Better with

Bellway

Bellway p.l.c.

Annual Report and Accounts 2023

Always

striving

for better

Better with Bellway encapsulates

our philosophy as a responsible

homebuilder. We strive to

operate our business in an ethical

and sustainable manner whilst

creating better long-term value

for the benefit of our customers,

people, suppliers, shareholders

and the wider community.

In This Report

Financial and

Strategic Highlights

Who We Are 6

Principal KPIs 10

Investment Case 14

Our Strategy 16

Our Business Model 18

Our Marketplace 24

Chair’s Statement 28

Chief Executive’s Market

andOperational Review

Group Finance

Director’s Review

Better with Bellway Overview 38

Better with Bellway Strategy

and Priorities

Section 172 Statement 63

Key Stakeholder Relationships 64

Risk Management 75

Principal Risks 79

Task Force on Climate-related

Financial Disclosures (TCFD)

Sustainability Accounting

Standards Board (SASB)

Non-Financial and Sustainability

Information Statement

About Us

Strategic Report

Group Income Statement 162

Group Statement of

Comprehensive Income

163

Statements of Changes in Equity 164

Balance Sheets 166

Cash Flow Statements 167

Accounting Policies 168

Notes to the

Financial Statements

170

Five Year Record 209

Accounts

Glossary 211

Advisers and Group

General Counsel and

Company Secretary

213

Shareholder Analysis

andFinancial Calendar

214

Other Information

Chair’s Statement on

Corporate Governance

100

Board of Directors and

Group General Counsel and

Company Secretary

102

Board Activities and Decisions 104

Board Leadership 106

Division of Responsibilities 107

Composition, Succession

and Evaluation

111

Nomination Committee Report 112

Audit Committee Report 114

Remuneration Report 126

Sustainability

Committee Report

146

Directors’ Report 147

Independent Auditor’s Report 151

Governance

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 alternative performance measures when reviewing

the performance of the Group against its strategy.

Definitions of the alternative performance measures,

anda reconciliation to statutory performance measures,

are included in note 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 nil plots (2022 – 237

plots), with a contract value of nil (2022 – £12.7 million)

across no sites (2022 – 1 site).

5 Includes the Group’s share of land owned and

controlled through joint venture partners comprising

935plots (2022 – 962 plots).

6 As measured by the Home Builders’ Federation using

the eight-week NHBC Customer Satisfaction survey.

7 Comparatives are for the year ended 31 July 2022 or

asat 31 July 2022 (‘2022’) unless otherwise stated.

1Bellway p.l.c. Annual Report and Accounts 2023

About Us

Financial and Strategic Highlights 4

Who We Are 6

2 Bellway p.l.c. Annual Report and Accounts 2023

A street scene of our Roman Gate

development in Melton Mowbray.

The Goldsmith showhome at

WavendonView, Wavendon.

Bellway Assistant Site Manager

withcustomers at Sheasby Park.

Better homes,

better value

Evolving from a local family business to a FTSE 250 company,

Bellway has been building exceptional quality new homes

throughout the UK for more than 75 years, creating outstanding

properties in desirable locations.

About Us

3Bellway p.l.c. Annual Report and Accounts 2023

Financial and Strategic Highlights

Resilient financial performance



Year ended

31 July 2023

Year ended

31 July 2022 Movement

Housing completions 10,945 11,198 (2.3%)

Revenue £3,406.6m £3,536.8m (3.7%)

Underlying performance measures:

Gross profit (underlying) £687.3m

2,3

£787.0m

2,3

(12.7%)

Gross margin (underlying) 20.2%

2,3

22.3%

2,3

(210bps)

Operating profit (underlying) £543.9m

2,3

£653.2m

2,3

(16.7%)

Operating margin (underlying) 16.0%

2,3

18.5%

2,3

(250bps)

Profit before taxation (underlying) £532.6m

2,3

£650.4m

2,3

(18.1%)

Earnings per share (underlying) 328.1p

2,3

420.8p

2,3

(22.0%)

RoCE (underlying) 15.8%

2,3

19.4%

2,3

(360bps)

Statutory and other measures:

Net legacy building safety expense £49.6m £346.2m (85.7%)

Profit before taxation £483.0m £304.2m +58.8%

Earnings per share 297.7p 196.9p +51.2%

Proposed total dividend per share 140.0p 140.0p –

Net asset value per share 2,871p

2,727p

+5.3%

Net cash £232.0m

£245.3m

(5.4%)

Land bank (total plots) 98,164

97,706

+0.5%

Summary

Resilient performance while maintaining operational strength in a challenging market.

Robust housing output and financial performance

in line with our expectations

• Near record housing completions of 10,945 homes

(2022–11,198), at an overall average selling price of £310,306

(2022 – £314,399).

• Total revenue of £3,406.6 million (2022 – £3,536.8 million),

areduction of 3.7%.

• The Group’s programme of accelerating the construction

of social homes partially offset weaker private demand,

whichwas impacted by higher mortgage interest rates,

cost-of-living pressures and the end of Help-to-Buy.

• The overall reservation rate reduced by 28.4% to 156 per

week (2022 – 218) and the private reservation rate decreased

by 35.9% to 109 per week (2022 – 170), representing a private

reservation rate per site per week of 0.46 (2022 – 0.70).

• The underlying operating margin was 16.0%

2,3

(2022 – 18.5%),

with the reduction mainly reflecting the effect of build cost

and overhead inflation, extended site durations because of

slower reservation rates and the increased use of targeted

selling incentives.

• Underlying profit before taxation was £532.6 million

2,3

(2022– £650.4 million) and in line with our expectations.

• Underlying RoCE was 15.8%

2,3

(2022 – 19.4%) with the

reduction predominantly driven by the lower underlying

operating margin.

Strong balance sheet and value-driven approach

to capital allocation

• Strong balance sheet, with year-end net cash of

£232.0 million

(2022 – £245.3 million) and low adjusted

gearing, inclusive of land creditors, of 4.0%

(2022 – 4.4%)

provides resilience and strategic flexibility.

• The net asset value per share (‘NAV’) increased by 5.3% to

2,871p

(2022 – 2,727p), with the growth supported by the

share buybacks undertaken during the year.

• The proposed total dividend per share has been held

at 140.0p (2022 – 140.0p), representing dividend cover

of 2.3 times

2,3

underlying earnings and in line with

previous guidance.

• In the current financial year and in line with Board’s

previously stated target, underlying dividend cover will

bearound 2.5 times

2,3

• The £100 million share buyback programme launched

on 28 March 2023 is progressing well, with 3.8 million

shares purchased at a cost of around £83 million as at

1 October 2023.

• Looking ahead, the strength of our land bank and

balance sheet provide the Group with optionality,

and the reinvestment of capital into compelling land

opportunities will continue to be balanced with future

shareholder returns.

About Us

4 Bellway p.l.c. Annual Report and Accounts 2023

Clear strategic priorities

High-quality land bank supports outlet opening

programme and long-term growth ambitions

• The strength of our overall land bank, which comprises

98,164 plots

(2022 – 97,706 plots), enables our land

teams toremain highly selective with investment in the

year ahead, without hindering the Group’s long-term

growth ambitions.

• Investment activity remains focused on securing land

interests which offer compelling and enhanced financial

returns and where possible, have significant flexibility in

thecontract terms.

• Bellway has a strong owned and controlled land bank

which provides good visibility with regards to sales outlet

growth in the current financial year and beyond.

• Reflecting the challenging market backdrop and the depth

of our land bank, investment in new land was significantly

lower than the prior year, with only 4,715 plots

contracted

(2022– 19,089 plots) across 35 sites

(2022 – 107 sites).

We have also continued to review previously contracted

land and decided not to proceed with the purchase of 886

plots across 4 previously approved sites.

• Further expansion of our strategic land bank during the

year, which grew to 43,600 plots (2022 – 35,600 plots),

underpins the Group’s longer-term prospects.

‘Better with Bellway’ – our responsible and

sustainable approach to business

• Supported by several research projects underway across

the business, strong progress has been made in laying

the foundations for a lower carbon footprint as we work

towards a significant reduction in the Group’s emissions

by 2030.

• Our ongoing focus on providing high quality homes and

service for our customers has resulted in Bellway retaining

its position as a five-star

homebuilder for the seventh

consecutive year.

• We are delighted that our colleagues have raised over

£3.1 million for Cancer Research UK over the last seven

years, exceeding our target of £3.0 million.

• The Group signed the Government’s Self-Remediation

Terms (‘SRT’) in March 2023 and has also recently been

confirmed as a member of the Responsible Actors Scheme

(‘RAS’) by the Department of Levelling Up, Housing and

Communities (‘DLUHC’).

