
• 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.
• We performed inquiries of Regional Chairmen and the
Divisional Director teams to further understand any other
specific risks.
Independent Auditor’s report to the members of Bellway p.l.c. continued
Governance
134 Bellway p.l.c. Annual Report and Accounts 2022
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Inappropriate recognition
of legacy building safety
improvement provisions
Refer to the Audit Committee
Report (pages 98); Accounting
policies and Notes 2 and 10 of the
Consolidated Financial Statements
(pages 151 and 159)
The Group has reported:
• Net legacy building safety
provision of £441.5m
(2021: £115.5m)
• Net legacy building safety
expense of £346.2 million
(2021: £51.8 million)
There is estimation uncertainty
and subjectivity in determining
the most likely costs which will
be required in order to remediate
affected properties based on the
latest legal interpretation and
government guidance.
The risk has increased in the
current year due to changes
in government guidance and
a significant increase in the
quantum of the Group’s provision.
Walkthrough and controls
• We performed a walkthrough of management’s transaction
controls in place over monitoring and updating the
legacy building safety improvement provision to assess
design effectiveness.
• We attended the fire panel meeting closest to year end
for divisions identified with actual or potential remediation
obligations. As part of this, we observed the level of review
applied by management in evaluating the status of live
and pending projects (known claims) and challenging
assumptions, including estimates provided by third party
consultants. underpinning the amounts recognised relating
to live projects within management’s provision calculation.
Understanding basis for recognition of provision
• We read and understood the relevant laws and regulations
including recently published government guidance.
• We reviewed management’s fire project accounting paper
to understand management’s rationale which supports the
recognition of a provision. We obtained an understanding
of management’s commitment through the Building Safety
Pledge, to fund, undertake or procure, at its own cost, all
necessary remediation or mitigation work to address life-
critical fire safety arising from the design, construction or
refurbishment defects on buildings above 11 metres which
Bellway played a role in developing or refurbishing that have
been built over the last 30 years.
• We challenged management’s assessment against the
requirements of IAS 37, agreed assumptions to third
party support such as correspondence with external fire
consultants, where applicable
Based on the procedures
performed, including
testing of key movements,
direct inquiry of
management’s expert and
engaging EY Insurance
Risk and Actuarial
specialists in the audit of
assumptions underpinning
management’s provision
calculation, we are satisfied
that the resultant year end
net provision of £441.5m is
fairly stated.
Testing the basis of management’s provision calculation
• We obtained management’s fire provision schedule showing
the brought forward fire provision, amounts spent and
recovered, amounts further provided or released, new sites,
additional amounts recognised in respect of the Building
Safety Pledge and final year end provision, and understood
significant movements.
• We performed procedures on sites with known claims.
We tested movements in the year, agreeing significant
costs and recoveries to supporting documentation and
agreed assumptions to third party support where available.
We tested items of cash spend incurred in the year in excess
of our testing threshold to supporting invoices, contractor
certification or payment applications.
• We obtained an understanding the methodology of
valuation reports, through discussion with external
consultants. This was in order to understand and challenge
the basis of estimates made and to discuss the status of
the most material provisions. We assessed the scope of
the consultants work in accordance with government
guidance. As part of our procedures, we assessed the
objectivity, experience and competency of management’s
external specialist.
135Bellway p.l.c. Annual Report and Accounts 2022
Governance
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Testing the basis of management’s provision
calculation continued
• We performed testing on management’s assumptions, with
support from EY Insurance Risk and Actuarial specialists,
regarding the costs of remediation per plot, the number
of plots to be remediated, the time period for the work
to be completed and the discount factor applied to the
overall provision.
• We performed sensitivity analysis on the provision in order to
establish whether these could give rise to material variances.
• In order to assess the completeness of properties identified
within management’s calculation, we reconciled the
number of legally completed plots in the last 30 years to
management records. For a sample of completions, we
performed audit testing to external sources to corroborate
that these properties are appropriately included.
• We further performed divisional inquiries with all Regional
Chairs and Divisional Finance teams to understand
latest obligations. We did not identify any further known
or potential issues to be included in management’s
provision calculation.
Disclosures within the financial statements
• We assessed the appropriateness of the disclosures included
within the Financial Statements in relation to provisions
and contingent liabilities, including the disclosure of the
assumptions and associated sensitivities in relation to the key
sources of estimation uncertainty.
In the current year we included a new key audit matter in
relation to risk in respect of inappropriate recognition of the
legacy building safety improvement provision. As a result of
evolving government legislation/guidance and the significant
increase in the quantum of the Group’s provision, we have
introduced this as a key audit matter.
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 final materiality for the Group to be
£30.7 million (2021: £23.1 million), which is 5% of profit
before tax, adjusted for the estimated one-off impact of the
£300.0 million Building Safety Pledge recorded in the year
(2021: 5% of Profit before tax). We believe that profit before
tax, adjusted for the impact of the estimated £300.0 million
Building Safety Pledge recorded in the year, provides us
with an appropriate basis of materiality that is appropriately
focused on the users of the financial statements. The basis for
materiality has changed year on year to adjust for the current
year one-off impact of the Building Safety Pledge.
We determined materiality for the parent Company to be
£2.2 million (2021: £2.6 million), which is 0.5% (2021: 0.5%) of
Total assets.
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 our risk assessments, together with our
assessment of the Group’s overall control environment,
our judgement was that performance materiality was 75%
(2021: 50% due to first year audit) of our planning materiality,
namely £23.0 million (2021: £11.6 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 £4.6 million to £21.9 million (2021: £1.3 million
to £8.7 million).
Independent Auditor’s report to the members of Bellway p.l.c. continued
Governance
136 Bellway p.l.c. Annual Report and Accounts 2022
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 £1.5 million
(2021: £1.1 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 set out on pages 1 to 129, 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.
Our opinion on the financial statements dœs 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 this gives rise to 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.
Matters on which we are required to report
byexception
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
We have reviewed 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 by the
Listing Rules.
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 77;
• 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 77;
• Director’s statement on whether it has a reasonable
expectation that the Group will be able to continue in
operation and meets its liabilities set out on pages 128
and 129;
• Directors’ statement on fair, balanced and understandable
set out on page 129;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
pages 79 to 83;
• The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 103; and;
• The section describing the work of the audit committee set
out on pages 97 to 105.
137Bellway p.l.c. Annual Report and Accounts 2022
Governance
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 128, 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.
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 (UK adopted international accounting standards,
the Companies Act 2006 and UK Corporate Governance
Code), tax legislation, employment law, health and safety
legislation, fire and building safety legislation including
Building Safety Pledge.
• 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 was
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.
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 ending 31 July
2021 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals
and reappointments is 2 years.
• The audit opinion is consistent with the additional report to
the Audit Committee.
Independent Auditor’s report to the members of Bellway p.l.c. continued
Governance
138 Bellway p.l.c. Annual Report and Accounts 2022
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
17 October 2022
139Bellway p.l.c. Annual Report and Accounts 2022
Governance
Accounts
Primary statements
Group Income Statement 142
Group Statement of Comprehensive Income 143
Statements of Changes in Equity 144
Balance Sheets 146
Parent Company Income Statement 146
Cash Flow Statements 147
Accounting Policies
Basis of preparation 148
Going concern 148
Effect of new standards and interpretations effective
for the first time
149
Standards and interpretations in issue but not
yet effective
149
Notes to the Financial Statements
Notes to the Financial Statements 150
Performance for the year
1. Revenue 150
2. Net legacy building safety expense 151
3. Cost of sales recognition 153
4. Operating profit 153
4a. Part-exchange properties 153
4b. Operating profit is stated after charging/(crediting) 153
4c. Auditor’s remuneration 153
5. Earnings per ordinary share 154
Taxation
6. Taxation 154
6a. Income tax recognised in the income statement 154
6b. Tax recognised in equity and other
comprehensive income
155
6c. Deferred taxation 155
Working capital
7. Inventories 156
8. Trade and other receivables 158
9. Trade and other payables 158
10. Provisions and reimbursement assets 159
Investingactivities
11. Property, plant and equipment 161
12. Financial assets and equity accounted joint
arrangements, and investments in subsidiaries
162
13. Joint arrangements 163
14. Commitments 163
Financing
15. Net cash 164
15a. Reconciliation of net cash flow to net cash 164
15b. Analysis of net cash 164
16. Finance income and expenses 165
17. Financial instruments 165
Shareholder capital
18. Issued capital 167
19. Reserves 168
20. Dividends on equity shares 168
140 Bellway p.l.c. Annual Report and Accounts 2022
Directors and employees
21. Employee information 169
22. Retirement benefit asset 169
23. Share based payments 172
Contingencies, related parties
andsubsidiaries
24. Contingent liabilities 174
25. Related party transactions 174
26. Group undertakings 175
27. Resident management companies 176
Other information
28. Alternative performance measures 183
29. Post balance sheet events 186
Five year record 187
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.
141Bellway p.l.c. Annual Report and Accounts 2022
Group Income Statement
for the year ended 31 July 2022
Note
2022
£m
2021
£m
Revenue 1 3,536.8 3,122.5
Cost of sales 3 (3,094.0 ) (2,522.4 )
Analysed as:
Underlying cost of sales (2,749 .8 ) (2,470.6 )
Adjusting item: net legacy building safety expense 2 (344.2 ) (51.8 )
Gross profit 442.8 600.1
Other operating income 4 25.3 54.6
Other operating expenses 4 (25.1 ) (54.9 )
Administrative expenses (134.0 ) (120.1 )
Operating profit 4 309.0 479.7
Finance income 16 1.6 0.6
Finance expenses 16 (15.7 ) (11.7 )
Analysed as:
Underlying finance expenses (13.7 ) (11.7 )
Adjusting item: unwinding of discount on the legacy building safety provision 2 (2.0 ) –
Share of result of joint ventures 13 9.3 10.4
Profit before taxation 304.2 4 79. 0
Income tax expense 6 (61.6 ) (88.3 )
Profit for the year* 242.6 390.7
Earnings per ordinary share – Basic 5 196.9 p 316.9 p
Earnings per ordinary share – Diluted 5 196.2 p 315.8 p
* All attributable to equity holders of the parent.
Adjusting items
Note
2022
£m
2021
£m
Gross profit
Gross profit per the Group Income Statement 442.8 600.1
Adjusting item: net legacy building safety expense 2 344.2 51.8
Underlying gross profit 787 .0 651.9
Operating profit
Operating profit per the Group Income Statement 309 .0 479 .7
Adjusting item: net legacy building safety expense 2 344.2 51.8
Underlying operating profit 653.2 531.5
Profit before taxation
Profit before taxation per the Group Income Statement 304.2 47 9.0
Adjusting item: net legacy building safety expense 2 346.2 51.8
Underlying profit before taxation 650 .4 530.8
Profit for the year
Profit for the year per the Group Income Statement 242.6 390.7
Adjusting item: net legacy building safety expense 2 346.2 51.8
Adjusting item: tax on net legacy building safety expense 2 (70.3 ) (9.8 )
Underlying profit for the year 518.5 432.7
Accounts
142 Bellway p.l.c. Annual Report and Accounts 2022
Group Statement of Comprehensive Income
for the year ended 31 July 2022
Note
2022
£m
2021
£m
Profit for the period 242.6 390.7
Other comprehensive (expense)/income
Items that will not be recycled to the income statement:
Remeasurement (losses)/gains on defined benefit pension plans 22 (3.5 ) 8.5
Income tax on other comprehensive expense/(income) 6 0.5 (2.2 )
Other comprehensive (expense)/income for the period, net of income tax (3.0 ) 6.3
Total comprehensive income for the period
*
* All attributable to equity holders of the parent.
143Bellway p.l.c. Annual Report and Accounts 2022
Accounts
Statements of Changes in Equity
at 31 July 2022
Group Note
Issued
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1 August 2020 15.4 178.4 20.0 1.5 2,778.7 2,994.0
Total comprehensive income
forthe period
Profit for the period – – – – 390.7 390.7
Other comprehensive income
*
Total comprehensive income
forthe period – – – – 3 9 7. 0 3 9 7. 0
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares 20 – – – – (104.7 ) (104.7 )
Purchase of own shares 19 – – – – (2.5 ) (2.5 )
Shares issued 18 – 1.4 – – – 1.4
Credit in relation to share options
and tax thereon
6, 23 – – – – 2.6 2.6
Total contributions by and
distributions to shareholders
Balance at 31 July 2021 15.4 179.8 20.0 1.5 3,071.1 3,287 .8
Total comprehensive income for
the period
Profit for the period – – – – 242.6 242.6
Other comprehensive expense
*
Total comprehensive income
forthe period – – – – 239.6 239.6
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares 20 – – – – (157 .2 ) (157 .2 )
Purchase of own shares 19 – – – – (7 .4 ) (7 .4 )
Shares issued 18 – 2.2 – – – 2.2
Credit in relation to share
optionsand tax thereon
6, 23 – – – – 2.8 2.8
Total contributions by and
distributions to shareholders
Balance at 31 July 2022 15.4 182.0 20.0 1.5 3, 148.9 3,367 .8
* An additional breakdown is provided in the Group Statement of Comprehensive Income.
Accounts
144 Bellway p.l.c. Annual Report and Accounts 2022
Company Note
Issued
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1 August 2020 15.4 178.4 20.0 2.1 307.1 523.0
Total comprehensive income
forthe period
Profit for the period – – – – 185.5 185.5
Other comprehensive income – – – – – –
Total comprehensive income
forthe period – – – – 185.5 185.5
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares 20 – – – – (104.7) (104.7)
Purchase of own shares 19 – – – – (2.5) (2.5)
Shares issued 18 – 1.4 – – – 1.4
Credit in relation to share options 23 – – – – 2.6 2.6
Total contributions by and
distributions to shareholders
– 1.4 – – (104.6) (103.2)
Balance at 31 July 2021 15.4 179.8 20.0 2.1 388.0 605.3
Total comprehensive income for
the period
Profit for the period – – – – 159.9 159.9
Other comprehensive income – – – – – –
Total comprehensive income
forthe period – – – – 159.9 159.9
Transactions with shareholders
recorded directly in equity:
Dividends on equity shares 20 – – – – (157.2) (157.2)
Purchase of own shares 19 – – – – (7.4) (7.4)
Shares issued 18 – 2.2 – – – 2.2
Credit in relation to share options 23 – – – – 3.1 3.1
Total contributions by and
distributions to shareholders
– 2.2 – – (161.5) (159.3)
Balance at 31 July 2022 15.4 182.0 20.0 2.1 386.4 605.9
145Bellway p.l.c. Annual Report and Accounts 2022
Accounts
Balance Sheets
at 31 July 2022
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 £159.9 million (2021 – £185.5 million).
