Bellway and Persimmon put divis on hold and start closing construction sites

Bellway and Persimmon on Wednesday joined the rush of companies postponing dividends, as the housebuilders warned of sales drops due to Covid-19 disruption.

Firms across different industries have been putting shareholder payouts on ice in favour of shoring up their balance sheets in the virus crisis.

Housebuilders have seen recent trade battered by the Government’s travel restrictions and work from home guidance leading to fewer house viewings.

FTSE 100 firm Persimmon said it had an “encouraging” start to the year but is now “preparing for a significant delay in the timing of legal completions, a rise in cancellation rates and a material slowdown in new sales”.

The firm, which has been trying to rebuild its reputation after complaints about construction quality and excessive pay, has scrapped a proposed 125p per share interim dividend. It will also postpone a proposed final dividend payment of 110p per share.

Persimmon added that “given the level of continued uncertainty around economic and business activity”, it was not possible to forecast its annual profits.

Meanwhile, Bellway said a decision to pay an interim dividend will be postponed until later in the year.

The company warned: “The unprecedented challenge and uncertainty presented by Covid-19 will result in a period of substantial disruption.”

Bellway’s chief executive Jason Honeyman said the group last week saw a big drop in site visit numbers, a fall in reservations, and a surge in cancellations. He expects sales to fall further.

His update came as Bellway posted results for the six months to January 31. It boosted revenues 3.6% to £1.5 billion but saw pre-tax profits decrease 7% to £291.8 million. That was due to higher build costs and the company benefiting a year earlier from selling a number of expensive London luxury flats.

Both Bellway and Persimmon also said they have, or will, starting closing construction sites. They join a number of businesses closing sites amid growing concerns over government guidance they can stay open. The government has said people working on sites must follow Public Health England guidance on social distancing.

Persimmon’s chief executive David Jenkinson said: “Our primary concern is the safety and well-being of our customers, staff, contractors and suppliers.”

Bellway’s Honeyman told the Evening Standard that he has started to close down UK sites, with the intention of all being shut by Friday. That includes works in Sydenham and Bexleyheath.

Honeyman said: “I wasn’t convinced we could keep everyone safe on site. It’s very difficult to police that and ensure safety on site.”