• The SRT has provided improved clarity on the standards

required for internal and external works on legacy buildings.

As a result, we expect a step up in the level of remediation

work carried out by our Building Safety division on legacy

schemes in the current financial year.

• We have provided an additional net £49.6 million in relation

to legacy building safety, as an adjusting item, which includes

a net £43.4 million charge in the second half. The charge in

the second half includes a provision of £30.5 million in relation

to an isolated design issue identified with an apartment

scheme built 12 years ago in Greenwich, London.

Recent trading and outlook

• Since the start of the new financial year, customerdemand

continues to be affected by mortgage affordability constraints,

with reservations below the comparative rates in the

prior year.

• In the nine weeks since 1 August, overall weekly reservations

were 133 per week (1 August to 2 October 2022 – 191) and

the private reservation rate was 99 per week (1 August to

2 October 2022 – 136).

• The private reservation rate includes a bulk sale to a

private rental sector investor, on compelling financial terms,

comprising 71 homes (1 August to 2 October 2022 – nil).

The private reservation rate per site per week in the period

was 0.41 (1 August to 2 October 2022 – 0.58), including

a contribution of 0.03 (1 August to 2 October 2022 – nil)

fromthe bulk sale.

• The Group has a lower, yet still sizeable forward sales

position with a value of £1,232.3 million

as at 1 October

(2 October 2022 – £2,093.8 million). The order book

comprised 4,636 homes (2 October 2022 – 7,257 homes),

ofwhich 71% were exchanged (2 October 2022 – 71%).

• Given the reduced order book and prevailing lower

reservation rates, there will be a material reduction in

volume output in the current financial year. Based on the

average private reservation rate per site per week of 0.46

achieved in financial year 2023, the Group is targeting to

deliver completions of around 7,500 homes (2023 – 10,945

homes), and to end the year with a higher order book

(2023– 4,411 homes) to serve as a platform for a return to

growth beyond the current financial year.

• The Board notes however, that a wider than usual range

of outcomes are possible, and the final volume outturn

will depend on the trajectory of mortgage interest rates

and the strength of demand in the autumn and spring

selling seasons.

• Overall, headline pricing has remained firm across our

regions, although targeted incentives continue to be used

to attract customers and secure reservations. In financial

year 2024 we currently expect the overall average selling

price to be around £295,000 (2023 – £310,306), withthe

moderation from 2023 primarily reflecting a higher

expected proportion of social housing completions

andacontinued use of incentives.

• In the near term, we anticipate headwinds from lower

volume output, ongoing pressures of cost inflation and the

use of sales incentives to persist. Overall, we expect these

factors, together with the effect of extended site durations,

to lead to a reduction in the underlying operating margin

2,3

of at least 600 basis points in the current financial year.

• There is a shortage of high-quality and energy efficient homes

across the country and the long-term fundamentals of the UK

housebuilding industry remain attractive. The Group’s balance

sheet and operational strengths combined with the depth

of our land bank provide an excellent platform for Bellway to

capitalise on future growth opportunities when they arise.

About Us

5Bellway p.l.c. Annual Report and Accounts 2023

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.

545

Homes sold

The Ashberry brand launched in 2014 and is typically offered on larger sites,

alongside our Bellway brand, to provide two differentiated outlets, using

different elevational treatments and internal layouts, and therefore offering

greater customer choice. This also has the advantage of improving sales rates,

often more than can be achieved through using two Bellway outlets.

1,226

Homes sold

Our three brands meet

the needs of our customers

Who We Are

Bellway is our main brand. Bellway began as a small family business in 1946,

with a passion for building high quality homes in carefully selected locations

inspired by the needs of families. To this day, we maintain those same core

values, combining our decades of expertise with the local personalised care

that Bellway is known for.

9,174

Homes sold

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 high level of service.

About Us

6 Bellway p.l.c. Annual Report and Accounts 2023

Localised operations

acrossthe UK

We currently operate from 21 divisions,

following the introduction of our new

Building Safety division in August 2022,

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 of our

customers and contribute to creating strong

local communities.

The divisional teams are supported by our

Regional Chairs and our specialist Group teams.

21 divisions

covering the main population centres across

England, Scotland and Wales

2,979 people

employed in the Group as at 31 July 2023.

Guided by a

clearpurpose

Divisional Office Locations

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.

About Us

7Bellway p.l.c. Annual Report and Accounts 2023

Strategic

Report

Principal KPIs 10

Investment Case 14

Our Strategy 16

Our Business Model 18

Our Marketplace 24

Chair’s Statement 28

Chief Executive’s Market

and Operational Review

Group Finance Director’s Review 34

Better with Bellway Overview 38

Better with Bellway Strategy

and Priorities

Section 172 Statement 63

Key Stakeholder Relationships 64

Risk Management 75

Principal Risks 79

Task Force on Climate-related

FinancialDisclosures (‘TCFD’)

Sustainability Accounting

Standards Board (‘SASB’)

Non-Financial and Sustainability

InformationStatement

8 Bellway p.l.c. Annual Report and Accounts 2023

Aerial view of

our Westbrook

Moorings

development

inHertfordshire.

Couple laying a

brick in their new

home with Assistant

Site Manager

MaddieDale.

Adam, Rebecca and Sofia enjoying their

new home at Wellfield Rise in Wingate.

The Bowyer at our Kingfisher Green

development in Rainham.

Creating better

communities

Here at Bellway, we are proud of the 5-star

homebuilder

award we received in the HBF’s most recently published

eight-week survey, but our aim is to go further.

Strategic Report

9Bellway p.l.c. Annual Report and Accounts 2023

Principal KPIs

The Group has ten principal KPIs, which are shown below. Our secondary performance measures,

which support these KPIs, are shown on pages 18 to 23.

Financial and Operational KPIs

16.0%

(250bps)

16.0

18.5

17.0

2021 2022 2023

Underlying operating margin (%)

(2)(3)

Underlying operating margin is before net legacy

building safety expense.

£543.9m

(16.7%)

543.9

653.2

531.5

2021 2022 2023

Underlying operating profit (£m)

(2)(3)

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.

Number of homes sold (homes)

10,945 homes

(2.3%)

10,945

11,198

10,138

2021 2022 2023

14.8%

+610bps

14.8

8.7

15.4

2021 2022 2023

Operating margin (%)

(2)

Operating margin demonstrates how efficiently the

business is being operated.

£505.3m

+63.5%

505.3

309.0

479.7

2021 2022 2023

Operating profit (£m)

Operating profit measures how efficiently the business

is being operated and of the profitability of the Group’s

core business.

This KPI illustrates how the business model

is able to support the Group’s strategy of

delivering volume growth.

Strategic Report

10 Bellway p.l.c. Annual Report and Accounts 2023

Net asset value per ordinary share (p)

(2)

2,871p

+5.3%

2,871

2,727

2,664

2021 2022 2023

15.8%

(360bps)

15.8

19.4

16.9

2021 2022 2023

Underlying return on capital employed (%)

(2)(3)

Underlying RoCE uses the underlying operating profit

as defined on page 10.

140.0p

140.0140.0

117.5

2021 2022 2023

Total dividend per ordinary share (p)

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 2023 final dividend figure is proposed.

14.7%

+550bps

14.7

9.2

15.2

2021 2022 2023

Return on capital employed (%)

(2)

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.

297.7p

+51.2%

297.7

196.9

316.9

2021 2022 2023

Earnings per ordinary share (p)

Earnings per ordinary share (‘EPS’) is a useful measure

of how profitable Bellway is, year on year.

Key:

Link to remuneration – see pages 126 to 145.

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.

Strategic Report

11Bellway p.l.c. Annual Report and Accounts 2023

Principal KPIs continued

The introduction of the Better with Bellway strategy last year has led to the ESG KPIs previously reported

to be revised. The Group has ten headline KPIs mapped to our Better with Bellway strategy. Read more

on pages 38 to 62.

Better with Bellway KPIs

Employees who would recommend

Bellway as ‘a great place to work’

3-year average score (%)

91%

(2.0ppt)

2022 2023

Employer of Choice

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.

HBF 9-month survey score (%)

80.6%

(1.5ppt)

80.6

82.1

79.9

2021 2022 2023

Customers and Communities

This KPI shows the Group’s commitment to customer

service, with the long-term aim to achieve a 90% score

by July 2026.

Scope 1 and 2 emissions (tonnes)

16,562 tonnes

(10.0%)

16,562

18,405

19,484

2021 2022 2023

Scope 3 emissions (tonnes CO

e per m

)

1.52 tonnes

+0.7%

1.52

1.51

2022 2023

Carbon Reduction

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 1.53 tonnes.