Note
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
ASSETS
Non-current assets
Property, plant and equipment 11 34.2 35.7 – –
Investments in subsidiaries 12 – – 43.5 40.4
Financial assets 12 20.9 3 9.6 – –
Equity accounted joint arrangements 12 9. 3 15.7 – –
Deferred tax assets 6 0.1 0. 9 – –
Retirement benefit assets 22 7.1 10.2 – –
Current assets
Inventories 7 4,423.6 4,032.2 – –
Trade and other receivables 8 114.6 82.2 509.7 512.3
Cash and cash equivalents 15 375.3 460.3 52.8 52.8
Total assets 4,985.1 4,676.8 606.0 605.5
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 15 130.0 130.0 – –
Trade and other payables 9 106.6 89 .7 – –
Deferred tax liabilities 6 8.9 8.2 – –
Provisions 10 400.8 8 9.0 – –
Current liabilities
Corporation tax payable 0 .1 4 .0 – –
Trade and other payables 9 930.2 1,041.1 0.1 0.2
Provisions 10 40.7 2 7. 0 – –
Total liabilities 1,617 .3 1,389.0 0.1 0.2
Net assets 3,367 .8 3,287 .8 605.9 605.3
EQUITY
Issued capital 18 15.4 15.4 15.4 15.4
Share premium 19 182.0 179.8 182.0 179.8
Capital redemption reserve 19 20.0 2 0.0 20.0 20.0
Other reserves 1.5 1.5 2.1 2.1
Retained earnings 3, 148.9 3,071.1 386.4 388.0
Total equity 3,367 .8 3,287 .8 605.9 605.3
Approved by the Board of Directors on 17 October 2022 and signed on its behalf by:
John Tutte Keith Adey
Director Director
Registered number 1372603
Accounts
146 Bellway p.l.c. Annual Report and Accounts 2022
Cash Flow Statements
for the year ended 31 July 2022
Note
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Cash flows from operating activities
Profit for the year 242. 6 390.7 159.9 185.5
Depreciation charge 11 6.1 6.5 – –
Profit on sale of property, plant and equipment 4 – (0.7 ) – –
Finance income 16 (1.6 ) (0.6 ) – –
Finance expenses 16 15.7 11.7 – –
Share-based payment expense 23 3 .1 2 .6 – –
Share of post tax result of joint ventures 13 (9.3 ) (10.4 ) – –
Income tax expense 6 61.6 88.3 – –
Increase in inventories (391.4 ) (160.3 ) – –
(Increase)/decrease in trade and other receivables (33.2 ) (12.0 ) 2.6 (79.5)
(Decrease)/increase in trade and other payables (104.5 ) 158.1 (0.1) (0.1)
Increase in provisions 325.5 45.7 – –
Cash from operations 114.6 519.6 162.4 105.9
Interest paid (5.8 ) (3.0 ) – –
Income tax paid (63.8 ) (84.1 ) – –
Net cash inflow from operating activities 45.0 432.5 162.4 105.9
Cash flows from investing activities
Acquisition of property, plant and equipment (0.5 ) (3.3 ) – –
Proceeds from sale of property, plant and equipment 0.1 1.5 – –
Increase in loans to joint ventures 12 (2.1 ) (17 .1 ) – –
Repayment of loans by joint ventures 12 21.6 33.0 – –
Dividends from joint ventures 12 15.7 – – –
Acquisition of joint operation – (8.9 ) – –
Interest received 0.5 0. 4 – –
Net cash inflow from investing activities 35.3 5.6 – –
Cash flows from financing activities
Decrease in bank borrowings – (50.0 ) – –
Increase in fixed rate sterling USPP notes – 130.0 – –
Payment of lease liabilities (2.9 ) (3.4 ) – –
Proceeds from the issue of share capital on exercise of
shareoptions 2.2 1.4 2.2 1.4
Purchase of own shares (7 .4 ) (2.5 ) (7.4) (2.5)
Dividends paid 20 (157 .2 ) (104.7 ) (157.2) (104.7)
Net cash outflow from financing activities (165.3 ) (29.2 ) (162.4) (105.8)
Net (decrease)/increase in cash and cash equivalents (85.0 ) 408.9 – 0.1
Cash and cash equivalents at beginning of year 460.3 51.4 52.8 52.7
Cash and cash equivalents at end of year 15 375.3 460.3 52.8 52.8
147Bellway p.l.c. Annual Report and Accounts 2022
Accounts
Accounting Policies
Basis of preparation
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.
The consolidated Group financial statements have been prepared and approved by the Directors in accordance
with UK adopted International Accounting Standards (‘IAS’) and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards.
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 17 October 2022, 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.
In preparing the Group and Company financial statements, management has considered the impact of climate change,
and the possible impact of climate-related and other emerging business risks. A rigorous assessment of the impact of
climate-related risks has been performed, disclosed in the Strategic Report, in accordance with the recommendations of
the Task Force on Climate-related Financial Disclosures. This included an assessment of inventories and how they could
be affected by measures taken to address global warming. No issues were identified that would materially impact the
carrying values of the Group’s assets or liabilities, or have any other material impact on the 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 been applied consistently to all
periods presented in these consolidated financial statements.
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 26 to 29. 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 30 to 33 and the Directors’ Report on pages 126 to 129. The Risk Management section on pages
75 to 78 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 2022, Bellway had net cash of £245.3 million
2
(note 15), having utilised cash of £85.0 million (note 15) during
the year, including £114.6 million of cash generated 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 £400.0 million at
31 July 2022, expiring in tranches up to December 2025. Furthermore, in February 2021 the Group entered into a
contractual arrangement 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, which has maturity dates in 2028 and 2031. In aggregate,
the Group had committed debt lines of £530.0 million at 31 July 2022.
Including committed debt lines and cash, Bellway had access to total funds of £775.3 million, along with net current
assets (excluding cash) of £3,567.2 million at 31 July 2022, providing the Group with appropriate liquidity to meet its
current liabilities as they fall due.
Accounts
148 Bellway p.l.c. Annual Report and Accounts 2022
Going concern continued
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 FY23 are supported by the strong forward order book, but still fall to 84% of that achieved
in H1 of FY22. In the 12 months to 31 January 2024, private completions reduce by around 50% compared to
the 12 month pre-stress peak achieved in FY22. This is followed by a gradual recovery based on the lower
base position.
• Private average selling price in H1 FY23 remains in line with internal forecasts due to the strong order book position.
In the 12 months to 31 January 2024, 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.
• These assumptions reflect the Group’s experience in the 2008-09 Global Financial Crisis.
A number of prudent mitigating actions within the Directors’ control 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 reducing in line with housing revenue.
• Dividends reducing in line with earnings.
The sensitivity analysis was modelled over the period to 31 July 2024 for the going concern assessment, but
extended to the 31 July 2026 for the Directors’ viability assessment. In addition to the above, 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.
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. In relation to climate risks, and in particular the requirement of the Group to
reduce carbon emissions, the going concern assessment is not considered to be materially affected by the Future
Homes Standard.
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 Company will have sufficient funds
to continue to meet its liabilities as they fall due for the period to 31 July 2024, 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.
Effect of new standards and interpretations effective for the first time
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK adopted
international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board.
The Group transitioned to UK adopted international accounting standards in its consolidated financial statements on 1 August
2021, with this change constituting a change in accounting framework. There was no impact on recognition, measurement or
disclosure in the period reported as a result of the change in framework, or changes in accounting policies from the transition.
The Group adopted and applied the following amendments in the year, which are relevant to its operations, none of which had
a material impact on the financial statements:
• Interest Rate Benchmark Reform – Phase 2 – amendments to IFRS 9 ‘Financial Instruments’, IAS 39 ‘Financial Instruments:
Recognition and Measurement’, IFRS 7 ‘Financial Instruments: Disclosures’, IFRS 4 ‘Insurance Contracts’ and IFRS 16 ‘Leases’.
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.
149Bellway p.l.c. Annual Report and Accounts 2022
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.
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 into 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 macrœconomic 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 30 to 33. The Board dœs 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.
Accounts
150 Bellway p.l.c. Annual Report and Accounts 2022
1. Revenue continued
Revenue from contracts with customers
An analysis of the Group’s revenue is as follows:
2022
£m
2021
£m
Housing revenue 3,520.6 3,107.1
Non-housing revenue 16.2 15.4
Total revenue 3,536.8 3,122.5
The Group’s housing revenue can be analysed as follows:
(a) Private/social
2022
£m
2021
£m
Private 3,190.9 2,737.3
Social 329.7 369.8
Total housing revenue 3,520.6 3,107.1
(b) North/South
2022
£m
2021
£m
North 1,543.9 1,295.7
South 1,976.7 1,811.4
Total housing revenue 3,520.6 3,107.1
2. Net legacy building safety expense
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 and the accounting
requirements of IAS 1 ‘Presentation of Financial Statements’ relating to the separate disclosure of material items of
income or expense.
For the years ended 31 July 2022 and 31 July 2021, the Directors considered that the net legacy building safety
expense satisfied the requirements to be separately disclosed on the face of the income statement.
Profit before taxation for the years ended 31 July 2022 and 31 July 2021 has been arrived at after recognising the following items
in the income statement:
2022
£m
2021
£m
Net legacy building safety expense (note 10) - cost of sales 344.2 51.8
Net legacy building safety expense (note 10, 16) – finance expenses 2.0 –
Total net legacy building safety expense 346.2 51.8
The income tax rate applied to the total net legacy building safety expense in the income statement is the Group’s standard rate
of corporation tax, 20.3% (2021 – 19.0%).
151Bellway p.l.c. Annual Report and Accounts 2022
Accounts
2. Net legacy building safety expense continued
Bellway’s continued commitment to act responsibly with regards to fire safety is reflected by the level of our prudent provisions
and the actions the Group has taken since the tragic events at Grenfell in 2017. Government guidance and regulations in relation
to legacy building safety have evolved since 2017 and apartment blocks are now to be assessed in accordance with the Publicly
Available Specification (‘PAS’) 9980:2022, produced by the British Standards Institute.
In the first half of the year ended 31 July 2022 the Group set aside £19.6 million, net of recoveries, for legacy safety improvements,
bringing the total provided in the period between 2017 and up to 31 January 2022 to £186.8 million. These are in relation to
apartment buildings over 11 metres in height, which were generally built within our 10-to-12 year warranty period.
On 7 April 2022, as part of the Building Safety Pledge (the ‘Pledge’), we announced that this commitment would be extended
to a 30-year period to include buildings constructed by the Group since 5 April 1992 and to reimburse the Building Safety
Fund and the ACM Fund in accordance with the principles set out in the Pledge. The Group entered into this commitment
acknowledging that resident safety is of paramount importance and an additional £326.6 million, net of recoveries, was set aside
in the second half of financial year 2022.
In total, for the year ended 31 July 2022 Bellway set aside a net exceptional expense of £346.2 million, in relation to legacy
building safety improvements. The net charge comprises a gross expense of £347.0 million, less recoveries of £2.8 million, and
an adjusting finance expense of £2.0 million in relation to the unwinding of the discount of the provision to present value.
While the Pledge relates to developments in England-only, Bellway has taken a responsible, UK-wide approach to also provide
for works in relation to the small number of apartment buildings the Group has developed in Scotland and Wales, where
remediation is required. Taking this into consideration, the total amount Bellway has set aside for UK legacy building safety since
2017 is £513.7 million. Costs have been provided regardless of whether Bellway still retains ownership of the freehold interest in
the building or whether warranty providers have a responsibility to carry out remedial works.
Although the application of the PAS is still under consideration by both the Group and the wider industry, the Board
nevertheless believes that the level of provision is robust. It has been calculated using cost estimates based on our extensive
experience to date, using analysis of previously tendered works and prudent, professional estimates based on knowledge of
known issues. In addition, on developments where full investigations have not yet been undertaken or cost reports obtained,
costs to date on similar developments have been used to estimate the likely cost. We have also made assumptions with regards
to the likely cost of resolving potential issues, that we have not yet been made aware of, on schemes covered by the extended
30-year period.
The provision calculation uses the expected timings of cash outflows which are adjusted for future estimated cost inflation
in accordance with the Build Cost Information Service (‘BCIS’) index, a leading provider of cost and price information to the
construction industry. The provision is discounted back to a present value using UK gilt rates with maturities which reflect the
expected timing of cash outflows. The unwinding of this discount is charged through the income statement as an adjusting
finance expense.
The majority of the cash outflow is expected to be over the next five years, although there will be some residual expenditure
beyond this. The anticipated timing reflects the complex issues around remediation including identifying the works required,
design and planning obligations, interpretation of PAS, liaison and negotiations with building owners, and appointment
of contractors.
Notwithstanding these complexities the Group has made good progress with work now completed on 6 developments,
underway on 15 developments and works due to commence on a further 3 developments by the end of the calendar year.
Total recoveries recognised since 2017 are £30.0 million. Reimbursement assets of £nil (2021 – £0.5 million) remain outstanding at
the period end.
Notes to the Financial Statements continued
Accounts
152 Bellway p.l.c. Annual Report and Accounts 2022
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
dœs 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
around2.6%.
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 at the fair value of the part-exchange
property plus the cash received or receivable (note 1). 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)
2022
£m
2021
£m
Staff costs (note 21) 193.1 184.4
Depreciation of property, plant and equipment (note 11) 6.1 6.5
Hire of plant and machinery 17.1 15.2
Profit on sale of property, plant and equipment – (0.7)
4c. Auditor’s remuneration
2022
£000
2021
£000
Audit of these financial statements 64 60
Amounts receivable by the auditor and its associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation 370 333
Pension scheme audit 17 15
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 amount paid to the auditor for the audit of financial statements of joint ventures is £0.020 million
(2021 – £0.015 million).
153Bellway p.l.c. Annual Report and Accounts 2022
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
2022
£m
Weighted
average
number of
ordinary
shares
2022
No.
Earnings
pershare
2022
p
Earnings
2021
£m
Weighted
average
number of
ordinary
shares
2021
No.
