This March, it has been revealed that Bellway has now sold its interest in its JV organisation alongside the Greater London Authority. The partnership, called Barking Riverside, has seen such interest pass to L&O New Homes, as Bellway now looks to utilise the funds acquired to reassess the strategic focus of the company’s accounts and shareholder returns.
In the sale, Bellway received £17m up front, with a further £43.5m expected to come to the company over the course of the following three years. And while this is already a significant amount of funds for the company to now play with, additional savings will also been seen as the organisation no longer sees its costs inflated in the provision of infrastructure and maintenance for the site.
Looking at where the company will utilise the funds in a manner deemed best for the continuity of the company, Bellway intends to invest the disposable proceeds into a number of new land opportunities, with the hopes of securing considerable returns which can then create further financial value and returns for shareholders. Providing example to such sites the company will be looking at, Ted Ayres, Chief Executive of Bellway nodded to the company’s site in Horsham, originally contracted this march for 165 residential houses – most notable with this project is the provision of an outline planning permission, highlighting projected returns of greater than 20%.
Yet, not completely stepping away from the site, Bellway has also entered into another, optional deal whereupon it will be able to purchase some 2,600 plots for development in the remainder for the Barking Riverside site, which is on top of the 438 plots already owned by the partnership.
Of course, the deal comes at a good time for Bellway also, with the company already making great ground in securing enviable revenues and profits for shareholders. In fact, half-year revenues up to this January have showcased a 40% jump in profit, and a 30% rise in revenue achieved. As such, it can only be hoped that the recent development will see these figures rise yet further for the company as it continues to strategically plan for further financial success.