FY19 and FY22 scope 3 emissions have been restated

following improvements in our scope 3 modelling.

CRUK fundraising total (£m)

£3.14m

+£580k

3.14

2.56

1.95

2021 2022 2023

Charitable Engagement

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.

Strategic Report

12 Bellway p.l.c. Annual Report and Accounts 2023

RIDDOR incidents

221.15 incidents

(7.9%)

221.15

240.08

119.05

2021 2022 2023

Applicable employees trained on

Group Fire Safety Policy (%)

77%

+8.0ppt

2022 31/12/22

Building Quality Homes, Safely

Average 3 year RIDDOR Rate

Number of RIDDOR seven-day reportable incidents

per 100,000 site operatives. We aim to reduce

the annual RIDDOR rate to below the three year

rolling average.

This KPI demonstrates the Group’s commitment to

fire safety. In January 2023 a new Group fire safety

programme was developed and will be rolled out to

applicable staff in FY24.

Waste per home built (tonnes)

8.6 tonnes

+3.6%

8.6

8.3

8.9

2021 2022 2023

Resource Efficiency

This KPI shows the Group’s commitment to resource

efficiency, where we aim to reduce waste per

completed home by 20% to 7.1 tonnes by FY25.

100 key suppliers achieving

Gold membership of the Supply

Chain Sustainability School (%)

56%

+31.0ppt

2022 2023

Sustainable Supply Chain

Percentage of 100 key suppliers who have achieved

Gold membership of the Supply Chain Sustainability

School against a target of 75% by 31 July 2023.

Sites with 10% biodiversity net gain (%)

100%

100

2023

Biodiversity

Percentage of sites where planning permission has

been submitted, since 1 July 2023, where a 10%

biodiversity net gain is achieved.

Key:

Link to remuneration – see pages 126 to 145. Denotes flagship business priority – see pages 38 to 62.

Strategic Report

13Bellway p.l.c. Annual Report and Accounts 2023

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 22). 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

homebuilder

Rating from the eight-week Home Builders’

Federation Customer Satisfaction survey.

Investment Case

Bellway’s long-term strategy is to grow shareholder value through sustainable and disciplined volume

output, utilising the Group’s operational and balance sheet capacity combined with agility to respond

tothe challenging trading environment. This is supported by our Better with Bellway strategy (read more

on pages 38 to 62).

Growing value for

our shareholders

Our approach to land and capacity for growth

Given the depth of the Group’s land bank and the current economic

backdrop, Bellway’s activity in the land market has remained highly selective.

Investment continues to be focused on securing land interests which

offer compelling and enhanced financial returns and, wherepossible,

havesignificant flexibility in the contract terms.

Our experienced land teams continue to engage with vendors and the

disciplined growth of our land bank in recent years has provided vital

strategic flexibility and a strong platform to deliver growth in outlet numbers

in the next financial year. This is further supported by the expansion of our

strategic land bank, which underpins the Group’s longer-term prospects,

with a relatively low initial capital outlay.

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.

Strategic Report

14 Bellway p.l.c. Annual Report and Accounts 2023

Better with Bellway

Sustainability is key to our business and the 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 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.

Read more on pages 38 – 62.

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

2023 Employee Engagement Survey show that 89% 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.

Strategic Report

15Bellway p.l.c. Annual Report and Accounts 2023

Strategic priorities

As set out in the Chair’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 13.

Bellway’s strategy is made up of three pillars: long-term 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.

A focused strategy

1. Long-term volume growth

Overview

Delivering disciplined long-term volume growth through

our national divisional structure, selecting the right land and

managing the planning process.

A summary of our performance against this strategic priority,

along with our plans for further progress, is detailed below.

How we performed in 2022/23

• This year saw our approach to land acquisition become more

selective, given the depth of the Group’s landbank and the

current economic backdrop. Investment continues to be

focused on securing land interests which offer compelling

and enhanced financial returns and, where possible,

havesignificant flexibility in the contract terms.

• Throughout the year the Group contracted to purchase

4,715 plots.

• Bellway has performed well throughout the financial year,

benefitting from the Group’s programme of accelerating

theconstruction of social homes.

• Volume output of 10,945 homes and housing revenue has

reached close to record levels.

• Sales demand was weakened across the country with

a28.4% decrease in the overall reservation rate.

Our plans for 2023/24

• We will continue to selectively invest in strategic land,

asit allows us to secure and control land with less capital

investment and provides more flexibility.

• We will maintain our current disciplined long-term growth

strategy. Whilst being mindful of market conditions,

thelong-term market fundamentals remain positive and

Bellway will continue to play a role in meeting the need

fornew homes in the years ahead.

2. Value creation for shareholders

Overview

The Group continues to focus on long-term value generation

for shareholders through increasing net asset value per share

(‘NAV’) and the payment of regular dividends. This is a crucial

part of our long-term value creation strategy.

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 2022/23

• We have carried out a major update to the Artisan

Collection standard house type portfolio to comply with

The Future Homes Standard 2021, in advance of the

2025 deadline.

• We have made further design improvements and

modifications to the Artisan standard house types including

standardisation, procurement efficiencies and optimisation

of site layouts.

• We have continued to benchmark Artisan build costs

across all divisions to drive cost efficiencies.

• We have continued with our detailed programme of value

engineering reviews across our sites and divisions.

• Planning permission for existing sites now include

innovative developments to achieve the Future Homes

Standard, high quality and Biodiversity Net Gain targets.

• Our research project at the University of Salford, ‘Energy

House 2.0’ has begun trialling new innovative products,

aspart of our commitment to the Future Homes Standard,

net zero and carbon reduction.

Our plans for 2023/24

• We will continue to design and develop our standard house

types in the Artisan Collection in line with Building Regulations.

• We will continue to monitor Building Regulation updates

from the Government and make modifications to designs

tobe fully compliant with the regulations.

• We will continue to benchmark Artisan build costs across

alldivisions and perform monthly cost reviews.

1. Long-term

volume growth

2. Value creation

forshareholders

3. Better with Bellway

Our Strategy

Strategic Report

16 Bellway p.l.c. Annual Report and Accounts 2023

• As our subcontractors become more familiar with the Artisan

Collection, we will drive opportunities to improve build speed.

• We will continue 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 supported with the tools

todrive efficiencies.

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, dividend payments and the

share buyback programme.

A summary of our performance against this strategic priority,

along with our plans for further progress, is detailed below.

How we performed in 2022/23

• Launch of a £100m share buyback programme.

• Strategic investment of capital into land and work-in-

progress in areas with high demand, without compromising

the RoCE and margin requirements, to ensure that the

Group is well placed to deliver growth in the long-term.

• Paid dividends of £171.7 million.

• Increased NAV by 5.3% to 2,871p

, with the increase

achieved due to strong growth in the underlying earnings

and not withstanding a £49.6 million charge in the year in

relation to legacy building safety issues.

Our plans for 2023/24

• Continue with the planned share buyback programme.

• 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 2022/23 dividend is approved, the total dividend will

be covered by underlying earnings by 2.3 times

Focus on capital employed

Ensuring that our assets are used in the most efficient way

todeliver shareholder returns.

How we performed in 2022/23

• 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 2023/24

• 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 2022/23

• We have maintained our current banking relationships.

• We have maintained our sterling US Private Placement for

a total amount of £130 million with maturity dates in 2028

and 2031.

• We have continued to enhance our current investor

relations activities through the support of our Group

Investor Relations Director.

Our plans for 2023/24

• We will maintain our current banking and US Private

Placement relationships.

• We will continue to develop our current investor

relations activities with the support of our Group Investor

Relations Director.

3. Better with Bellway

Overview

Better with Bellway which was launched in March 2022,

encompasses our ethos of operating in a responsible and

sustainable way.

Better with Bellway has eight strategic business priorities that

are designed to help Bellway thrive. They put our long-term

commitment to responsible and sustainable practice at the

core of our operational strategy.

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’.

Putting people first means prioritising our customers and our

communities, by building high-quality homes. and striving

to become an Employer of Choice by focusing on how we

can upskill our workforce and nurture a culture of diversity

and inclusion.

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 each strategic business

priority, along with our plans for the future, are detailed on

pages 38 to 62.

Strategic Report

17Bellway p.l.c. Annual Report and Accounts 2023

The following timeline demonstrates how we create value, through each stage of our business model,

from carefully selecting the right land and navigating the planning process, safely constructing high

standard attractive homes, to selling homes and providing an excellent customer experience.

Building value at every stage

What we do

• We construct a wide range of homes, varying between two

to five bedrooms, 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 designs

which have been developed to adhere to differing regional

planning requirements. These standard house types drive

efficiencies during construction.