Earnings per
share
2021
p
For basic earnings per ordinary share 242.6 123,227,544 196.9 390.7 123,306,035 316.9
Dilutive effect of options and awards 416,029 (0.7) 411,633 (1.1)
For diluted earnings per ordinary share 242.6 123,643,573 196.2 390.7 123,717,668 315.8
Taxation
6. Taxation
Taxation
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
2022
£m
2021
£m
Current tax expense:
UK corporation tax 56.8 89.8
Residential property developer tax for the year 3.5 –
Adjustments in respect of prior years (0.4) (2.8)
59.9 87.0
Deferred tax expense:
Origination and reversal of temporary differences 0.8 0.1
Effect of introduction of residential property developer tax 0.8 –
Increase in tax rate – 1.1
Adjustments in respect of prior years 0.1 0.1
1.7 1.3
Total income tax expense in income statement 61.6 88.3
Notes to the Financial Statements continued
Accounts
154 Bellway p.l.c. Annual Report and Accounts 2022
6. Taxation continued
2022
%
2022
£m
2021
%
2021
£m
Reconciliation of effective tax rate:
Profit before taxation 304.2 479.0
Tax calculated at UK corporation tax rate 20.3 61.8 19.0 91.0
Non-taxable income and enhanced deductions (0.2) (0.7) (0.2) (1.1)
Remeasurement of deferred tax due to the increase in tax rate – – 0.2 1.1
Adjustments in respect of prior years – current tax (0.1) (0.4) (0.6) (2.8)
– deferred tax – 0.1 – 0.1
Effect of residential property developer tax – deferred tax 0.2 0.8 – –
Effective tax rate and tax expense for the year 20.2 61.6 18.4 88.3
The effective tax expense is 20.2% of profit before taxation (2021 – 18.4%).
The Finance Act 2022 received Royal Assent in February 2022 introducing a new residential property developer tax (‘RPDT’)
which was effective from 1 April 2022 and is chargeable at 4% of profits generated from residential property development in
excess of an annual threshold. RPDT was introduced by HM Treasury to obtain a contribution from the UK’s largest residential
property developers towards the cost of remediating defective cladding in the UK’s high-rise housing stock and is expected to
remain in force for up to ten years. RPDT will apply to the majority of the Group’s profits. Both the standard tax rate and effective
tax rate include RPDT.
It is expected that the Group’s standard rate of tax, including RPDT, for the year ending 31 July 2023 will be around 25%.
6b. Tax recognised in equity and other comprehensive income
2022
£m
2021
£m
Deferred tax recognised directly in equity and other comprehensive income:
Credit/(charge) relating to remeasurements on the defined benefit pension scheme 0.5 (2.2)
Charge relating to equity-settled transactions (0.3) –
6c. Deferred taxation
The following are the deferred tax assets/(liabilities) recognised by the Group and the movements thereon during the current
and prior year:
Group
Capital
allowances
£m
Retirement
benefit assets
£m
Share-based
payments
£m
Inventory
£m
Total
£m
At 1 August 2020 (0.5) (0.3) 0.5 (1.8) (2.1)
Arising on acquisition of joint operation – – – (1.7) (1.7)
Income statement (charge)/credit (0.6) (0.1) 0.4 (1.0) (1.3)
Charge to statement of comprehensiveincome – (2.2) – – (2.2)
At 31 July 2021 (1.1) (2.6) 0.9 (4.5) (7.3)
Income statement charge (0.5) – (0.5) (0.7) (1.7)
Credit to statement of comprehensiveincome – 0.5 – – 0.5
Charge to equity – – (0.3) – (0.3)
At 31 July 2022 (1.6) (2.1) 0.1 (5.2) (8.8)
155Bellway p.l.c. Annual Report and Accounts 2022
Accounts
6. Taxation continued
The following is an analysis of the deferred tax balances for financial reporting purposes:
2022
£m
2021
£m
Share-based payments 0.1 0.9
Deferred tax assets 0.1 0.9
Capital allowances (1.6) (1.1)
Retirement benefit assets (2.1) (2.6)
Inventory (5.2) (4.5)
Deferred tax liabilities (8.9) (8.2)
Net deferred tax liability (8.8) (7.3)
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. The deferred tax assets/(liabilities) have
been revalued at 29% following the introduction of RPDT on 1 April 2022. The deferred tax assets/(liabilities) were previously
recognised at 25% to take into account the increase in the UK corporation tax rate from 1 April 2023 that was substantively
enacted in May 2021.
It is expected that the Group’s standard rate of tax, including RPDT, for the year ending 31 July 2023 will be around 25%.
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.
Notes to the Financial Statements continued
Accounts
156 Bellway p.l.c. Annual Report and Accounts 2022
7. Inventories continued
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 2022 and 31 July 2021, 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.
Group
2022
£m
2021
£m
Land 2,786.4 2,483.9
Work-in-progress 1,524.8 1,431.4
Showhomes 107.0 115.1
Part-exchange properties 5.4 1.8
4,423.6 4,032.2
Inventories of £2,693.7 million were expensed in the year (2021 – £2,421.1 million).
In the ordinary course of business, inventories have been written off by a net £4.8 million in the year (2021 – £1.5 million).
Land with a carrying value of £295.6 million (2021 – £278.9 million) was used as security for land payables (note 9).
Land includes £1,812.3 million (2021 – £1,808.4 million) which is owned or unconditionally contracted by the Group and where
there is an implementable detailed planning permission.
During the current year, the Group acquired 100% of the share capital of a private limited company to access land interests of
£8.4 million. During the prior year, the Group acquired 100% of the share capital of two private limited companies to access
land interests of £19.8 million. These acquisitions did not satisfy the requirements of a business combination, therefore the land
relating to these amounts are included in ‘land’ in the above table.
The adoption of the Future Homes Standard in 2025, and the interim standard in 2023, is not considered to have a material
effect on the carrying value of inventories as at 31 July 2022.
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.
157Bellway p.l.c. Annual Report and Accounts 2022
Accounts
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
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Trade receivables 47.5 17.0 – –
Other receivables 59.2 58.1 – –
Amounts owed by Group undertakings – – 509.7 512.3
Prepayments and accrued income 7.9 7.1 – –
114.6 82.2 509.7 512.3
The Group assesses the ageing of trade receivables in accordance with the policy on page 148. None of the trade receivables
are past their due dates (2021 – £nil), and are therefore all rated as low risk.
Other receivables includes £43.7 million (2021 – £38.6 million) in relation to VAT recoverable and £nil (2021 – £0.5 million) of
reimbursement assets (note 10).
Included within prepayments and accrued income are non-current prepayments of £0.5 million (2021 – £nil).
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.
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.
Notes to the Financial Statements continued
Accounts
158 Bellway p.l.c. Annual Report and Accounts 2022
9. Trade and other payables continued
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
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Land payables 92.3 75.4 – –
Lease liabilities 14.3 14.3 – –
106.6 89.7 – –
Land payables of £60.8 million (2021 – £48.7 million) are secured on the land to which they relate.
The carrying value of the land used for security is £59.9 million (2021 – £48.1 million).
Current liabilities
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Trade payables 284.0 324.3 – –
Land payables 301.1 380.4 – –
Social security and other taxes 7.2 5.6 – –
Other payables 9.2 9.8 0.1 0.2
Lease liabilities 2.9 2.9 – –
Accrued expenses 147.6 133.1 – –
Payments on account 178.2 185.0 – –
930.2 1,041.1 0.1 0.2
Land payables of £240.1 million (2021 – £234.4 million) are secured on the land to which they relate.
The carrying value of the land used for security is £235.7 million (2021 – £230.8 million).
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 2021 have been recognised as revenue in the current year. The approximate
transaction value allocated to the performance obligations that are unsatisfied at 31 July 2022 is £2,114.3 million
2
(2021 – £2,022.3 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 either due to known
data or based on historical data and a weighting of possible outcomes against their associated probabilities.
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 using a UK risk free discount rate reflecting the period of
the expected cashflow, 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 24).
159Bellway p.l.c. Annual Report and Accounts 2022
Accounts
10. Provisions and reimbursement assets continued
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 or investigative stage on most affected
sites. These estimates may change over time as further information is assessed, building works progress and the
interpretation of the scope of the Pledge or fire safety regulations further evolve. If:
• cost estimates increase by 5%, the provision at 31 July 2022 would increase by around £22 million.
• the discount rate increases by 100 bps, the provision at 31 July 2022 would decrease by around £12 million.
Group
Legacy
building safety
improvements
provision
£m
Reimbursement
assets
£m
Total
£m
At 1 August 2021 (116.0) 0.5 (115.5)
Additions (note 2) (349.5) 2.8 (346.7)
Released (note 2) 2.5 – 2.5
Utilised/(recovered) 23.5 (3.3) 20.2
Unwinding of discount (note 2) (2.0) – (2.0)
At 31 July 2022 (441.5) – (441.5)
The provision is classified as follows:
Legacy building
safety
improvements
provision
£m
Current (40.7)
Non-current (400.8)
Total (441.5)
The Group has established a provision for the cost of performing fire remedial works on a number of legacy developments
(note 2).
The Company has no provisions.
Notes to the Financial Statements continued
Accounts
160 Bellway p.l.c. Annual Report and Accounts 2022
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
Land and
property
£m
Plant,
fixtures
andfittings
£m
Right-of-use
assets
£m
Total
£m
Cost
At 1 August 2020 17.5 18.1 22.0 57.6
Additions 0.3 3.0 3.2 6.5
Disposals (1.2) (3.8) (1.5) (6.5)
At 1 August 2021 16.6 17.3 23.7 57.6
Additions 0.3 1.9 3.2 5.4
Disposals – (3.2) (1.7) (4.9)
At 31 July 2022 16.9 16.0 25.2 58.1
Depreciation
At 1 August 2020 3.0 11.8 6.1 20.9
Charge for year 0.4 2.6 3.5 6.5
On disposals (0.5) (3.7) (1.3) (5.5)
At 1 August 2021 2.9 10.7 8.3 21.9
Charge for year 0.4 2.4 3.3 6.1
On disposals – (2.4) (1.7) (4.1)
At 31 July 2022 3.3 10.7 9.9 23.9
Net book value
At 31 July 2022 13.6 5.3 15.3 34.2
At 31 July 2021 13.7 6.6 15.4 35.7
At 31 July 2020 14.5 6.3 15.9 36.7
The Company has no property, plant and equipment.
161Bellway p.l.c. Annual Report and Accounts 2022
Accounts
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 31 July 2022, the Group was made up of 23 subsidiaries and 7
joint arrangements. Further details are included in note 26.
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 had the following investments or financial assets in subsidiaries and joint ventures at 31 July:
Subsidiary undertakings
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Interest in subsidiary undertakings’ shares at cost – – 43.5 40.4
Financial assets and equity accounted joint arrangements
Financial assets – loan to joint ventures 20.9 39.6 – –
Interest in joint ventures – equity 9.3 15.7 – –
30.2 55.3 – –
30.2 55.3 43.5 40.4
The movement on both the equity accounted joint ventures and related financial assets during the year is as follows:
2022
£m
2021
£m
At the start of the year 55.3 60.8
Increase in loans 2.9 17.1
Repayment of loans (21.6) (33.0)
Dividends received from equity accounted joint ventures (15.7) –
Share of result 9.3 10.4
At the end of the year 30.2 55.3
Notes to the Financial Statements continued
Accounts
162 Bellway p.l.c. Annual Report and Accounts 2022
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.
The Group’s share of the joint ventures’ net assets/(liabilities) and income/(expenses) are made up as follows:
2022 2021
Ponton
Road
LLP
£m
Fradley
Residential
LLP
£m
Bellway
Latimer
Cherry
Hinton
LLP
£m
Other joint
ventures
£m
Total
£m
Ponton
Road
LLP
£m
Fradley
Residential
LLP
£m
Bellway
Latimer
Cherry
Hinton
LLP
£m
Other joint
ventures
£m
Total
£m
Current assets 4.7 15.9 36.9 2.8 60.3 36.6 10.0 41.7 1.9 90.2
Current liabilities (2.4) (1.8) (26.6) (2.8) (33.6) (27.4) (2.5) (23.2) (1.9) (55.0)
Non-current liabilities – (5.4) (12.0) – (17.4) – (0.7) (18.8) – (19.5)
Share of net assets/
(liabilities) of joint
ventures 2.3 8.7 (1.7) – 9.3 9.2 6.8 (0.3) – 15.7
Revenue 49.0 9.2 – – 58.2 54.9 7.7 – – 62.6
Costs (40.2) (7.2) – – (47.4) (45.7) (6.1) – – (51.8)
Operating profit 8.8 2.0 – – 10.8 9.2 1.6 – – 10.8
Interest – (0.1) (1.4) – (1.5) – (0.1) (0.3) – (0.4)
Share of result of
jointventures 8.8 1.9 (1.4) – 9.3 9.2 1.5 (0.3) – 10.4
Share of dividends paid to
joint venture partners (15.7) – – – (15.7) – – – – –
Guarantees relating to the overdrafts of the joint arrangements have been given by the Company (see note 24).
The Group has assessed expected credit losses and the loss allowance for joint venture financial assets as immaterial.
14. Commitments
Capital commitments
Group
2022
£m
2021
£m
Contracted not provided – 0.5
Authorised not contracted 1.5 –
Company
The commitments of the Company were £nil (2021 – £nil).
163Bellway p.l.c. Annual Report and Accounts 2022
Accounts
Financing
15. 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.
15a. Reconciliation of net cash flow to net cash
Group
2022
£m
2021
£m
(Decrease)/increase in net cash and cash equivalents (85.0) 408.9
Decrease in bank borrowings – 50.0
Increase in fixed rate sterling USPP notes – (130.0)
(Decrease)/increase in net cash from cash flows (85.0) 328.9
Net cash at 1 August 330.3 1.4
Net cash at 31 July 245.3 330.3
Company
2022
£m
2021
£m
Increase in net cash and cash equivalents – 0.1
Increase in net cash from cash flows – 0.1
Net cash at 1 August 52.8 52.7
Net cash at 31 July 52.8 52.8
15b. Analysis of net cash
Group
At 1 August
2021
£m
Cash
flows
£m
At 31 July
2022
£m
Cash and cash equivalents 460.3 (85.0) 375.3
Fixed rate sterling USPP notes (130.0) – (130.0)
Net cash 330.3 (85.0) 245.3
Company
At 1 August
2021
£m
Cash
flows
£m
At 31 July
2022
£m
Cash and cash equivalents 52.8 – 52.8
Net cash 52.8 – 52.8
Notes to the Financial Statements continued
Accounts
164 Bellway p.l.c. Annual Report and Accounts 2022
16. 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 both
the deferred payments for land purchases and provisions produces a notional interest payable amount and this is
also charged to finance expenses.
2022
£m
2021
£m
Interest receivable on bank deposits 0.5 –
Net interest on defined benefit asset 0.1 –
Other interest receivable 1.0 0.6
Finance income 1.6 0.6
2022
£m
2021
£m
Interest payable on bank loans and overdrafts 2.5 3.1
Interest payable on fixed rate sterling USPP notes 3.4 1.6
Interest on deferred term land payables 7.3 6.5
Unwinding of the discount on the legacy building safety provision 2.0 –
Interest payable on leases 0.5 0.5
Finance expenses 15.7 11.7
The unwinding of the discount on the legacy building safety provision is an adjusting item (note 2).
17. Financial instruments
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive cash flows from the asset have expired, or when the
Group has transferred those rights and substantially all the risks and rewards of the asset. Financial liabilities are
derecognised when the obligation specified in the contract is discharged, cancelled or expired.
Land purchased on deferred terms
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:
Balance at
31 July
£m
Total contracted
cash payment
£m
Within 1 year or
on demand
£m
1–2
years
£m
2–5
years
£m
More than
5 years
£m
At 31 July 2022 393.4 401.5 304.6 72.2 18.7 6.0
At 31 July 2021 455.8 459.7 382.3 67.0 10.4 –
165Bellway p.l.c. Annual Report and Accounts 2022
Accounts
17. Financial instruments continued
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:
Balance at
31 July
£m
Total contracted
cash payment
£m
Within 1 year or
on demand
£m
1–2
years
£m
2–5
years
£m
More than
5 years
£m
Trade and other payables (excluding
lease liabilities)
293.2 293.2 293.2 – – –
Fixed rate sterling USPP notes 130.0 153.2 3.4 3.4 10.3 136.1
Lease liabilities 17.2 18.9 3.3 3.3 7.1 5.2
At 31 July 2022 440.4 465.3 299.9 6.7 17.4 141.3
Trade and other payables (excluding
lease liabilities)
334.1 334.1 334.1 – – –
Fixed rate sterling USPP notes 130.0 156.6 3.4 3.4 10.3 139.5
Lease liabilities 17.2 19.1 3.4 2.9 7.2 5.6
At 31 July 2021 481.3 509.8 340.9 6.3 17.5 145.1
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 £400 million (2021 – £420.0 million) of undrawn bank facilities available.
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 2022 and 31 July 2021 for both the Group and the
Company are shown in note 15.
At 31 July 2022 the average interest rate earned on the temporary closing cash balance, excluding joint ventures, was 0.43%
(2021 – 0.02%).
Fair values
The carrying values of financial assets and liabilities reasonably approximate their fair values.
Financial assets and liabilities by category
The carrying values and fair values of the financial assets and liabilities of the Group and the Company are as follows:
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Loans and receivables 127.6 114.7 509.7 512.3
Cash and cash equivalents 375.3 460.3 52.8 52.8
Financial liabilities at amortised cost (833.8) (937.1) (0.1) (0.2)
(330.9) (362.1) 562.4 564.9
Reconciliation of liabilities arising from financing activities
Group
At 1 August
£m
Net cash flows
£m
New leases
£m
Disposals
£m
Interest
£m
At 31 July
£m
Fixed rate sterling USPP notes 130.0 (3.4) – – 3.4 130.0
Lease liabilities 17.2 (2.9) 3.2 (0.8) 0.5 17.2
At 31 July 2022 147.2 (6.3) 3.2 (0.8) 3.9 147.2
Bank borrowings 50.0 (50.0) – – – –
Fixed rate sterling USPP notes – 130.0 – – – 130.0
Lease liabilities 17.1 (3.4) 3.2 (0.2) 0.5 17.2
At 31 July 2021 67.1 76.6 3.2 (0.2) 0.5 147.2
Cash flows relating to interest are included within interest paid in cash flows from operating activities, within the cash
flow statement.
There were no liabilities arising from financing activities within the Company.
Notes to the Financial Statements continued
Accounts
166 Bellway p.l.c. Annual Report and Accounts 2022
17. Financial instruments continued
Bank facilities
The Group had bank facilities of £400.0 million as at 31 July 2022 (2021 – £420.0 million) which expire during the course of the
following financial years:
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
By 31 July 2022 – 125.0 – –
By 31 July 2023 50.0 50.0 – –
By 31 July 2024 245.0 245.0 – –
By 31 July 2025 30.0 – – –
By 31 July 2026 75.0 – – –
400.0 420.0 – –
Fixed rate sterling USPP notes
During the prior 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:
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
By 31 July 2028 80.0 80.0 – –
By 31 July 2031 50.0 50.0 – –
130.0 130.0 – –
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:
Group
2022
£m
Group
2021
£m
Company
2022
£m
Company
2021
£m
Equity 3,367.8 3,287.8 605.9 605.3
Net debt – – – –
Capital employed 3,367.8 3,287.8 605.9 605.3
Risks
Details of the risks relating to financial instruments are set out in the Risk Management section on page 76.
Shareholder capital
18. 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.
167Bellway p.l.c. Annual Report and Accounts 2022
Accounts
18. Issued capital continued
Group and Company
2022
Number
000
2022
£m
2021
Number
000
2021
£m
Allotted, called up and fully paid 12.5p ordinary shares
At start of year 123,396 15.4 123,346 15.4
Issued on exercise of options 90 – 50 –
At end of year 123,486 15.4 123,396 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.
19. 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 23. The cost of these is charged to retained earnings. During the period
268,240 (2021 – 105,967) shares were purchased by the Trust and the Trust transferred 38,978 (2021 – 47,923) shares to employees
and Directors. The number of shares held within the Trust and on which dividends have been waived, at 31 July 2022 was
331,115 (2021 – 101,853). These shares are held within the financial statements at a cost of £8.9 million (2021 – £2.4 million).
The market value of these shares at 31 July 2022 was £8.1 million (2021 – £3.3 million).
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.
20. 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.
2022
£m
2021
£m
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 July 2021 of 82.5p per share (2020 – 50.0p) 101.8 61.6
Interim dividend for the year ended 31 July 2022 of 45.0p per share (2021 – 35.0p per share) 55.4 43.1
157.2 104.7
Proposed final dividend for the year ended 31 July 2022 of 95.0p per share (2021 – 82.5p) 117.0 101.7
The 2022 proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 16 December
2022 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 2021, shares were held by the Bellway Employee
Share Trust (1992) (the ‘Trust’) on which dividends had been waived (see note 19).
The level of distributable reserves are sufficient in comparison to the proposed dividend.
Notes to the Financial Statements continued
Accounts
168 Bellway p.l.c. Annual Report and Accounts 2022
Directors and employees
21. Employee information
Group employment costs, including directors, comprised:
2022
£m
2021
£m
Wages and salaries 167.0 159.9
Social security 16.2 15.9
Pension costs (note 22) 6.8 6.0
Share-based payments (note 23) 3.1 2.6
193.1 184.4
The average number of persons employed by the Group during the year was 2,978 (2021 – 2,934) comprising 1,116 (2021 – 1,063)
administrative and 1,862 (2021 – 1,871) 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 106
to 118.
Key management personnel remuneration, including directors, comprised:
2022
£m
2021
£m
Salaries and fees 3.1 2.9
Taxable benefits 0.2 0.2
Annual cash bonus 2.7 2.5
Pension costs 0.1 0.1
Share-based payments 1.6 1.2
7.7 6.9
Key management personnel, as disclosed under IAS 24 ‘Related party disclosures’, comprises the Directors and other senior
operational management.
22. 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 £6.8 million (2021 – £6.0 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.
169Bellway p.l.c. Annual Report and Accounts 2022
Accounts
22. Retirement benefit asset continued
(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 2020 and updated on an approximate basis to 31 July 2022.
With regard to the Scheme, regular contributions made by the employer over the financial year were £nil (2021 – £nil).
The employer paid no special contributions (2021 – £nil) and reimbursed the pension fund £0.3 million (2021 – £0.4 million)
forexpenses incurred by the fund.
The Group is expected to make no regular contributions during the year ending 31 July 2023.
(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 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.
Inflation risk 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% (CPI) or 5% p.a. (RPI) 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.
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
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Balance at 1 August (63.6) (66.6) 73.8 67.9 10.2 1.3
Included in the income statement
Interest (expense)/income (1.1) (1.1) 1.2 1.1 0.1 –
(1.1) (1.1) 1.2 1.1 0.1 –
Included in other comprehensive
income/(expense)
Remeasurement gain arising from:
– Change in demographic and
financialassumptions
14.5 2.6 – – 14.5 2.6
– Experience adjustments (0.6) – – – (0.6) –
Return on plan assets excluding
interestincome
– – (17.4) 5.9 (17.4) 5.9
13.9 2.6 (17.4) 5.9 (3.5) 8.5
Other
Contributions paid by the employer – – 0.3 0.4 0.3 0.4
Benefits paid 1.9 1.5 (1.9) (1.5) – –
1.9 1.5 (1.6) (1.1) 0.3 0.4
Balance at 31 July (48.9) (63.6) 56.0 73.8 7.1 10.2
Notes to the Financial Statements continued
Accounts
170 Bellway p.l.c. Annual Report and Accounts 2022
22. Retirement benefit asset continued
The weighted average duration of the defined benefit obligation at the end of the reporting period is 14 years (2021 – 17 years).
Scheme assets
The fair value of the Scheme assets is:
2022
£m
2021
£m
Diversified growth fund 21.5 25.7
Equity instruments – 2.4
Government bonds 8.9 11.6
Corporate bonds 7.8 5.7
Liability driven instruments 11.3 20.3
Insurance policies annuities 6.0 7.8
Cash and cash equivalents 0.5 0.3
Total 56.0 73.8
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. Liability driven instruments are a portfolio of funds designed to
hedge the majority of the interest rate and inflation risks associated with the schemes’ obligations.
Actuarial assumptions
The following are the principal actuarial assumptions at the reporting date:
2022
% per annum
2021
% per annum
Discount rate 3.50 1.70
Future salary increases 3.50 3.60
Allowance for pension in payment increases of RPI or 5% p.a. if less 2.80 3.00
Allowance for deferred pension increases of CPI or 3% p.a. if less 2.00 2.10
Allowance for commutation of pension for cash at retirement 15% of pension 15% of pension
The mortality assumptions adopted at 31 July 2022 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 2022 22.8 years
Female retiring in 2022 24.6 years
Male retiring in 2042 24.1 years
Female retiring in 2042 26.1 years
The mortality assumptions adopted at 31 July 2021 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 2021 22.7 years
Female retiring in 2021 24.5 years
Male retiring in 2041 24.0 years
Female retiring in 2041 26.0 years
Sensitivities
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 Change in assumption Change in liabilities (%)
Discount rate +0.10% p.a. Decrease by 1.3%
Inflation – RPI +0.10% p.a. Increase by 1.1%
Mortality +1 year life expectancy Increase by 3.5%
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.
171Bellway p.l.c. Annual Report and Accounts 2022
Accounts
23. 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 dœs 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.
The Group operates a long-term incentive plan (‘LTIP’), a deferred bonus plans (‘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 2022 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
page 115 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
2022
Weighted
average
exercise price
p
2022
Number of
options
No.
2021
Weighted
average
exercise price
p
2021
Number of
options
No.
Outstanding at the beginning of the year – 316,427 – 269,690
Granted during the year – 121,569 – 123,822
Lapsed during the year – (69,742) – (29,162)
Exercised during the year – (38,975) – (47,923)
Outstanding at the end of the year – 329,279 – 316,427
Exercisable at the end of the year – 451 – 7,120
The options outstanding at 31 July 2022 have a weighted average contractual life of 1.4 years (2021 – 1.3 years). The weighted
average share price at the date of exercise for share options exercised during the year was 3,148.4p (2021 – 2,931.5p).
Notes to the Financial Statements continued
Accounts
172 Bellway p.l.c. Annual Report and Accounts 2022
23. Share based payments continued
SRSOS
2022
Weighted
average
exercise price
p
2022
Number of
options
No.
2021
Weighted
average
exercise price
p
2021
Number of
options
No.
Outstanding at the beginning of the year 2,404.8 525,421 2,519.7 438,360
Granted during the year 2,535.0 158,154 2,333.0 289,517
Forfeited during the year 2,450.3 (151,655) 2,504.0 (151,525)
Exercised during the year 2,357.3 (89,838) 2,690.7 (50,931)
Outstanding at the end of the year 2,445.4 442,082 2,404.8 525,421
Exercisable at the end of the year 2,185.5 2,522 2,934.4 14,252
The options outstanding at 31 July 2022 have an exercise price in the range of 1,892.8p to 2,934.4p (2021 – 1,892.8p to 2,934.4p)
and have a weighted average contractual life of 2.4 years (2021 – 2.5 years). The weighted average share price at the date of
exercise for share options exercised during the year was 2,825.1p (2021 – 3,291.5p).
Valuation methodology
For LTIP options granted prior to October 2021, 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). For LTIP options granted from October 2021, one third of the performance criteria is based on the achievement of
a level of EPS, one third of the performance criteria is based on TSR against comparator companies with the other third 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.
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:
2022 2021
October
2021
November
2021
November
2021
November
2021
December
2021
December
2021
October
2020
November
2020
November
2020
December
2020
December
2020
Scheme
description
LTIP LTIP DBP DBP 3 year
SRSOS
5 year
SRSOS
LTIP LTIP DBP 3 Year
SRSOS
5 Year
SRSOS
Grant date
26-Oct-
21
11-Nov-
21
11-Nov-
21
11-Nov-
21
02-Dec-
21
02-Dec-
21
27-Oct-
20
10-Nov-
20
10-Nov-
20
04-Dec-
20
04-Dec-
20
Risk free
interestrate
0.0% 0.0% 0.0% 0.0% 0.5% 0.6% 0.0% 0.0% 0.0% 0.0% 0.05%
Exercise price – – – – 2,535.0p 2,535.0p – – – 2,333.0p 2,333.0p
Share price at
date of grant
3,319.0p 3,220.0p 3,220.0p 3,220.0p 3,130.0p 3,130.0p 2,317.0p 2,902.0p 2,902.0p 2,980.0p 2,980.0p
Expected
dividend yield
0.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Expected life 3 years 3 years 3 years 4 years 3 years
2months
5 years 2
months
3 years 3 years 3 years 3 years
2months
5 years
2months
Vesting date
26-Oct-
24
11-Nov-
24
11-Nov-
24
11-Nov-
25
01-Feb-25 01-Feb-
27
27-Oct-
23
10-Nov-
23
10-Nov-
23
01-Feb-
24
01-Feb-
26
Expected
volatility
35% 35% 35% 35% 35% 30% 35% 35% 35% 35% 35%
Fair value
ofoption
2,124.3p 1,867.0p 2,474.0p 2,350.0p 734.0p 638.0p 796.0p 1,041.0p 2,230.0p 715.0p 710.0p
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 £3.1 million (2021 – £2.6 million) in relation to equity-settled share-based
payment transactions.