• We currently have 76 Artisan standard house types which

are utilised by all divisions.

• 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.

• The health, safety and wellbeing of our employees,

subcontractors and visitors to our developments is

ourhighest priority.

• 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 inefficiencies.

What we do

• Land opportunities are identified by our experienced

divisional and Group land and planning teams using their

local knowledge and contacts. A viability assessment

and appraisal is prepared, 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. Depending upon the value and nature

of the proposed acquisition, full Board approval may also

be required.

• We are highly selective to ensure we secure the right land

which offers compelling and enhanced financial returns in

line with our strategy and maintain a strong landbank.

• 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.

• As part of our sustainable and responsible business

approach, our land teams assess biodiversity constraints

and opportunities at the earliest stage in site selection,

supported by our Group Head of Biodiversity.

• 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 to ensure a steady supply

of sites.

Select the right land

and manage the planning process

Read more on page 23.

Strategic Report

19Bellway p.l.c. Annual Report and Accounts 2023

Select the right

land and manage

the planning process

Select the right land

Our experienced divisional and Group land and planning

teams identify land opportunities by using their local

knowledge and contacts. A viability assessment and appraisal

is prepared by our strategic or divisional land team, 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.

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.

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 are highly selective to ensure we secure the right land

which offers compelling and enhanced financial returns inline

with our strategy, and to maintain a strong landbank.

Our land bank is comprised 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.

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.

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.

Our Business Model continued

Gross margin (%)

(2)

19.0%

+650bps

19.0

12.5

19.2

2021 2022 2023

Sufficient landbank plots with DPP

chieved

AchievedAchievedAchieved

2021 2022 2023

Underlying gross margin (%)

(2)(3)

20.2%

(210bps)

20.2

22.3

20.9

2021 2022 2023

Alignment with Better with Bellway

Biodiversity

See pages 58 and 59.

By building a significant number of quality homes on

brownfield land we are contributing to the regeneration of

areas in mainly urban locations. Wherever possible mature

trees and woodlands located within our developments are

retained, these trees are then protected during development.

We have established Biodiversity Net Gain protocols for site

acquisitions and management, and 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.

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.

Strategic Report

20 Bellway p.l.c. Annual Report and Accounts 2023

Manage the planning process

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.

New legislation which comes into effect in January 2024,

requires all new planning applications to have at least a 10%

Biodiversity Net Gain, which requires housebuilders to leave

the biodiversity of land used for development in a measurably

better state compared to the baseline prior to development.

The risks

• Delays, increasing complexity and cost in the planning

process. There has been no change in this risk during

the year.

• Delay or failure to obtain planning permission if any

application is not 10% Biodiversity Net Gain (‘BNG’)

compliant, fromJanuary 2024. This risk is not regarded

as a principal risk and so have not been included in our

principal risk table on pages 79 to 83.

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.

Alignment with Better with Bellway

Biodiversity

See pages 58 and 59.

New legislation requires 10% Biodiversity Net Gain on all new

planning applications submitted from January 2024. We are

committed to ensure that all planning applications submitted

from July 2023 onwards are 10% BNG compliant.

Customers and Communities

See pages 43 and 44.

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.

How we measure our performance

These KPIs enable us to monitor the number of plots in each

tier of our land bank to ensure they remain sufficient to help

us deliver our strategy of volume growth. At the end of the

year, we had an appropriate number of plots in each land

bank tier to meet our strategy.

Number of plots in owned and

controlled land bank with DPP (plots)

32,229 plots

(0.4%)

32,229

32,344

30,933

2021 2022 2023

Number of plots in ‘pipeline’ (plots)

21,400 plots

(25.7%)

21,400

28,800

24,300

2021 2022 2023

Number of plots in strategic land bank

– positive planning status (plots)

9,000 plots

(4.3%)

9,000

9,400

8,700

2021 2022 2023

Number of plots in strategic land bank

– longer-term interests (plots)

34,600 plots

+32.1%

34,600

26,200

21,700

2021 2022 2023

Number of plots acquired

with DPP (plots)

466 plots

(65.4%)

466

1,345

1,844

2021 2022 2023

Number of plots converted from

medium term ‘pipeline’ (plots)

10,347 plots

(8.9%)

10,347

11,352

10,938

2021 2022 2023

Strategic Report

21Bellway p.l.c. Annual Report and Accounts 2023

Our Business Model continued

Slips, trips and falls (incidents)

113 incidents

+44.9%

113

129

2021 2022 2023

Number of NHBC Pride in the

Job Awards (awards)

34 awards

(5.6%)

2021 2022 2023

Number of RIDDOR seven-day

reportable incidents per 100,000

site operatives (incidents)

221.5 incidents

(7.9%)

221.15

240.08

119.05

2021 2022 2023

Design desirable

homes and construct

them safely

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, with a focus on our Artisan collection of

standard house types, to suit a variety of customer budgets

and lifestyles.

The health, safety and wellbeing of our employees,

subcontractors and visitors to our developments,

isourkey priority.

We continue to evaluate our working methodologies

to ensure they are robust, compliant, and create a safe

working environment.

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 inefficiencies.

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

The key to enabling us to deliver homes built to the right

standard, at the right time and at the right price, are the

experienced construction people, strong relationships

we have with our skilled subcontractors and consultants,

togetherwith Group purchasing arrangements with suppliers

and manufacturers.

Alignment with Better with Bellway

Building Quality Homes, Safely

See pages 53 and 54.

The health and safety of everyone who works on and visits

any of our locations is paramount, and we continue to review

our procedures for best practice.

Carbon Reduction

See pages 49 to 52.

We have built several low carbon exemplar homes on a trial

basis to help 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

See page 57.

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

See pages 55 and 56.

We continue to work with our subcontractors, consultants,

and suppliers and manufacturers of materials to maintain our

strong long-term relationships, which 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. We continue to improve reporting

procedures which is measured via Reporting of Injuries,

Diseases and Dangerous Occurrences Regulations (‘RIDDOR’)

rate. The Group is committed to continuing to improve health

and safety standards.

Strategic Report

22 Bellway p.l.c. Annual Report and Accounts 2023

Number of homes sold (homes)

10,945

homes

(2.3%)

10,945

11,198

10,138

2021 2022 2023

Order book value at 31 July (£m)

(2)

£1,193.5m

(43.6%)

1,193.5

2,114.3

2,022.3

2021 2022 2023

Reservation rate (homes per week)

156 homes

per week

(28.4%)

156

218

204

2021 2022 2023

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?’ in the 9-month survey, which is the driver for the

5-star

homebuilder status, and theoverall satisfaction score,

whichcaptures feedback on a range of categories including

Quality, Service After and Standard of finish.

Bellway were awarded 5-star

homebuilder status in

March2023 for the period ended 30 September 2022.

The final ‘Recommend a Friend’ score was 91.4% against

a target of 90%, a slight reduction of 0.9% from the

previous year.

NHBC overall score (%)

85.3%

(1.6ppt)

85.3

86.9

86.6

2021 2022 2023

NHBC 9-month would you recommend

Bellway to a friend satisfaction score (%)

80.6%

(150bps)

80.6

82.1

79.9

2021 2022 2023

Selling homes and

delivering an excellent

customer experience

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. Our Customer First programme

supports all Bellway employees and subcontractors to deliver

to these high standards of customer service.

Our retention of the HBF 5-star

homebuilder status for the

seventh consecutive year demonstrates our commitment

toproviding the highest level of service to our customers.

We have dedicated customer care teams within each division

delivering high levels of customer service and these are

supported by our Group Customer Care Director.

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.

We have also created a subcontractor portal to better manage

any post-completion issues reported by our customers.

The risks

• Failure to be responsive to customer requests

and feedback.

• The risk to Bellway’s reputation if customer service

is inadequate.

• These risks are not regarded as principal risks and so have

not been included in our principal risk table on pages 79

to 83.

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

See pages 43 to 44.

Customer handover packs contain information on sustainable

travel, local recycling centres and energy efficiency advice.

We continued to develop our 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.

Carbon Reduction

See pages 49 to 52.

We continue to improve energy efficiency by building homes

that are, on average, more energy-efficient than is required by

building regulations.

Strategic Report

23Bellway p.l.c. Annual Report and Accounts 2023

Our Marketplace

The housing market has experienced a challenging trading environment but good quality,

affordablypriced housing remains in short supply across many parts of the country and in recent

yearsthis has been exacerbated by changing regulations in the planning system.

Underlying demand for high quality homes remains supported by wage growth and low levels of unemployment throughout

the year. Notwithstanding this market requirement for new homes, trading conditions were challenging, with cost-of-living

pressures and both higher and more volatile mortgage interest rates leading to significant variations in reservation rates.