173Bellway p.l.c. Annual Report and Accounts 2022
Accounts
Contingencies, related parties and subsidiaries
24. 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 2, 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 or where
remedial works may need to be performed in line with the Pledge. 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 or reduce, in line with normal accounting practice if new issues are
identified or if estimates change, as Bellway and building owners continue to undertake their own investigative works on these
and other schemes within the legacy portfolio. Furthermore, the finer details of the government contract underlying the Pledge
are to be agreed with the sector as a whole, and the scope could change until this is finally agreed.
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 2022 there were bank overdrafts of £7.6 million (2021
– £7.5 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 (2021 – £130.0 million). 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 (2021 – £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.
25. 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 21.
Detailed disclosure of individual remuneration of Board members is included in the Remuneration Report on page 112.
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:
2022
£m
2021
£m
Invoiced to joint arrangements in respect of accounting, management fees, interest on loans,
landpurchases and infrastructure works
31.6 23.5
Amounts owed to joint arrangements in respect of land purchases and management fees at the
year end
(4.5) (4.5)
Amounts owed by joint arrangements in respect of accounting, management fees, interest, land
purchases and infrastructure works
27.0 49.4
Notes to the Financial Statements continued
Accounts
174 Bellway p.l.c. Annual Report and Accounts 2022
25. Related party transactions continued
Company
During the year the Company entered into the following related party transactions with its subsidiaries and joint arrangements:
2022
£m
2021
£m
Amounts received in the year from subsidiaries for share options exercised by subsidiary company
employees and dividends received
162.1 186.7
Amounts paid in the year by subsidiaries on behalf of the Company in respect of dividends,
financeexpenses and share purchases, and receivable from subsidiaries on disposal of investments
(164.7) (107.2)
Amounts owed by subsidiaries in respect of dividends and shares issued net of amounts paid on
behalf of the Company
509.7 512.3
Investments in subsidiaries and joint ventures 43.5 40.4
26. Group undertakings
The Directors set out below information relating to the Group undertakings (excluding resident management companies
presented in note 27) as at 31 July 2022. 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
Southern and Regional Developments Limited
^^
Joint arrangements
Cramlington Developments Limited (50% owned, year end of 30 June)
^^ a
Fradley Residential LLP (50% owned)
^^
Leebell Developments Limited (50% owned, year end of 30 June)
^^ a
Ponton Road LLP (50% owned)
^^
Lambeth Regeneration LLP (50% owned)
^^
Bellway Latimer Cherry Hinton LLP (50% owned)
^^
DFE TW Residential Limited (50% owned)
^^ c
Subsidiaries – dormant
^
Ashberry Homes Limited J. T. B. Estates Limited
Bellway (Builders) Limited John T. Bell & Sons (1976) Limited
Bellway Financial Services Limited Nixons Kitchens Limited
Bellway London Limited Seaton GR SPV 12 Limited
Bellway Trustee Company Limited Seaton GR SPV 13 Limited
Bulldog Premium Growth I Limited Seaton GR SPV 14 Limited
George Blackett Limited Seaton Thirteen Limited
Homes2Let Limited Seaton Eleven Limited
J. T. B. (Chapel Farm) Estates Limited
Other entities
HBF Insurance PCC Limited
b
MI New Home Insurance PCC Limited
b
Artex Insurance (Guernsey) PCC Limited
d
Notes:
^ Dormant
^^ These shares are held indirectly.
a Registered address is Persimmon House, Fulford, York, YO19 4FE
b Registered address is PO Box 155, Mill Court, La Charroterie, St Peter Port, Guernsey, GY1 4ET
c Registered address is 5 Temple Square, Temple Street, Liverpool, L2 5RH
d Registered address is PO Box 230, Heritage Hall, Le Marchant Street, St Peter Port, Guernsey, GY1 4JH
175Bellway p.l.c. Annual Report and Accounts 2022
Accounts
27. 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 2022.
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 dœs 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, United Kingdom, NE3 2ER
Abbotswood Park Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Amen Corner (Binfield) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Apsley Quay Management Company Limited 3rd Floor, 86–90 Paul Street, London, United Kingdom, EC2A 4NE
Area F1 (Kings Hill) Management Company Limited Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE
Arrowe Brook Park (Greasby) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
Aspects Management Company Limited 100 Avebury Boulevard, Milton Keynes, MK9 1FH*/**
Aspen Apartments (Colchester) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, United Kingdom, BH25 5NR
Aspen Walk (Eight Ash Green) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Astley Fields Management Company Limited 1 Centurion Court, Centurion Way, Wilnecote, Tamworth, Staffordshire, UnitedKingdom,
B77 5PN
Avondale (Cressing) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Awel Y Mor Management Company Limited 11 Little Park Farm Road, Fareham, Hampshire, PO15 5SN
Azalea (Medstead) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, HP2 7DN
Badbury Reach Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, 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, England, EC2A 4NE
Barton Manor (Barton) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Bassingbourn Fields Management Company Limited Elstree Way, Borehamwood, England, WD6 1JH
Baswich Grange Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Battalion Court Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Beckton Parkside Management Company Limited 8th Floor Holborn Tower, 137-144 High Holborn, London, England, WC1V 6PL
Beechcroft (Sunninghill) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Belmont Park (Maidenhead) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Bentall Place (Heybridge) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Bicknor Wood Ltd Woodland Place, Hurricane Way, Wickford, Essex, England, SS11 8YB
Blackthorn Meadows Residents Management Company Limited 298 Regents Park Road, London, N3 2UU
Bluebell Walk (Harrietsham) Management Company Limited 10 Coopers Way, Temple Farm Industrial Estate, Southend-On-Sea, England, 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 395 Centennial Park Centennial Avenue, Elstree, Borehamwood, England, WD6 3TJ
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, England, BS32 4AQ
Brambleside Management Company Limited 5 Caldecotte Lake Business Park, Caldecotte Lake Dri, Caldecotte, Milton Keynes,
Buckinghamshire, England, MK7 8LE
Brampton Gate Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Bramshall Green Management Company Limited Whittingham Hall, Whittington Road, Whittington, Worcester, WR5 2ZX
Bridleway Grange Residents Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY
Broadleaf Ashby Management Company Limited 100 Avebury Boulevard, Milton Keynes, MK9 1FH
Broadleaf Management Company Limited 100 Avebury Boulevard, Milton Keynes, MK9 1FH
Brookvale Management Company Limited Trinity Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, UnitedKingdom,
HP2 7DN
Notes to the Financial Statements continued
Accounts
176 Bellway p.l.c. Annual Report and Accounts 2022
Company Name Registered Office
Buckland Rise (Peters Village) Management Company Ltd Woodland Place, Hurricane Way, Wickford, United Kingdom, 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, United Kingdom, NE3 2ER
Byron Heights Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom, NE3 2ER
Castlegate (Skelton) Management Company Limited Alexander House 1 Mandarin Road, Houghton Le Spring, Sunderland, United Kingdom,
DH4 5RA
Cathedral Park (Chichester) Management Company Limited Fisherton House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY
Cecilly Mills Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Chailey Gardens Management Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Chalfont Drive Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Chamberlains Bridge Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Charlton Hayes Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR
Charters Hill Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Cherry Meadow and Hatton Court Management Company Limited 2nd Floor, 154–155 Great Charles Street, Queensway, Birmingham, England, B3 3LP
Cherry Orchard (Bevere) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Chestnut Grove (Ash Green) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Chestnut Vale Residents Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU
Copperfields Resident Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY
Copperhouse Green Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
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, United Kingdom,
HP27DN
Cornfield’s Residents Management Company Limited Romulus Court Meridian East, Meridian Business Park, Leicester, Leicestershire, United
Kingdom, LE19 1YG
Cortlands Management Company Limited Elstree Way, Borehamwood, England, WD6 1JH
Cotswold Chase Management Company (Gloucester) Limited Alexander Faulkner Partnerships , 2nd Floor, 154–155 Great Charles Street Queensway,
Birmingham, England, 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, England, CW6 9DL
Crown Fields (Chatham) Management Company Limited Gateway House, 10 Coopers Way, Southend-On-Sea, SS2 5TE
Curzon Park (Residents) Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Cuttle Brook Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Dacres Wood Court Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex,
UnitedKingdom, SS11 8YB
Dalesway (Harrogate) Management Company Limited Rmg House, Essex Road, Hoddesdon, Hertfordshire, United Kingdom, EN11 0DR
Devonshire Place (Grays) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Dickens Gate (Rudlœ) Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN
Dickens Manor Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Digby Court (Birmingham) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Dove Manor Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Dunton Fields (Laindon) Management Company Limited 8 Hemmells, Basildon, Essex, England, 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, United Kingdom, NE3 2ER
Eastbrook Village East Phase 1 (Site H) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, United Kingdom, WC1V 6PL
Eastside Quarter Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Ebbsfleet Cross (Phase 2) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Ebbsfleet Cross Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Elements Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Elmington Parcel 1 Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Elmington Parcel 2 Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Elmington Parcel 3 Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Essendene Residential Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom, NE3 2ER
**
27. Resident management companies continued
177Bellway p.l.c. Annual Report and Accounts 2022
Accounts
27. Resident management companies continued
Company Name Registered Office
Estone Grange Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Eve Meadows (Haughley) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, 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 Pinnacle Housing Ltd, 8th Floor Holborn Tower, 137–144 High Holborn, London, England,
WC1V 6PL
Fielders Crescent Phase 3 (209A) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL
Fifers Lane (Orchard Place) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Finchale Drive Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Forest Chase Management Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN
Forest Oak Management Company Limited Faulker & Company, 1a, George Street, Hinckley, Leicestershire, England, LE10 0AL
Four Oaks (Oxted) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, 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, England, BH25 5NR
Frobisher Court (Finningley) Management Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom,
SY13BF
Furlong Park Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom,
SY13BF
Fusion (Harlow) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Goodsyard (No 1) Management Company Limited 11 Little Park Farm Road, Fareham, Hampshire, UK, PO15 5SN
Grammar School Gardens Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Greensands Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Grey Gables Farm Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Greystone Meadows (Undy) Management Company Limited 7 Portal Business Park, Eaton Lane, Tarporley, England, CW6 9DL
Grove Meadows Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU
Hall Road (Rochford) Management Company Limited First Floor, Unit 1, Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, United
Kingdom, WD6 1JD
Halyards Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
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, United Kingdom,
NG1 6HH
Hanwell View Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN
Hardintone Court Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Harnham Park Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, 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 Unit 1, Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, United Kingdom, WD6 1JD
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, England, HP2 7DN
Hazel Fold Residents Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY
Hazlemere Marina (Waltham Abbey) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Heatherley Wood Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Heathlands RMC Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Helios Park Management Company Limited Imperium, Imperial Way, Reading, Berkshire, England, RG2 0TD
Helliers Lane (Cheddar) Management Company Limited 1st Floor 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom,
BS324AQ
Hellingly (Hailsham) Management Company Limited Woodland Place, Hurricane Way, Wickford, Essex, England, 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, England, SP2 7QY
Hinxhill Park (Ashford) Management Company Limited Woodland Place, Hurricane Way, Wickford, Essex, United Kingdom, 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, England, HP2 7DN
Honeytree Walk (Colchester) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Notes to the Financial Statements continued
Accounts
178 Bellway p.l.c. Annual Report and Accounts 2022
Company Name Registered Office
Huntercombe Walk (Taplow) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Ikon (Croydon) Management Company Limited 86–90 Paul Street, London, United Kingdom, 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
Jameson Manor Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom, NE3 2ER
Jellicœ Gardens (Moreton) Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
Jubilee Park Residents Management Company Limited North Port 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
Kent Wharf Management Company Limited Concierge Office Kent Wharf, Creekside, London, SE8 3GP
Kingfisher Green (Rainham) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
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, England, BH25 5NR
Ladden Garden Village PL 24–27 (Leasehold Apartments) Management
Company Limited
1st Floor 2540 The Quadrant, Aztec West, Almondsbury, Bristol, United Kingdom,
BS324AQ
Lakeside Park Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, England, NG1 6HH
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 Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Latitude Residents No 3 Limited New Kings Court, Tollgate, Chandlers Ford, SO53 3LG
Latitude Residents No 5 Limited New Kings Court, Tollgate, Chandlers Ford, SO53 3LG
Legacy Wharf (Phase 2) Management Company Limited Woodland Place, Hurricane Way, Wickford, England, SS11 8YB
Legacy Wharf Management Company Limited Woodland Place, Hurricane Way, Wickford, England, SS11 8YB
Lestone Mews Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Liberty Quarter Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Limehouse Basin (London) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Linkside (Burton) Management Company Limited Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, United Kingdom, CM20 2BN
Linmere Gateway Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Linmere Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
Lion Wharf (Isleworth) Management Company Limited 395 Centennial Park, Centennial Avenue, Elstree, Borehamwood, England, WD6 3TJ
Little Acres Residents Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, England, SP2 7QY
Little Meadows (Cranleigh) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Littlebrook (Cutbush Lane) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Lockharts RMC Limited Unit 7 Astra Centre, Harlow, Essex, England, CM20 2BN
Long Acre (Shinfield) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Longfield Place (Sherfield) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
Longholme Park Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, United
Kingdom, SY2 6LG
Longwood Copse Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
Lucas Green Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Lyde Green Management Company Limited 2540 The Quadrant Bellway Homes, Aztec West, Almondsbury, Bristol, England,
BS324AQ
Lysander Fields Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Mæs Y Rhedyn Fern Meadow Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
*
Mallard Walk Management Company Limited 2nd Floor, 154 Great Charles Street Queensway, Birmingham, England, B3 3HN
Malvern Chase (Tewkesbury) Management Company Limited 2540 The Quadrant, Aztec West, Bristol, BS32 4AQ
Manor Chase (Gloucester Road) Tutshill Management Company Limited 2nd Floor, 154–155 Great Charles Street Queensway, Birmingham, England, B3 3LP
Maple Creek Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Marconi (Chelmsford) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL
27. Resident management companies continued
179Bellway p.l.c. Annual Report and Accounts 2022
Accounts
Company Name Registered Office
Marlborough Road Wroughton (Swindon) Management Company Ltd 1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom,
BS324AQ