Demand factors

The UK economy

The UK economy grew by 0.2% in the quarter to July

2023 when compared to the previous three months.

While unemployment remains low by historical standards

at only 4.3%, the near-term economic growth outlook

remains relatively muted, partly due to the impact of ongoing

inflationary pressures. The Consumer Prices Index (‘CPI’) rose

by 6.7% in the year to August 2023 and the Bank of England’s

interest rate decisions are aimed at lowering CPI inflation

back to its 2% target over the medium term. During the last

year, the Bank of England base rate has risen from 1.25% at

1 August 2022 to 5.00% at 31 July 2023, its highest level since

early 2008.

The affordability of mortgages

The Bank of England’s interest rate decisions have a

direct impact on mortgage affordability, which is a crucial

ingredient for a healthy and sustainable housing market.

While affordability has been helped, in part, by ongoing wage

rises, this has been more than offset by the effect of rising

mortgage interest rates.

Consequently, while average mortgage payments as a

percentage of take-home pay are currently within historical

norms, they remain elevated compared to the levels over

the last decade and we expect this to continue to weigh

onhousing demand in the near-term.

The availability of mortgages

In general, there remains good availability of mortgage

products, although lenders’ re-pricing activity in response

to changes in the bank rate has affected the shorter-term

availability of mortgage finance at certain points during the year.

The recent expiry of Help-to-Buy in England has led to

lower year-on-year demand from first time buyers, and there

remains a relative lack of affordably priced higher loan-to-

value mortgage products.

Affordability of houses in the UK

House prices

The latest figures from the UK Land Registry’s House Price

Index showed that the average UK house price in July 2023

was broadly flat on the prior year at £290,000 and down by

around 1% from the recent peak in late 2022.

While nominal house prices have shown resilience, the effects

of recent inflation have led to a decline in real house prices,

and combined with ongoing wage rises, this has helped offset

some affordability pressures. Notwithstanding this, the effect

of interest rate rises has had the most significant impact on

affordability during the year. As Government policy and Bank

of England interest rate decisions aim to bring inflation under

further control in the months ahead, this will be critical for

longer-term affordability and the health of the housing market.

The stamp duty land tax holiday

On the 23 September 2022, to help lower the upfront costs

ofmoving home, the Government announced increases

inthe residential nil-rate stamp duty tax thresholds.

For first time buyers, the threshold was increased from £300,000

to £425,000. For non-first time buyers, the threshold was

increased from £125,000 to £250,000. These measures are due

to be in place until 31 March 2025, after which the thresholds are

currently expected to be reduced to their previous levels.

Demand

There remains a fundamental housing shortage in the UK

anddespite the recent challenging trading conditions,

underlying demand for our high-quality homes has

been partly supported by wage growth and low levels

of unemployment.

Mortgage costs as a proportion of disposable income

1995 1998

2001 2004 2007 2010 2013 2016 2019 2022

Mortgage as a % of disposable income

Source: ONS and Bank of England

Mortgage Rate (%)

Five year 75% LTV mortgage rate (%) (LHS) Nationwide home (RHS)

10%

20%

30%

40%

50%

60%

Strategic Report

24 Bellway p.l.c. Annual Report and Accounts 2023

During the year we have continued to see relatively healthy

levels of underlying demand from second-time buyers.

However, the impact of rising interest rates has been particularly

acute for customers requiring a higher loan-to- value mortgage,

and exacerbated by the expiry of Help- to-Buy in England in

March 2023. Sales to investors have remained low.

Supply factors

Land supply and planning permissions

Bellway has a strong and high-quality land bank which

has enabled our land teams to remain highly selective in

the current economic environment, without hindering the

Group’s long-term growth ambitions.

Overall the planning system remains challenging and has

been exacerbated by changing regulations around water

and nutrient neutrality, and biodiversity. This is evidenced

in the chart below, which shows the number of planning

permissions granted in England, Scotland and Wales

decreased from 15,565 last year to 14,101 in the current year.

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.

Bellway’s experienced land teams continue to engage with

vendors and assess sites with compelling returns although,

given the uncertain trading backdrop, we currently expect to

contract a lower number of plots than our volume output in

financial year 2024.

The planning system

The Group’s ability to deliver new homes is dependent

on the efficiency of the planning system. To help deliver

against Bellway’s strategic priority of long-term volume

growth, a properly functioning planning system is required

to grant planning consents in a timely and effective manner.

The system remains slow, still constrained by staffing and

resource shortages at local authorities and exacerbated

by the uncertainty caused by the proposed reforms to the

Government’s National Planning Policy Framework. Overall,

this continues to have a dampening effect on outlet openings

across the wider sector.

The Government announcement in December 2022 that

local housing targets were to be ‘advisory’ rather than

‘mandatory’, coupled with the end of the obligation on local

authorities to maintain a rolling five-year land supply where

they have a local plan in place, has further contributed to a fall

in planning consents granted.

Availability and affordability of labour

andmaterials

During the year, average overall build cost inflation was in the

range of 9% to 10%, with the increase driven by both labour

and materials. The upward pressure on costs reflected both

underlying wage inflation and the pass through of previously

elevated energy prices.

Bellway has well-established relationships with its supply

chain and subcontract partners and together with our

strong commercial disciplines and controlled approach to

production expenditure, some of the underlying build cost

pressures have been alleviated.

Since early 2023, build cost inflation has moderated as the

industry-wide reduction in reservation rates and order books

has impacted demand for construction materials. As the year

progressed, this resulted in an improving trend of product

availability across the Group.

As weaker industry sales rates continue to feed through to

lower levels of construction activity, the Group expects overall

build cost pressures to ease further in the months ahead.

Summary of market backdrop

There is currently economic uncertainty due to cost-

of-living pressures and housing affordability constraints.

Notwithstanding this, the long-term market fundamentals for

Bellway remain positive with the ongoing imbalance between

supply and demand for affordably priced, high-quality homes

continuing to be a feature across many parts of the country.

Planning projects

approved (GB)

14,101

(9.4%)

2020 20212018 2019 2022

15,833

15,565

23,101

19,677

14,101

Source: HBF New Housing Pipeline Report (Q1 2023 – Published July 2023)

Planning units

approved (GB)

326,000

(11.2%)

330,000

367

,000

353,000

382

,000

326,000

urce: HBF New Housing Pipeline Report (Q1 2023 – Published July 2023)

2020 20212018 2019 2022

Strategic Report

25Bellway p.l.c. Annual Report and Accounts 2023

The Future Home, part of the Energy House

2.0 project, in partnership with the University

ofSalford, trials the latest green technologies.

The first of its kind for Bellway, the Future Home

will be retrofitted throughout the project, offeringa

unique opportunity to measure the energy

efficiency of individual features, even under

extreme weather conditions. Many of these

technologies are due to be in common use by

2025, so testing them now will allow us to reduce

carbon emissions by building more efficient

homes even earlier.

PV Invertor and battery in loft space

Infrared panel (ceiling mounted)

Timber frame construction

Infrared panel (wall mounted)

Decentralised Mechanical

extract ventilation

Hydrotop – Air Source

Heat Pump

Mechanical Ventilation

Heat Recovery system

and associated ductwork

Aquarea –

Air source

heat pump

Ductwork

installed for future

cylinder trials

Convection

radiators

Cylinder with

incorporated

buffer

Underfloor

heating

Precast

insulated

concrete

planks

Wastewater

Heat Recovery

system

Designing for

a better future

Our Marketplace continued

Strategic Report

26 Bellway p.l.c. Annual Report and Accounts 2023

Area Benefits Issues to overcome

Construction

methods

The off-site construction of modular homes are

constructed as much as possible in an off-site factory

location, where a skilled workforce is permanently

based, and quality can be controlled much more

easily. The finished components are then shipped

tothe final build site for installation and assembly.

We are trialling suspended pre-cast insulated floor

plank systems, which is used as an alternative to beam

and block flooring. Units are manufactured off-site and

are modern methods of construction. On arrival to

site, they are lifted into place, helping to speed up

theprocess and reduce site labour.

• Customer acceptance

• Supply constraints

• Real world insulation compared

to computer modelling

Further information

Sustainable Supply

Chain pages 55 and 56.

Scope 3 emissions

page51.

Energy

sources

Alternative energy sources within our homes are key

to driving down scope 3 emissions.

Air source heat pumps are low-energy systems based

on air to water technology. They can be located in

the roof space or outside a home. The pumps extract

heat from the ambient outside air, which is then

converted to provide heat and a constant supply

ofhot water.

We are trialling two wastewater heat recovery

systems with the Energy House 2.0. These systems

are designed to retrieve thermal energy from waste

hot water to increase the efficiency of the domestic

heating system.

• Supply constraints

• Cost constraints

Further information

Carbon Reduction

pages49 to 52.

Scope 3 emissions

page51.

Energy

conservation

Smart zoning thermostats which can control the

temperature of the home on a room-by-room basis.

Smart zoning allows the user to heat the area that

they are using exclusively. It allows them to monitor

and control temperatures within the household,

therefore saving energy.

Infrared panels are both ceiling and wall mounted

within the home. They are designed to heat the

people and objects within the household, rather than

solely heating the air, reducing the need for traditional

heating methods.

• Supply constraints

• Cost constraints

Further information

Carbon Reduction

pages49 to 52.

Scope 3 emissions

page51.

Materials

We continue to expand our use of timber frame

construction methods. Not only does timber frame

bring embodied carbon benefits, but it also reduces

reliance on brick and block construction methods,

with a result of saving materials.

Triple glazed windows lead to a warmer home due

to less heat loss and have the benefit of added

noise reduction.

• Skilled labour constraints

• Supply constraints

Further information

Sustainable Supply

Chain pages 55 and 56.

Scope 3 emissions

page51.

Strategic Report

27Bellway p.l.c. Annual Report and Accounts 2023

Bellway has delivered a resilient performance, during

a year which was disrupted by periods of challenging

tradingconditions.”

John Tutte

Chair

Chair’s Statement

Navigating the

currentheadwinds

Introduction

Bellway has delivered a resilient performance, during a

year which was disrupted by periods of challenging trading

conditions. Our strong order book at the start of the financial

year was decisive in allowing us to weather a period of

uncertainty and supported the delivery of 10,945 much

needed new homes – very close to the prior year’s record

output. Notwithstanding this, the industry has faced several

headwinds, which combined with higher levels of taxation,

led to a reduction in the Group’s underlying earnings per

share to 328.1p

2,3

(2022 – 420.8p).

The performance in the year was achieved whilst

maintaining a focus on quality and customer service and

reflects the dedication and hard work of our colleagues,

subcontractors and supply chain partners. 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

Our immediate priority is to ensure the Group remains

well-positioned for a prompt return to sustainable growth

as the wider economy recovers and clarity emerges over

future housing policy. All political parties recognise there

is a growing shortfall of good quality homes but remain

divided as to how this can be best addressed. The situation

is exacerbated by a challenging planning system which

would benefit from reform and a longer-term approach to

addressing housing need.

As previously announced, due to the uncertain market

backdrop, we recently reorganised our operational structure

which resulted in some headcount reductions across the

Group. These measures were carefully considered to protect

the health of the business, and they will not hinder the

Group’s long-term growth ambitions.

Bellway’s robust balance sheet provides the financial flexibility

to successfully navigate the near-term market challenges,

and the capacity to invest in the future to deliver long-term

volume growth. To drive a long-term improvement in RoCE,

the Board has a sharp focus on margin discipline and will

maintain a value-driven approach to capital allocation.

Together with our responsible approach to business practices,

the delivery against these priorities will help support ongoing

value creation for shareholders. Further details of our strategic

priorities are set out below:

1. Deliver long-term volume growth;

2. Drive a long-term improvement in

RoCE,and;

3. Operate responsibly and sustainably

through our ‘Betterwith Bellway’ strategy.

1. Long-term volume growth

Bellway’s successful organic growth strategy has supported

the delivery of a near-doubling of volume output over the

last decade. While we expect a decrease in legal completions

in financial year 2024, beyond the near-term, the Board is

confident that the strength of our land bank and balance

sheet can help build on our long-term track record. Our front-

footed approach to land investment in recent years has

provided good visibility on the Group’s sales outlet opening

programme and, further supported by our healthy work-in-

progress position, we are focused on driving a recovery in

volume output beyond the current financial year.

The long-term housing market fundamentals remain positive

and there is a shortage of high-quality, energy efficient

and affordable homes across many parts of the country.

Bellway has a strong operational structure, now with 20

trading divisions, which provide the capacity to organically

grow volume in the longer-term to over 13,000 homes per

annum. The Group has the ability to scale up this structure

when market conditions allow, and this will ensure that

Bellway continues to play an important role in increasing

housing supply in the years ahead.

2. Long-term improvement in RoCE

A core part of the Group’s strategy is to maintain a sharp

focus on RoCE, which is a key indicator of operating efficiency

and performance. Bellway’s RoCE is currently being affected

by several industry headwinds, including higher mortgage

interest rates, cost inflation and planning delays. In the

year ahead, these factors will lead to a further reduction

Strategic Report

28 Bellway p.l.c. Annual Report and Accounts 2023

in underlying RoCE from the 15.8%

2,3

reported in financial

year 2023 (2022 – 19.4%). Notwithstanding these near-term

challenges, the Board is optimistic that the backdrop of our

cyclical industry will improve and combined with our strategic

focus on growth and operating margin, the Group is well-

placed to again deliver an underlying RoCE of between 15%

2,3

and 20%

2,3

over the longer term.

To help achieve this, and in addition to our ongoing focus

on margin protection, the expansion of our strategic land

bank will support both our long-term volume growth

aspirations and an improvement in asset turn. Strategic land

can also generate margin enhancement, in some instances,

due to land values typically being agreed at a discount to

open market cost, once planning permission has been

obtained. In addition, we are increasing the use of timber

frame construction across the Group, which can improve

build efficiencies and asset turn, as well as reducing carbon

emissions in the supply chain.

The Group is determined to drive benefits from these areas

offocus and together with our value-driven approach to capital

allocation, we have a strong platform to begin to deliver a

recovery in returns beyond the current financial year.

3. ‘Better with Bellway’

During the year we have made further progress, through

a range of initiatives, to embed the ‘Better with Bellway’

sustainability strategy across the Group’s operations.

The strategy includes ambitious targets in respect of our

three flagship areas of Carbon Reduction, Customers and

Communities, and becoming an Employer of Choice.

Supported by several research projects underway across

the business, strong headway has been made in laying

the foundations for a lower carbon footprint as we work

towards a significant reduction in the Group’s emissions by

2030. The Group’s scope 1 and scope 2 carbon emissions

have reduced by 10.0% compared to the prior year and by

35.6% since our base year of 2019, and we are in an excellent

position to meet our target of a 46% reduction by 2030.

Reflecting our focus on build quality and customer service,

we are proud to have retained our position as a five-star

homebuilder for the seventh consecutive year. There has also

been an excellent response to our most recent employee

engagement survey and despite challenging circumstances

and uncertainty in the market, 89% of colleagues (2022 – 95%)

said they would recommend Bellway as ‘a great place to work’.

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 remediation work being carried out through

our dedicated Building Safety division. Bellway also signed the

SRT with DLUHC on 13 March 2023, and has recently been

confirmed as a member of the RAS by DLUHC, which further

reinforce our approach to acting responsibly on matters

relating to building safety in legacy apartment schemes.

Delivering value creation for shareholders

The successful delivery against our strategic priorities will

ensure the Group continues to generate long-term value

for shareholders, and the Board believes this is best gauged

through increasing NAV per share and supplemented by

capital returns.

In the year ended 31 July 2023, NAV rose by 5.3% to 2,871p

(2022 – 2,727p) and in line with previous guidance, the Board is

pleased to recommend that the final dividend is maintained at

95.0p per share (2022 – 95.0p). This brings the total proposed

dividend to 140.0p per share (2022 – 140.0p) and, if approved,

the overall dividend will be covered 2.3 times

2,3

by underlying

earnings (2022 – 3.0 times). In the current financial year and in

line with Board’s previously stated target, underlying dividend

cover will be around 2.5 times

2,3

The Group has maintained its disciplined approach to capital

allocation and the £100 million share buyback programme

launched on 28 March 2023 is nearing completion with

3.8 million shares purchased at a cost of around £83 million

asat 1 October 2023.

Looking ahead, the strength of our land bank and

balance sheet provide the Group with optionality, and the

reinvestment of capital into compelling land opportunities

willcontinue to be balanced with future shareholder returns.

Competition and Markets Authority Market Study

The UK Competition and Markets Authority (‘CMA’) launched

a market study into the housebuilding sector in England,

Scotland and Wales on 28 February 2023. The CMA has

since announced on 25 August 2023 that it will be looking

into five areas of the study in greater detail, including barriers

to entry and expansion in the industry and if theplanning

system is impeding the effective functioning of the

housebuilding market.