Maybrey Works Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Mead Fields (Phase 2) Weston Parklands Management Company Limited 1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom,
BS324AQ
Mead Fields Phase 2 (Leasehold Apartments) Management
CompanyLimited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom,
BS324AQ
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, England, SP2 7QY
Merchants Gate Cottingham Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Mill Fields (Wingerworth) Management Company Limited Unit 7, Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL
Milldown Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
Millstone Park Residents Management Company Limited Unit 7, Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL
Montague Green (Rowland’s Castle) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
Mousley Park Hilton Management Company Limited One Eleven, Edmund Street, Birmingham, 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, EN11 0DR
New Cardington Hangars Block Residents Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU
Nightingale Rise (Hoo) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Northdene Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
Novello Management Company Limited First Floor, Unit 1, Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, United
Kingdom, WD6 1JD
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, England, DA1 5FS
Oakley Park (Edenbridge) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, 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 New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, England, SO53 3LG
P.R.P. Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Park Gate Village Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, England, CW6 9DL
Pasture Walk Management Company Limited Castleman Business Centre, Embankment Way, Ringwood, England, BH24 1EU
Penmire Rise Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Phase 1A Parc Mawr (Penllergær) Management Company Limited Building 1 Eastern Business Park, St Mellons, Cardiff, United Kingdom, CF3 5EA
Pinchbeck Fields (EC) Residents Management Company Limited 2nd Floor, Premier House, Elstree Way, Borehamwood, WD6 1JH
Pine Walk Guisborough Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Pinewood Grange (Stowmarket) Management Company Limited 2nd, Premier House, Elstree Way, Borehamwood, Hertfordshire, United Kingdom, WD6
1JH
Pipits Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
Pirton Fields (Churchdown) Management Company Limited Building 1 Eastern Business Park, St Mellons, Cardiff, United Kingdom, CF3 5EA
Platts Meadow (Winsford) Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
Plummers Meadow (Halewood) Residents Management Company Limited Unit 7 Portal Business Park, Tarporley, England, CW9 6DL
Poppy Field Residents Management Company Limited North Point Stafford Drive Battlefield Enterprise, Shrewsbury, Shropshire, England,
SY26LG
Poppy Fields (Cholsey) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
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 First Floor, Unit 1, Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, United
Kingdom, WD6 1JD
QE2 (Welwyn Garden City) Management Company Limited 3rd Floor, 86–90 Paul Street, London, United Kingdom, EC2A 4NE
Quakers Walk (Devizes) Management Company Limited 1st Floor 2540 The Quadrant, Aztec West, Bristol, United Kingdom, BS32 4AQ
Quantock Heights (Banwell) Management Company Limited 1st Floor 2540 The Quadrant, Aztec West, Bristol, United Kingdom, BS32 4AQ
Queenshead Park Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Rainbow Fields (Waddicar) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, England, SP2 7QY
Reflections Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
27. Resident management companies continued
Notes to the Financial Statements continued
Accounts
180 Bellway p.l.c. Annual Report and Accounts 2022
Company Name Registered Office
Renaissance (Reading) Management Company Limited Pacific House, Imperial Way, Reading, Berkshire, England, RG2 0TD
Renovo (West Thurrock) Management Company Limited First Floor, Unit 1, Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, United
Kingdom, WD6 1JD
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 Gate (Melton Mowbray) Management Company Limited 3 Romulus Court, Meridian Business Park, Leicester, United Kingdom, LE19 1YG
Roman Walk Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Rookerey Park Management Company Limited Fisherton House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY
Rose Meadow (Northwich) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, 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, England, SY1 3BF
Sandstone Brook Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Sandwell College Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
**
Sapphire Fields & Beaumont Park Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Saxon Heath (Marham Park) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Scholars Place Management Company Limited Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, United Kingdom, CM20 2BN
Seaford Grange (Newlands) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Sheasby Park Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Sixty Three Management Company Limited Gateway House, 10 Coopers Way, Temple Farm Industrial Estate, Southend-On-Sea,
England, SS2 5TE
Sky Plaza (Farnborough) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY
Solomon’s Seal (Horsham) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, SS11 8YB
Somerford Gate (Congleton) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
Sovereign Place (Horley) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Spofforth Park Management Company Limited Rmg House, Essex Road, Hoddesdon, Hertfordshire, United Kingdom, 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, England,
SY1 3BF
St John’s View (Menston) Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
St Lythans Park (Culverhouse Cross) Management Company Limited 11 Little Park Farm Road, Fareham, Hampshire, UK, PO15 5SN
St Mary’s Hill (Blandford) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY
St Mary’s Stannington Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom,
NE32ER
****
St Wilfrid’s Place (Litherland) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL
St. George’s Park (Phase 2) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
St. George’s Park Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
St. James Mews (Charfield) Management Company Limited 11 Little Park Farm Road, Fareham, Hampshire, UK, PO15 5SN
Steeds Farm (Fern Hill Gardens) Management Co Limited 2540 The Quadrant, Aztec West, Bristol, BS32 4AQ
Steeple Chase (Frisby) Management Company Limited 7 Astra Centre, Edinburgh Way, Harlow, Essex, England, CM20 2BN
Sterling Square (Bracknell) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY
Stilton Gate Management Company Limited Premier House, Elstree Way, Borehamwood, WD6 1JH
Stonebridge View Residents Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Stoughton Park Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Summerhill View Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL
Swanland Grange Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, CW6 9DL
Tattenhœ Park (Parcel 4) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Abbey Fields Grange Management Company Limited 3 Romulus Court, Meridian Business Park, Leicester, Leicestershire, United Kingdom,
LE191YG
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, United Kingdom, 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, England , EN11 0DR
The Bridles Residential Management Company Limited 2540 The Quadrant, Aztec West, Bristol, BS32 4AQ
The Chase Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,
HP27DN
27. Resident management companies continued
181Bellway p.l.c. Annual Report and Accounts 2022
Accounts
27. Resident management companies continued
Notes to the Financial Statements continued
Company Name Registered Office
The Cherry Meadow and Hatton Court Management Company Limited 2nd Floor, 154–155 Great Charles Street, Queensway, Birmingham, England, B3 3LP
The Coppice Heights & Amber Rise Management Company Limited 3 Romulus Court, 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 395 Centennial Park Centennial Avenue, Elstree, WD6 3TJ
The Furlongs (Gt. Leighs) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Furrows (Warboys) Residents Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU
The Gateford Quarter Management Company Limited 3 Romulus Court, Meridian Business Park, Leicester, United Kingdom, LE19 1YG
The Grange (Eldesborough) Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU
The Grange (Fenham) Resident Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom, NE3 2ER
The Green (Solihull) Management Company Limited 10 Queen Street Place, London, United Kingdom, EC4R 1AG
**
The Haven (Emsworth) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Hedgrows (Scots Lane) Residents Management Company Limited 4335 Park Approach, Leeds, LS15 8GB
The Long Shoot Management Company Limited 2nd Floor, 154 Great Charles Street Queensway, Birmingham, England, B3 3HN
The Mount Prestwich Residents Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY
The Oaks (Parsons Hill) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,
NG1 6HH
The Oaks (Witham) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
The Orchards (Colchester) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Pastures (Telford) Management Company Limited 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
The Pastures (Wilstead) Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU
The Printworks (Reading) Residents Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
The Residence (Nine Elms) Management Park Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL
The Residence (Phase 2) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, England, 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
CompanyLimited
Mainstay Residential Limited Whittington 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 One Eleven, Edmund Street, Birmingham, B3 2HJ
The Vickers (Witchford) Residents Management Company Limited Elstree Way, Borehamwood, WD6 1JH
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, United Kingdom,
SY13BF
The Woodlands (Watnall) Management Company Limited Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, United Kingdom, CM20 2BN
Thomas Road Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL
Tidbury Heights Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH
Tindale Reach (Wickwar) Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN
Tranby Park Residential Management Company Limited Rmg House, Essex Road, Hoddesdon, Hertfordshire, United Kingdom, EN11 0DR
Turnberry Quay Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL
Tylman Place (Faversham) Management Company Limited Hurricane Way, Wickford, Essex, England, SS11 8YB
Vicarage Gardens (South Marston Swindon) Management
CompanyLimited
1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom,
BS324AQ
Victoria Gardens (Peters Village) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Waltham Heights Resident’s Management Company Limited 100 Avebury Boulevard, Milton Keynes, United Kingdom, MK9 1FH
Walton Park Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Waterhouse Mill Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Waterside At Riverwell (Block E) Management Company Limited 86–90 Paul Street, London, United Kingdom, EC2A 4NE
Wavendon Chase Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR
Wavendon View Residents Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR
Weaver Green Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom, CW6 9DL
Wellfield Rise Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom, 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, United Kingdom,
SY13BF
West End Quarter (Folkestone) Management Company Limited Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, United Kingdom, SS2 5TE
Westbrook Moorings Management Company Limited 86–90 Paul Street, London, United Kingdom, EC2A 4NE
Accounts
182 Bellway p.l.c. Annual Report and Accounts 2022
27. Resident management companies continued
Company Name Registered Office
Westland Place (Rainham) Management Company Limited Woodland Place. Wickford Business Park, Hurricane Way, Wickford, SS11 8YB
Westminster Road Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ
Weycorner (Guildford) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Wharf Farm (Rugby) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom, CW6 9DL
Wickfields (Longwick) Management Company Limited 86–90 Paul Street, London, United Kingdom, EC2A 4NE
Wildflower Meadow Limited 100 Avebury Boulevard, Milton Keynes, MK9 1FH
Willow Park (Halstead) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
Willow Rise Management Company Limited Romulus Court, Meridian Business Park, Leicester, LE19 1YG
Windgreen Gardens Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY
Wolds View Residents Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,
SY1 3BF
Woodcroft Park Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United
Kingdom, SS11 8YB
Woodgreen (Blyth) Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle Upon Tyne, United Kingdom, NE3 2ER
Wyvern Grange Management Company Limited 154–155 Great Charles Street Queensway, Birmingham, England, B3 3LP
Yew Tree Gardens (Cholsey) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, HP2 7DN
* Company is a 50/50 Joint venture
** Company limited by shares wholly owned by Bellway Homes
*** Company limited by shares wholly owned by an employee of Bellway Homes Limited
**** Company limited by shares.
Other information
28. 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 provides a
better understanding of the underlying performance of the Group.
• Underlying gross 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 operating 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.
• Underlying earnings per share – This is calculated as underlying profit for the year divided 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).
• 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.
183Bellway p.l.c. Annual Report and Accounts 2022
Accounts
28. Alternative performance measures continued
Per balance sheet
2022
£m
2021
£m
Mvt
£m
2021
£m
2020
£m
Mvt
£m
Land 2,786.4 2,483.9 302.5 2,483.9 2,216.2 267.7
Work-in-progress 1,524.8 1,431.4 93.4 1,431.4 1,496.1 (64.7)
Increase in capital invested in land
and work-in-progress in the year
395.9
203.0
Land creditors (393.4) (455.8) 62.4 (455.8) (343.6) (112.2)
Increase in capital invested in land,
netofland creditors, and work-in-
progress inthe year 458.3 90.8
• 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 18). 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.
• Underlying return on capital employed (‘underlying 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.
2022
Capital
employed
£m
2022
Land
creditors
£m
2022
Capital
employed
including land
creditors
£m
2021
Capital
employed
£m
2021
Land
creditors
£m
2021
Capital
employed
including land
creditors
£m
Underlying operating profit 653.2 653.2 531.5 531.5
Capital employed/land creditors:
Opening 3,287.8 455.8 3,743.6 2,994.0 343.6 3,337.6
Half year 3,429.8 349.0 3,778.8 3,162.4 371.7 3,534.1
Closing 3,367.8 393.4 3,761.2 3,287.8 455.8 3,743.6
Average 3,361.8 399.4 3,761.2 3,148.1 390.4 3,538.4
Underlying return on capital employed 19.4% 17.4% 16.9% 15.0%
• 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.
2022
Capital
employed
£m
2022
Land
creditors
£m
2022
Capital
employed
including land
creditors
£m
2021
Capital
employed
£m
2021
Land
creditors
£m
2021
Capital
employed
including land
creditors
£m
Operating profit 309.0 309.0 479.7 479.7
Capital employed/land creditors:
Opening 3,287.8 455.8 3,743.6 2,994.0 343.6 3,337.6
Half year 3,429.8 349.0 3,778.8 3,162.4 371.7 3,534.1
Closing 3,367.8 393.4 3,761.2 3,287.8 455.8 3,743.6
Average 3,361.8 399.4 3,761.2 3,148.1 390.4 3,538.4
Return on capital employed 9.2% 8.2% 15.2% 13.6%
Notes to the Financial Statements continued
Accounts
184 Bellway p.l.c. Annual Report and Accounts 2022
• 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.
2022
£m
2021
£m
Profit for the year 242.6 390.7
Net assets:
Opening 3,287.8 2,994.0
Half year 3,429.8 3,162.4
Closing 3,367.8 3,287.8
Average 3,361.8 3,148.1
Post tax return on equity 7.2% 12.4%
• Underlying post tax return on equity – This is calculated as profit for the year before net legacy building safety expense and
exceptional items, 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.
2022
£m
2021
£m
Underlying profit for the year 518.5 432.7
Net assets:
Opening 3,287.8 2,994.0
Half year 3,429.8 3,162.4
Closing 3,367.8 3,287.8
Average 3,361.8 3,148.1
Underlying post tax return on equity 15.4% 13.7%
• Total growth in value per ordinary share – The Directors use this as a proxy for the increase in shareholder value since 31 July
2019. A period of 3 years is used to reflect medium-term growth.
Net asset value per ordinary share:
At 31 July 2022 2,727p
At 31 July 2019 2,372p
Net asset value growth per ordinary share 355p
Dividend paid per ordinary share:
Year ended 31 July 2022 127.5p
Year ended 31 July 2021 85.0p
Year ended 31 July 2020 100.0p
Cumulative dividends paid per ordinary share 312.5p
Total growth in value per ordinary share 667.5p
• Annualised accounting return in NAV and dividends paid since 31 July 2019 – 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 2019 (as
detailed above) divided by the net asset value per ordinary share at 31 July 2019. The Directors use this as a proxy for the
increase in shareholder value since 31 July 2019.
Net asset value growth per ordinary share 355p
Cumulative dividends paid per ordinary share 312.5p
Total growth in value per ordinary share 667.5p
Net asset value per ordinary share at 31 July 2019 2,372p
Total value per ordinary share 3,039.5p
Annualised accounting return = 8.6%
( )
3,039.5
2,372.0
^(1/3) –1
185Bellway p.l.c. Annual Report and Accounts 2022
Accounts
28. Alternative performance measures continued
• Capital growth in the period – This is calculated as the increase in NAV in the period combined with the ordinary dividend
paid in the year.
Net asset value per ordinary share:
At 31 July 2022 2,727p
At 31 July 2021 2,664p
Net asset value growth per ordinary share 63p
Dividend paid per ordinary share:
Year ended 31 July 2022 127.5p
Capital growth in the period 190.5p
• Underlying capital growth in the period – This is calculated as capital growth in the period before net legacy building safety
expense and exceptional items per share.
Capital growth in the period 190.5p
Net legacy building safety expense per share 223.9p
Underlying capital growth in the period 414.4p
Net asset value at 31 July 2021 2,664p
Underlying capital growth 15.6%
• Net cash/debt – This is the cash and cash equivalents less bank debt and fixed rate sterling USPP notes. Net cash/debt dœs
not include lease liabilities, which are reported within trade and other payables on the balance sheet. The Directors consider
this to be a good indicator of the financing position of the Group. This is reconciled in note 15.
• Average net cash/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.
2022
£m
2021
£m
Cash from operations 114.6 519.6
Add: increase in capital invested in land, net of land creditors, and work-in-progress
(asdescribedabove)
458.3 90.8
Cash generated from operations before investment in land, net of land creditors,
and work-in-progress
572.9 610.4
• 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.
29. Post balance sheet events
The Group acquired 100% of the ordinary share capital of Rosconn Strategic Land Limited on 12 October 2022 for £24.8m
cash consideration.
Earlier this month, the Group also signed up to the Developers’ Pact with the Welsh Government. Similar to the Pledge, this
is a commitment to remediate buildings over 11 metres in height with life critical fire safety issues, which were constructed in
Wales since 1992. Reflecting our ongoing and responsible UK-wide approach to legacy building safety, the expected cost of the
remediation works in Wales was probable at the year end and is included in our provision at 31 July 2022.
Notes to the Financial Statements continued
)(
414.4p
2,664p
Accounts
186 Bellway p.l.c. Annual Report and Accounts 2022
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
Income statement
Revenue 2,957.7 3,213.2 2,225.4 3,122.5 3,536.8
Operating profit 652.9 674.9 321.7
3
531.5
3
653.2
3
Net finance expenses (13.6) (14.4) (13.4) (11.1) (12.1)
3
Share of results of joint ventures 1.8 2.1 1.0 10.4 9.3
Profit before taxation 641.1 662.6 309.3
3
530.8
3
650.4
3
Income tax expense (121.2) (124.0) (57.6)
3
(98.1)
3
(131.9)
3
Profit for the year (all attributable to equity holders of
the parent)
519.9 538.6 251.7
3
432.7
3
518.5
3
Balance sheet
ASSETS
Non-current assets 59.0 83.2 99.3 102.1 71.6
Current assets 3,485.5 3,806.7 3,984.3 4,574.7 4,913.5
LIABILITIES
Non-current liabilities (84.9) (99.4) (133.8) (316.9) (646.3)
Current liabilities (902.5) (869.3) (955.8) (1,072.1) (971.0)
EQUITY
Total equity 2,557.1 2,921.2 2,994.0 3,287.8 3,367.8
Statistics
Number of homes sold 10,307 10,892 7,522 10,138 11,198
Average price of new homes £284.9k £292.0k £293.1k £306.5k £314.4k
Underlying gross margin
2
25.6%
**
24.6% 19.0%
3
20.9%
3
22.3%
3
Gross margin 25.6%
**
24.6% 15.7% 19.2% 12.5%
Underlying operating margin
2
22.1% 21.0% 14.5%
3
17.0%
3
18.5%
3
Operating margin 22.1% 21.0% 11.2% 15.4% 8.7%
Basic earnings per ordinary share 423.4p 437.8p 156.6p 316.9p 196.9p
Dividend per ordinary share 143.0p 150.4p 50.0p 117.5p 140.0p
Underlying return on capital employed
2
27.2% 24.7% 10.8%
3
16.9%
3
19.4%
3
Return on capital employed
2
27.2% 24.7% 8.3% 15.2% 9.2%
Gearing
2
– – – – –
Net asset value per ordinary share
2
2,079p 2,372p 2,427p 2,664p 2,727p
Land portfolio – plots with implementable DPP 26,877 26,421 28,289 30,933 32,344
Weighted average number of ordinary shares 122,779,199 123,012,723 123,205,211 123,306,035 123,227,544
Number of ordinary shares in issue at end of year 122,980,266 123,167,828 123,345,834 123,396,422 123,486,260
Notes:
** Restated due to the adoption of IFRS 15 ‘Revenue from contracts with customers’.
Five Year Record
187Bellway p.l.c. Annual Report and Accounts 2022
Accounts
External
Reporting
Frameworks
Sustainability Accounting
Standards Board (SASB)
189
Global Reporting Initiative (GRI) 194
United Nations Sustainable
Development Goals (SDGs)
199
188 Bellway p.l.c. Annual Report and Accounts 2022
Sustainability Accounting Standards Board (SASB)
The Sustainability Accounting Standards Board (SASB) is an independent not
for profit organisation which sets standards to guide the disclosure of financially
material sustainability information of companies.
Terminology used in the SASB is different from the UK marketplace, therefore we have used equivalent data where
requirements are different from established building and sustainability related standards and measures for the UK.
The following table discloses our performance against the criteria set by the SASB for the Home Builders sector. Data relates to
the period 1 August 2021 – 31 July 2022.
Throughout this section, ‘Plots’ are homes prior to completion which are equivalent to ‘Lots’.
Code SASB criteria Our approach
Land use and ecological impacts
IF-HB-16A.1 Number of (1) lots and
(2) homes delivered on
redevelopment sites
34.7% of our owned and controlled land bank plots were on brownfield land,
asatthe 31st July 2022.
39.3% of completions (excluding joint ventures).
IF-HB-160a.2 Number of (1) lots and
(2) homes delivered in
regions with High or
Extremely High Baseline
Water Stress
Data is currently unavailable.
Working towards reporting targets for the financial year ending 31st July 2023.
IF-HB-160a.3 Total amount of monetary
losses as a result of
legal proceedings
associated with
environmental regulations
There have been no material instances of monetary losses as a result of legal
proceedings associated with the environment.
189Bellway p.l.c. Annual Report and Accounts 2022
External Reporting Frameworks
Code SASB criteria Our approach
Land use and ecological impacts continued
IF-HB-160a.4 Discussion of process to
integrate environmental
considerations into site
selection, site design,
and site development
and construction
For all developments, 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.
We have appointed a Head of Biodiversity who will be working closely
with our Commercial and Land teams to ensure that we further integrate
environmental considerations into our developments and achieve our Better with
Bellway objectives.
Site selection:
• At acquisition stage, we carry out detailed due diligence on sites with regard
to flood risk and mitigation, land contamination, air quality, landscape and
biodiversity assessments.
• We consider connectivity to transport links, and potential nitrate and
phosphate issues.
• All land purchases are scrutinised by senior divisional management, prior to being
reviewed by our Group Head Office.
• Flood risk authorities specify that new developments must survive a one in one
hundred year storm with an additional risk tolerance of 30%. Our developments
meet or exceed this specification.
• We have committed to demonstrating a minimum biodiversity net gain of 10%
across all development designs submitted for planning from July 2023 onwards.
Our Land teams utilise their knowledge received from training resources and
models, as well as external ecologists, to assess biodiversity constraints and
opportunities. This is performed at the earliest stage of site selection and they are
supported by our Head of Biodiversity and Head Office teams.
Site design:
• Our Artisan house type design standards exceed statutory requirements for
energy efficiency.
• Environmental considerations are driven through our new Better with
Bellway approach.
• We are working towards a partnership with The Rivers Trust, a national
environmental NGO, to strengthen our long-term shared objectives for
sustainable, climate-resilient developments in the UK.
• In 2022, we planted 15,869 tree saplings across our developments.
Site development and construction:
• We identify and mitigate environmental impact during the development and
construction phase through the application of Group Standards.
• Our divisions are working towards being certified to IS0 14001 Environmental
Management System Standards by the financial year ended 31st July 2024.
• Our Regional Health and Safety Managers conducted 734 monitoring visits of sites
in FY22 to assess compliance with our health, safety and environmental policies.
• Over the past year, we’ve installed sustainable drainage systems on 255 of
our developments.
• We’ve implemented biodiversity plans on 137 of our developments across the UK.
• 100% of our sites have individual site waste management plans.
Sustainability Accounting Standards Board (SASB) continued
External Reporting Frameworks
190 Bellway p.l.c. Annual Report and Accounts 2022
Code SASB criteria Our approach
Workforce health and safety
IF-HB-320a.1 (1) Total recordable
incident rate (TRIR) and
(2) fatality rate for a)
direct employees and (b)
contract employees
We measure H&S performance using an Annual Injury Incidence Rate (AIIR) metric
which is per 100,000 employees. Our overall AIIR is 360.
There were no fatalities.
The health, safety, and wellbeing of our colleagues and subcontractors is our
highest priority.
Reportable injuries are those covered by the UK’s Reporting of Injuries, Diseases
and Dangerous Occurrences Regulations (RIDDOR).
Design for resource efficiency
IF-HB-320a.1 Number of homes that
obtained a certified HERS
Index Score and (2)
average score
The Energy Performance Certificate (EPC) is a UK equivalent to the HERS Index.
Properties are assessed by an accredited assessor.
97% of our homes achieve an energy efficiency rating of either A or B, this
significantly exceeds the new build industry average of 84%. This statistic is
based on analysis of actual final EPC data from 1st August 2021 to 31st July
2022. The sample analysed covered 6,242 homes accounting for 55% of the
completions in the period.
The construction specification of every Bellway home includes high levels of
thermal insulation, the detailed house type designs incorporate calculated thermal
bridging thereby reducing a significant source of heat loss. Our homes also feature
highly efficient services and appliances. Solar PV arrays and mechanical ventilation
systems with heat recovery feature in a growing number of our homes.
IF-HB-410a.2 Percentage of installed
water fixtures certified to
WaterSense
®
specifications
100% of total home completions in FY22 were designed to a flow of less than 115
litres per person per day.
Bellway Homes incorporate low flow outlets & sanitary ware to achieve a low
water consumption rate, this strategy permanently reduces water consumption.
IF-HB-410a.3 Number of homes
delivered certified to a
third-party multi-attribute
green building standard
The UK dœs not currently have an established third party multi-attribute green
building standard for homes.
All our homes are subject to UK building regulations.
IF-HB-410a.4 Description of risks and
opportunities related to
incorporating resource
efficiency into home
design, and how benefits
are communicated
to customers
We continuously review risks and opportunities in relation to resource efficiency in
our Artisan collection house designs.
We do this through internal workshops, working directly with our supply chain
partners, collaborating in sector forums and testing through customer research.
It is recognised that the low carbon home of the future is not necessarily a low
running cost home. We are conducting research projects that include energy
monitoring and reporting to identify the prime configuration of fabric, services
and renewable energy generation to ensure affordable running costs for
our customers.
These benefits will be communicated to the customer via improved EPC ratings.
The greater use of timber products increases construction efficiency and reduces
the amount of embodied carbon in a home we build.
As part of Customer First we communicate with our customers throughout their
customer journey, utilising various channels to keep them informed about all
aspects of their new home.
191Bellway p.l.c. Annual Report and Accounts 2022
External Reporting Frameworks
Code SASB criteria Our approach
Community impacts of new developments
IF-HB-410b.1 Description of how
proximity and access to
infrastructure, services,
and economic centres
affect site selection and
development decisions
Proximity and access to infrastructure, services, and economic centres influence
site selection and development decisions.
For each site, we assess the current level of facilities and services to see if they
are sufficient to support the scale of proposed development. We aim for future
residents to have convenient access to local facilities and services.
Where it is deemed the current level of facilities or services are not adequate to
support the development, we contribute to improve local facilities.
The UK’s NPPF also requires consideration of the opportunities presented by
existing or planned investment in infrastructure.
During 2022, we contributed £117.2 million to local communities via planning
obligations (2021: £71.3 million) to fund infrastructure and facilities.
Around 85% of our completions were within 400m of a public transport node.
IF-HB-410b.2 Number of (1) lots and
(2) homes delivered on
infill sites
This data is not currently collected. However, the majority of brownfield land in the
UK would meet the definition of an infill site.
11,361 (34.7%) of our owned and controlled land bank plots at 31 July 2022 were on
brownfield land.
4,404 (39.3%) home completions (excluding joint ventures) were on
brownfield land.
IF-HB-410b.3 (1) Number of homes
delivered in compact
developments and (2)
average density
According to SASB definitions, all our schemes meet the criteria for
compact development.
Climate change adaptation
IF-HB-420a.1 Number of lots located in
100-year flood zones
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.
Flood risk authorities specify that new developments must survive a one in
hundred year storm plus 30%.
We ensure our developments meet and very often exceed this specification.
IF-HB-420a.2 Description of climate
change risk exposure
analysis, degree of
systematic portfolio
exposure, and strategies
for mitigating risks
We recognise climate change as a principal risk to our business and are
committed to reducing our own emissions through the setting of Science-Based
Targets (SBTs).
The assessment of, and response to climate risk is a key consideration in the
Group’s future strategy.
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, we 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.
We have clear governance to allow the business to oversee climate risks, along
with the Group’s progress on compliance with the Taskforce for Climate-related
Financial Disclosures (TCFD).
Sustainability Accounting Standards Board (SASB) continued
External Reporting Frameworks
192 Bellway p.l.c. Annual Report and Accounts 2022
Code SASB criteria Our approach
Activity metrics
IF-HB-000.A Number of controlled lots As at 31 July 2022, our short-term land bank stood at 32,344 plots.
IF-HB-000.B Number of
homes delivered
We delivered 11,292 home completions, 11,198 from wholly owned operations
along with 94 from joint ventures.
IF-HB-000.C Number of active
selling communities
We sold from 244 average active sales outlets, 242 in our wholly owned
operations and 2 in our joint ventures.
193Bellway p.l.c. Annual Report and Accounts 2022
External Reporting Frameworks
Global Reporting Initiative (GRI)
The Global Reporting Initiative (GRI) is a leading organisation used for global
sustainability reporting. This Report has been prepared in accordance with the
GRIStandards 2016: Core option.
Bellway has adopted the GRI Standards to drive forwards sustainable performance in line with our Better with Bellway strategy,
which was launched in March 2022, and embodies our approach to responsible and sustainable business practices. This is
our first time reporting against these standards and we are continuing to develop and refine our approach, therefore these
disclosures do not meet the reporting requirements in full.
For our next reporting period, we will align with the GRI Universal Standards 2021.
Disclosure Description Cross-Reference/Direct Answer
1 Organisational Profile
102-1 Name of the organisation Bellway p.l.c.
102-2 Activities, brands, products, and services About us section: Who We Are – Pages 6 and 7
102-3 Location of headquarters Back cover of the Annual Report.
102-4 Location of operations About us section: Who We Are – Pages 6 and 7
102-5 Ownership and legal form Shareholder analysis – Page 205
Bellway is a limited liability public company listed on the
London stock exchange.