Bellway has already contributed positively to the study,

byproviding information on how the industry operates through

the key stages of land acquisition, planning, construction and

sales. We will continue to engage openly with the CMA through

this process, which also provides an opportunity to help inform

the CMA of the current challenges facing the sector.

Future long-term success

Bellway has an experienced and proven leadership team with

operational strength-in-depth throughout the organisation.

Its dedicated team and loyal supply chain partners are well-

placed to adapt and successfully navigate through changing

market conditions. The strategic flexibility afforded by our

strong land bank and balance sheet also provides the Group

with ongoing resilience and a platform to capitalise on future

growth opportunities.

We remain committed to our responsible and sustainable

approach to business and, by building new communities

and delivering against the Group’s strategic priorities, I am

confident that Bellway will add further value and create a

positive outcome for our stakeholders over the long term.

John Tutte

Chair

16 October 2023

Strategic Report

29Bellway p.l.c. Annual Report and Accounts 2023

Bellway’s focus on traditional two-storey family housing attracts

a wide range of customers, with underlying demand for our

high-quality homes partly supported by wage growth and low

levels of unemployment throughout the year.”

Jason Honeyman

Group Chief Executive

Strong long-term

fundamentals

Chief Executive’s Market and Operational Review

Market

Bellway’s focus on traditional two-storey family housing

attracts a wide range of customers, with underlying demand

for our high-quality homes partly supported by wage

growth and low levels of unemployment throughout the

year. Notwithstanding the broader market requirement

for new homes, trading conditions were challenging, with

cost-of-living pressures and both higher and more volatile

mortgage interest rates leading to significant variations in

reservation rates.

A slower than usual start to the financial year was followed by

a period of challenging trading in the autumn of 2022, when

sales rates were impacted by sharp increases in borrowing

costs. By early 2023, mortgage interest rates began to

moderate, and we were encouraged by the levels of demand

during the spring selling season. By June and July, however,

there were further rises in borrowing costs for customers

and the resulting uncertainty and pressure on affordability

impacted customer confidence and reservation rates through

the summer.

The overall reservation rate was 28.4% lower than the prior

year at an average of 156 per week (2022 – 218) and, to help

mitigate weaker private demand, we continued with our

programme of accelerating the construction of social homes.

The average private weekly reservation rate reduced by

35.9% to 109 (2022 – 170), representing a private reservation

rate per site per week of 0.46 (2022 – 0.70). The overall

cancellation rate rose to an average of 18% (2022 – 13%),

withthe increase largely driven by softer private customer

demand in the autumn and summer, when mortgage

interestrates were at their highest levels.

The Group operated from an average of 238 outlets (2022

– 242) with a closing position of 240 outlets (2022 – 235),

broadly in line with our expectations. Outlet growth during

the year has been achieved because of our front-footed

approach to investment prior to financial year 2023, and

has been secured notwithstanding a challenging planning

environment, which is fraught with delays.

In general, there remains good availability of mortgage

products, although lenders’ re-pricing activity in response to

changes in the Bank of England base rate has affected the

shorter-term availability of mortgage finance at certain points

during the year. Affordability has been impacted by the increase

in mortgage interest rates, which more than offset the effect

of wage increases. Consequently, while average mortgage

payments as a percentage of take-home pay are currently

within historical norms, they remain elevated compared to the

levels over the last decade and we expectthis to continue to

weigh on reservation rates in the near-term.

During the year we have continued to see relatively

healthy levels of underlying demand from second-time

buyers, whichaccounted for 63.8% of private reservations

(2022–59.4%). The impact of rising interest rates, however,

has been particularly acute for customers requiring a higher

loan-to-value mortgage, and for first-time buyers this has

been exacerbated by the expiry of Help-to-Buy in England

in March 2023. Sales to investors have remained low and

represented around 1% of total reservations (2022 – 1%).

In the year ahead, to support construction programmes and

operational efficiency, the Group will continue to consider

investor sales on a disciplined basis, particularly at larger sites

and slower selling outlets.

Overall headline pricing remained robust across our

regions, although the rise in customer borrowing costs in

the year has required our sales teams to increase the use

oftargeted incentives on certain sites to secure reservations.

The use of selling incentives generally increased through

the summer of 2023 and in order to encourage further

sales, we expect this trend to continue in the current financial

year. Customer demand was generally more resilient where

affordability remains good in the context of the local market and

in areas with healthy employment levels. These factors, together

with our land investment in recent years, haveparticularly

benefitted our divisions in Manchester, the East Midlands

and Northern Homes Counties, which were notable

strong performers.

Strategic Report

30 Bellway p.l.c. Annual Report and Accounts 2023

Strong land bank provides near-term flexibility

and a platform for long-term volume growth

Bellway has a strong and high-quality land bank which

has enabled our land teams to remain highly selective in

the current economic environment, without hindering the

Group’s long-term growth ambitions. The land bank has been

enhanced in recent years by the proactive investment in new

sites from the summer of 2020, when overall activity in the

land market was depressed following the onset of COVID-19.

Given the cyclical nature of the housebuilding industry,

maintaining Bellway’s financial strength forms the foundation

of our capital allocation policy, and enables the Group to

swiftly respond to attractive land opportunities when they

arise. Ongoing disciplined investment in land will be essential

to achieving our strategic priority of long-term volume

growth, and our value-driven approach to capital allocation

isregularly reviewed by the Board to ensure an optimal

balance between land investment and capital returns.

Our cautious and targeted approach to investment and

rigorous approval process remains focused on securing land

interests which offer compelling and enhanced financial

returns and where possible, have significant flexibility in

the contract terms. There is a well-established Group-wide

oversight for land approval at Bellway which ensures we

focus our investment resource in the areas of strongest

demand. As part of this disciplined process, all contracted

sites are assessed by our divisional teams and again by the

Group’s Head Office land acquisition team, which in order to

optimise the margin, challenges acquisition assumptions and

reviews layouts and engineering designs.

Bellway’s experienced land teams continue to engage

with vendors although, as previously guided, overall plots

contracted have been significantly lower than the prior two

financial years. During the year, the Group contracted to

purchase 4,715 plots

(2022 – 19,089 plots) across 35 sites

(2022 – 107 sites) with a total contract value of £378.2 million

(2022 – £1,300.3 million). We have also continued to review

previously contracted land and decided not to proceed with

the purchase of 886 plots across 4 previously approved sites.

The table below analyses the Group’s land holdings:

2023 2022

DPP: plots with implementable detailed

planning permission 32,229 32,344

Pipeline: plots pending an

implementableDPP 21,400 28,800

Bellway owned and controlled plots

53,629 61,144

Bellway share of land owned and controlled

by joint ventures 935 962

Total owned and controlled plots 54,564 62,106

Strategic land holdings 43,600 35,600

Total land bank

98,164 97,706

Since the early stages of the COVID-19 pandemic, the planning

system has been impacted by staffing and resource shortages

at local authorities and exacerbated by the uncertainty

caused by the proposed reforms to the Government’s

National Planning Policy Framework. In addition to these

delays, the sector has been tasked with accommodating the

increasing regulations around water and nutrient neutrality,

and biodiversity. Bellway’s Head of Biodiversity is leading on

this area and working with our land teams to help the Group

navigate the associated complexities.

As noted earlier, the Group operated from an average of

238 outlets in the year (2022 – 242) with 240 active outlets at

31 July 2023 (2022 – 235). Reflecting the robust volume output

and lower level of land buying during the year, Bellway’s

owned and controlled land bank has decreased yet remains

strong at 53,629 plots (2022 – 61,144 plots). This represents a

land bank length of 4.9 years (2022 – 5.5 years) when based

on the last 12 months’ legal completions.

Within our land bank we have 32,229 plots (2022 – 32,344

plots) with an implementable detailed planning permission

(‘DPP’) and our pipeline land bank comprises 21,400 plots

(2022 – 28,800 plots). The reduction in the number of pipeline

plots reflects our lower land activity and several pipeline sites

receiving an implementable DPP in the year. As the Group’s

pipeline plots achieve planning permission, they will provide

further support for our plans to grow outlet numbers in the

years ahead.

We have good visibility on the expected timing of near-term

planning decisions and, notwithstanding the risks of further

planning delays in the run up to next year’s General Election,

we currently expect to open up to 80 new outlets (2023 – 70)

in financial year 2024. Overall, the Group is well-positioned to

increase the average number of outlets by around 3% during

the year to 31 July 2024, with the outcome also dependent on

sales rates and therefore the number of outlets closing during

the year.

The proactive and disciplined land investment in recent years

positions us well to help offset planning headwinds and begin

to reverse the reduction in outlet numbers that has affected

the wider industry. This will help mitigate the effects of a

slower sales market and we are targeting a further increase in

outlet numbers by the end of financial year 2025 and beyond.