102-6 Markets served About us section: Who We Are – Pages 6 and 7
Key Stakeholder Relationships – Pages 65 to 74
102-7 Scale of the Organisation About us section: Who We Are – Pages 6 and 7
Nomination Report – Pages 95 and 96
Chief Executive’s Market and Operational Review:
Market – Pages 26 to 29
Financial and Strategic Highlights – Pages 4 and 5
Financial Statements – Page 144
102-8 Information on employees and other workers Nomination Report – Pages 95 and 96
Key Stakeholder Relationships – Pages 65 to 74
As of the end of FY22, our employee and worker data is per the
table below:
UK Casual Fixed-term contract Permanent Temporary Total
Male 1 4 2,101 8 2,114
Female 1 1 917 9 928
Full time Part time
Male 2,098 16 2,114
Female 787 141 928
102-9 Supply chain Key Stakeholder Relationships – Pages 65 to 74
Chief Executive’s Market and Operational Review
– Pages 26 to 29
Better with Bellway section – Pages 34 to 64
102-10 Significant changes to the Organisation
anditssupply chain
There have been no significant changes during
theFinancial Year.
102-11 Precautionary principle or approach Risk Management section – Pages 75 to 78
102-12 External initiatives Better with Bellway – Pages 34 to 64
102-13 Membership of associations Key Stakeholder Relationships – Pages 65 to 74
External Reporting Frameworks
194 Bellway p.l.c. Annual Report and Accounts 2022
Disclosure Description Cross-Reference/Direct Answer
2 Strategy
102-14 Statement from senior decision-maker Chairman’s statement – Pages 24 and 25
Chief Executive’s Market and Operational Review
– Pages 26 to 29
102-15 Key impacts, risks, and opportunities Risk Management section – Pages 75 to 78
3 Ethics and Integrity
102-16 Values, principles, standards, and norms
of behaviour
Better with Bellway section – Pages 46 to 53
4 Governance
102-18 Governance structure Division of Responsibilities – Pages 92 to 94
5 Stakeholder Engagement
102-40 List of stakeholder groups Key Stakeholder Relationships – Pages 65 to 74
102-41 Collective bargaining agreements The number of collective bargaining agreements is zero.
102-42 Identifying and selecting stakeholders Key Stakeholder Relationships – Pages 65 to 74
102-43 Approach to stakeholder engagement Key Stakeholder Relationships – Pages 65 to 74
102-44 Key topics and concerns raised Key Stakeholder Relationships – Pages 65 to 74
6 Reporting Practice
102-45 Entities included in the consolidated
financial statements
Financial Statements – Page 175
102-46 Defining report content and topic boundaries Better with Bellway – Pages 34 to 64
102-47 List of material topics Table at the end of this document.
102-48 Restatements of information No restatements of information.
102-49 Changes in reporting No changes in reporting.
102-50 Reporting period Year ended 31 July 2022.
102-51 Date of most recent report 04 November 2021.
102-52 Reporting cycle Annual.
102-53 Contact point for questions regarding
the report
investor.relations@bellway.co.uk
102-54 Claims of reporting in accordance with the
GRI Standards
This report has been prepared in accordance with the GRI
Standards: Core option
102-55 GRI content index This index serves as the GRI content index
102-56 External assurance Independent Auditor Report – Pages 130 to 139
195Bellway p.l.c. Annual Report and Accounts 2022
External Reporting Frameworks
Disclosure Description Cross-Reference/Direct Answer
GRI 103: Management Approach
103-1 Explanation of the material topic and
its Boundary
Better with Bellway – Pages 34 to 64
We conducted a full review of our corporate responsibility
activities, engaging with Key Stakeholders, to help shape
our new Better with Bellway sustainability strategy, this
was launched earlier in 2022. The objective was to create
an integrated strategy that would go above and beyond
the traditional Environmental, Social & Governance (‘ESG’)
and corporate responsibility topics to align itself with our
commercial strategy. The new strategy addresses the key
sustainability risks and opportunities for Bellway.
Better with Bellway strategy was assessed by an external
provider against the GRI standard’s to identify the appropriate
material topics which best match our strategic pillars within the
new strategy.
103-2 The Management approach and
its components
Better with Bellway – Pages 34 to 64
103-3 Evaluation of the Management approach Better with Bellway – Pages 34 to 64
GRI 201: Economic Performance 2016
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
Risk Management – Pages 75 to 78
201-1 Direct economic value generated
and distributed
Better with Bellway – Pages 34 to 64
Financial Statements Pages 142 to 188
Our Strategy – Pages 14 and 15
GRI 301: Materials
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
Risk Management – Pages 75 to 78
301-1 Materials used by weight or volume Better with Bellway – Pages 34 to 64
Information is currently unavailable as we are working
towards this.
301-3 Reclaimed products and their
packaging materials
Better with Bellway – Pages 56 and 57
GRI 302: Energy
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
302-1 Energy consumption within the Organisation Better with Bellway – Pages 42 to 45
302-3 Energy intensity Better with Bellway – Pages 42 to 45
GRI 304: Biodiversity
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
304-3 Habitats protected or restored Better with Bellway – Pages 34 to 64
Global Reporting Initiative (GRI) continued
External Reporting Frameworks
196 Bellway p.l.c. Annual Report and Accounts 2022
Disclosure Description Cross-Reference/Direct Answer
GRI 305: Emissions
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
Risk Management – Pages 75 to 78
1.2 Management approach disclosures Better with Bellway – Pages 34 to 64
305-1 Direct (scope 1) GHG emissions Better with Bellway – Pages 42 to 45
305-2 Energy indirect (scope 2) GHG emissions Better with Bellway – Pages 42 to 45
305-3 Other indirect (scope 3) GHG emissions Better with Bellway – Pages 42 to 45
305-4 GHG emissions intensity Better with Bellway – Pages 42 to 45
305-5 Reduction of GHG emissions Better with Bellway – Pages 42 to 45
GRI 306: Waste
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
Risk Management – Pages 75 to 78
306-3 Waste generated Better with Bellway – Pages 58 and 59
GRI 403: Occupational Health and Safety
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
403-2 Hazard identification, risk assessment and
incident investigation
Better with Bellway – Pages 54 and 55
403-3 Occupational health services Better with Bellway – Pages 54 and 55
403-4 Worker participation, consultation, and
communication on occupational health
and safety
Better with Bellway – Pages 54 and 55
403-5 Worker training on occupational health
and safety
Better with Bellway – Pages 54 and 55
403-6 Promotion of worker health Better with Bellway – Pages 54 and 55
403.9 Work related injuries Better with Bellway – Pages 54 and 55
Information is incomplete as we are unable to split information
by employees and subcontractors.
GRI 405: Diversity and Equal Opportunity
1.1 Management approach disclosures Nomination Report – Pages 95 and 96
405-1 Diversity of governance bodies
and employees
Nomination Report – Pages 95 and 96
With the Introduction of a new HR processes we aim to be able
further expand our diversity reporting, including age.
405-2 Ratio of basic salary and remuneration of
women to men
Gender Pay Reporting – www.bellwayplc.co.uk/investor-
centre/governance/statements/statements/gender-pay-gap-
report-2021
197Bellway p.l.c. Annual Report and Accounts 2022
External Reporting Frameworks
Disclosure Description Cross-Reference/Direct Answer
GRI 409: Forced or Compulsory Labour
1.1 Management approach disclosures Risk Management – Pages 75 to 78
409-1 Operations and suppliers at significant risk for
incidents of forced or compulsory labour
Better with Bellway – Pages 56 and 57
We have assessed the overall risk of modern slavery to be
low, however we recognise that the risk associated with
subcontractors and suppliers is higher than that for our
employees given a number of mitigations sit outside of our
direct control. The risk of Modern Slavery occurring in any of
these areas is being proactively managed through site audits,
welfare checks, and toolbox talks in order to raise awareness of
the signs amongst staff.
GRI 413: Local Communities
1.1 Management approach disclosures Better with Bellway – Pages 34 to 64
413-1 Operations with local community
engagement, impact assessments,
anddevelopment programs
Better with Bellway – Pages 38 and 39
Global Reporting Initiative (GRI) continued
External Reporting Frameworks
198 Bellway p.l.c. Annual Report and Accounts 2022
UN Sustainable Development Goals (SDGs)
Sustainability is at the heart of our new Better with Bellway strategy, as part of the
work establishing our this strategy, we have benchmarked where it aligns with the
United Nations Sustainable Development Goals (SDGs).
The SDGs are a collection of 17 interlinked global goals designed to be a “shared blueprint for peace and prosperity for people
and the planet, now and into the future”. With a 2030 deadline set for the SDGs, we recognise that our new sustainability
strategy needs to contribute to rapid action and improvement.
Our eight strategic business priorities included within Better with Bellway, which cover every aspect of our business from land
purchases through to how we interact with our customers, are designed to put our long-term commitment to responsible
and sustainable practice at the core of our operational strategy, please see the Better with Bellway section for more details,
pages34to 64.
As part of our sustainability strategy, we aim to support progress on the SDGs, and all of the external targets that form Better with
Bellway’s eight business priorities were mapped against the 17 SDGs and the 169 targets that sit within them.
Our strongest alignment to the SDGs are outlined below:
We build energy-efficient
homes for our customers
which reduces running
costs and cuts carbon
emissions. We also aim to
reduce energy use in our
business, including the use
renewable electricity.
We contribute to UK GDP
through our construction
activities and we are a
significant employer,
investing in skills and training
for young people.
We build developments and
infrastructure that benefit
our customers and the
surrounding communities.
We aim to improve diversity
within our business and
work with our suppliers to
improve standards in our
supply chain and address
modern slavery risks.
Aligns to the Better
with Bellway Carbon
Reductions priority.
Read more on pages 42 to 45
Aligns to the Better with
Bellway Employer of
Choice priority.
Read more on pages 40 and 41
Aligns to the Better with
Bellway Building Quality
Homes, Safely priority.
Read more on pages 54 and 55
Aligns to the Better with
Bellway Employer of
Choice priority.
Read more on pages 40 and 41
We aim to be a resource
efficient business, minimising
waste that is produced from
our construction activities.
Our construction activities
produce emissions that
contribute to climate
change. We aim to reduce
that impact through our
science based targets which
target our significant carbon
producing activities.
We aim to be a responsible
developer by adopting
biodiversity net gain
principles for all new
developments, and
ensuring that the raw
materials we buy have
been sourced responsibly
to minimise impacts on the
wider environment.
Aligns to the Better
with Bellway Resource
Efficiency priority.
Read more on pages 58 and 59
Aligns to the Better
with Bellway Carbon
Reductions priority.
Read more on pages 42 to 45
Aligns to the Better with
Bellway Biodiversity priority.
Read more on pages 60 and 61
199Bellway p.l.c. Annual Report and Accounts 2022
External Reporting Frameworks
Other
Information
Glossary 201
Advisors and Group General
Counsel and Company Secretary
203
Shareholder Analysis
and Financial Calendar
204
200 Bellway p.l.c. Annual Report and Accounts 2022
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.
Biodiversity Net Gain (BNG)
Is an approach to development, and land management, that
aims to leave the natural environment in a measurably better
state than it was beforehand.
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.
DLUHC
Department for Levelling up, Housing and Communities.
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.
Global Reporting Initiative (GRI)
GRI standards are global standards for sustainability reporting.
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.
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.
201Bellway p.l.c. Annual Report and Accounts 2022
Other Information
New Homes Ombudsman Service (NHOS)
Has been introduced with the aim to provide dispute
resolution for, and determine complaints by, buyers of new
build homes.
New Homes Quality Board (NHQB)
An independent not-for-profit body which was established
for the purpose of developing a new framework to oversee
reforms in the build quality of new homes and the customer
service provided by developers.
New Homes Quality Code (NHQC)
An industry code of practice that lays out a mandatory set of
requirements which must be adopted and observed by all
registered developers.
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 to 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 tax, introduced in April 2022, which is charged at
a rate of 4% on certain 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.
Science Based Target initiative (SBTi)
Science-based targets provide companies and financial
institutions with a clearly defined pathway to future-proof
growth by specifying how much and how quickly they need
to reduce their greenhouse gas emissions.
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.
Sustainability Accounting Standards Board(SASB)
SASB have developed a set of industry standards which
identify the minimal set of financially material sustainability
topics and their associated metrics for the typical company in
an industry to report against.
Task Force on Climate Related Financial
Disclosures (TCFD)
TCFD was created by the Financial Stability Board to develop
consistent climate-related financial risk disclosures.
Total Shareholder Return (TSR)
The total return of a stock to an investor, or the capital gain
plus dividends.
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
184 to 187.
United Nations Sustainable Development Goals
(SDGs)
The SDGs are a collection of 17 interlinked global goals
designed to be a ‘shared blueprint for peace and prosperity
for people and the plant, now and into the future’.
Glossary continued
Other Information
202 Bellway p.l.c. Annual Report and Accounts 2022
Advisers and Group General Counsel and Company Secretary
Group General Counsel and Company Secretary
and Registered Office
Simon Scougall
Bellway p.l.c.
Registered number 1372603
Registrars, Transfer Office and
ShareholderQueries
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
UnitedKingdom 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
HSBC Holdings plc
Lloyds Banking Group plc
National Westminster Bank plc
Santander UK plc
Svenska Handelsbanken AB
Auditor
Ernst & Young LLP
Solicitor
Slaughter and May
203Bellway p.l.c. Annual Report and Accounts 2022
Other Information
Shareholder Analysis and Financial Calendar
Financial Calendar
Shareholders by size of holding at 31 July 2022 Holdings Shares
Number % Holding %
0 – 2,000 1,670 68 886,009 1
2,001 – 10,000 354 15 1,528,113 1
10,001 – 50,000 176 7 4,424,269 4
50,001 and over 242 10 116,647,869 94
Total 2,442 100 123,486,260 100
Shareholders by type at 31 July 2022 Holdings Shares
Number % Holding %
Private shareholders 1,653 68 2,566,481 2
Investment trusts 8 <1 589 <1
Deceased Accounts 24 1 28,728 <1
Nominee companies 656 27 106,724,412 86
Limited companies 35 1 151,232 <1
Bank and bank nominees 39 2 13,251,777 11
Other institutions 27 1 763,041 1
Total 2,442 100 123,486,260 100
Final 2021/22 dividend – ex-dividend date 1 December 2022
Final 2021/22 dividend – record date 2 December 2022
AGM 16 December 2022
DRIP election date for final 2021/22 dividend 16 December 2022
Final 2021/22 dividend – payment date 11 January 2023
Trading update 9 February 2023
Announcement of 2022/23 interim results 28 March 2023
Other Information
204 Bellway p.l.c. Annual Report and Accounts 2022
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Bellway p.l.c.
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www.bellwayplc.co.uk