A street scene from our Parson Croft development in Hull.

Strategic Report

31Bellway p.l.c. Annual Report and Accounts 2023

Overall, the depth of our land bank will allow the Group to

continue with a highly selective approach to land buying in the

year ahead. We will remain cautiously active by assessing sites

with compelling returns, however, given the uncertain market

backdrop we currently expect to contract a limited number of

plots in financial year 2024. We will maintain financial discipline

and as we demonstrated in summer 2020, our balance sheet

strength also provides the Group with the flexibility to respond

to changes in the market, increase investment and capitalise

ongrowth opportunities when they arise.

Strategic land investment to further support our

long-term growth ambitions

There has been further growth in our strategic land bank

during the year, which has enhanced our overall land supply

for a relatively low initial capital outlay. Bellway’s longer-term

land opportunities are primarily sourced through option

agreements by the Group’s dedicated strategic land function,

with commercial terms that will reflect future market values

and conditions, while also allowing for prevailing planning

policy requirements at the time of acquisition.

The Group’s experienced strategic land team is focused on

promoting and delivering sustainable sites through the planning

system, and is adept at navigating emerging planning policies

and other legislative changes. To complement our team of

land specialists, Bellway also has an ongoing programme of

structured graduate training which will ensure the continued

success of the function.

Our land sourcing was enhanced in October 2022 when the

Group completed the acquisition of a strategic land company,

focused on the South East and Midlands regions. The total

consideration was £25.4 million and as part of the transaction,

Bellway acquired promotion agreements in relation to around

6,000 potential plots. During the year and including the

benefit of this acquisition, the Group entered into option and

promotion agreements to buy 71 sites (2022 – 46 sites). As at

31 July 2023 the strategic land bank comprised 43,600 plots

(2022 – 35,600 plots) and has grown by around 60% over the

last three years (31 July 2020 – 27,300 plots).

Overall, the Group’s ongoing investment in strategic

land continues to provide balance sheet efficiency and

financial flexibility through the use of option and promotion

agreements, while also supporting our longer-term growth

prospects, with plots usually expected to obtain planning

permission over a period of five years or more.

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 83.8% of legal completions (2022 – 83.7%).

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 RoCE, while also acting as a mitigant to slower

market conditions. Reflecting this approach, Ashberry

represented a growing proportion of our active selling

sites during 2023 and was used in 11.2% of completions

(2022–8.6%).

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 Group has

intentionally reduced its London exposure in recent years due

to relative affordability constraints, and the brand contributed

5.0% of completions (2022 – 7.7%), the large majority of which

were apartments. Our strategy in London remains focused

on the more affordable outer transport zones and, primarily

due to changes in mix, the total average selling price of

our Bellway London completions reduced to £347,669

(2022–£389,684), an affordable level in the context of the

Capital’s residential market.

Production and cost control

During the year, average overall build cost inflation was in

the range of 9% to 10%, with the increase driven by both

labour and materials. We experienced upward pressure on

subcontract labour costs, reflecting both underlying wage

inflation and the elevated level of construction activity

required to deliver our robust volume output. Overall materials

inflation was also driven by building materials manufacturers’

own labour cost pressures together with the pass through of

previously elevated energy prices. In the second half of the

financial year, the combined effect of the fall in energy costs

from their peak in summer 2022 and lower industry order

books led to a slight moderation in cost rises.

Bellway has well-established relationships with its supply

chain and subcontract partners and together with our

strong commercial disciplines and controlled approach to

production expenditure, some of the underlying build cost

pressures have been alleviated. The Group’s programme

of accelerating the construction of social homes has also

provided good visibility on pipeline work and remained

beneficial when negotiating new labour and materials pricing.

The increased use of our Artisan Collection house-types has

delivered a range of benefits across the Group, including

improved site layouts, national procurement deals and our

subcontractors becoming more familiar with the range. To drive

further efficiency, and reflecting several value-engineering

initiatives, we have rationalised the Artisan range since its

launch in 2018 and the house-types have been plotted

across a total of 49,000 plots (2022 – 43,000 plots) on 355

developments (2022–295 developments). As a result of this

approach, the proportion of Artisan homes within Group

completions rose to 45% of total completions in financial

year 2023 (2022 – 26%) and we expect further growth in the

current year. As part of our strategy, we are also increasing

the use of timber-frame construction across the Group, further

details of which are covered in the ‘Better with Bellway’

section of this report.

The industry-wide reduction in reservation rates and order

books has impacted demand for construction materials and

as the year progressed, this resulted in an improving trend of

product availability across the Group. Bellway’s experienced

procurement teams continue to work closely with our

wide range of supply chain partners, and where necessary,

wehave sourced alternative products whilst maintaining the

high standard of our homes.

Chief Executive’s Market and Operational Review continued

Strategic Report

32 Bellway p.l.c. Annual Report and Accounts 2023

Since early 2023, build cost inflation has moderated and

the visibility on costs has also improved as, following a

period of temporary energy surcharges and short-term price

fluctuations, many suppliers are reintroducing normalised

fixed price periods of between 9 and 12 months. As weaker

industry sales rates continue to feed through to lower levels

of construction activity, the Group expects overall build cost

pressures to ease further in the months ahead.

Beyond this financial year, as the industry works towards

building to the requirements of the Future Homes Standard,

our Artisan Collection standard house-types and centralised

approach to design, procurement and site layout reviews will

continue to help the Group maintain efficiency and mitigate

cost pressures.

To protect the long-term health of the business, we continue

to focus on maintaining balance sheet resilience and

tight control over production expenditure. As previously

announced, given the weaker trading backdrop, we

have taken steps to reduce headcount across the Group,

whichhas unfortunately led to job redundancies and the

closure of two divisional offices. As part of this process,

the sites of the closed divisions have been transferred to

neighbouring divisions, where their ongoing development

will be managed by our experienced teams. Importantly,

these changes will not compromise the Group’s ability to

return to growth when trading conditions improve.

Recent trading

The combination of strong volume output and lower

reservation rates during the year led to a reduction

inthe value of the forward order book at 31 July 2023.

This comprised 4,411 homes (2022 – 7,223 homes)

andhaddecreased in value by 43.6% to £1,193.5 million

(2022– £2,114.3 million).

Since the start of the new financial year customer demand

continues to be affected by mortgage affordability

constraints, with reservations below the comparative rates

in the prior year. Overall, headline pricing has remained

firm, althoughtargeted incentives continue to be used to

attractcustomers and secure reservations.

In the nine weeks since 1 August, overall weekly reservations

were 133 per week (1 August to 2 October 2022 – 191) and

the private reservation rate was 99 per week (1 August to

2 October 2022 – 136). The private reservation rate includes a

bulk disposal to a private rental sector investor, on compelling

financial terms, comprising 71 homes (1 August to 2 October

2022 – nil). The private reservation rate per site per week

in the period was 0.41 (1 August to 2 October 2022 – 0.58),

including a contribution of 0.03 (1 August to 2 October

2022–nil) from the bulk disposal.

Reflecting recent trading and our construction programmes,

the forward order book has increased slightly since the

financial year end and comprised 4,636 homes as at

1 October (2 October 2022 – 7,257 homes), of which 71%

were exchanged (2 October 2022 – 71%). The order book

had a value of £1,232.3 million

as at 1 October (2 October

2022–£2,093.8 million).

Outlook

The stubborn inflationary environment and resulting increase

in mortgage interest rates over the last year continues to

impact affordability and customer demand. Against this

backdrop, Bellway is well-placed to deliver growth in outlets,

however, given the reduced order book and prevailing lower

reservation rates, there will be a material reduction in volume

output in the current financial year.

Based on an average weekly private reservation rate of 0.46

achieved in financial year 2023, the Group is targeting to

deliver completions of around 7,500 homes (2023 – 10,945

homes), and to end the year with a higher order book

(2023–4,411 homes) to serve as a platform for a return to

growth infinancial year 2025. The Board notes however,

that a wider than usual range of outcomes are possible,

andthe final volume outturn will depend on the trajectory

of mortgage interest rates and the strength of demand in

theautumn andspring selling seasons.

While current trading is challenging, we have been encouraged

by the more recent fall in UK Consumer Price Inflation. If this

trend continues, there are grounds for cautious optimism that

this could lead to a moderation in mortgage interest rates and

an improvement in customer demand.

Over the long term, Bellway’s divisional structure has significant

capacity to deliver sustainable volume growth. The Group’s

balance sheet and operational strengths combined with the

depth of our land bank provide an excellent platform for Bellway

to capitalise on future growth opportunities when they arise,

and to ensure ongoing value creation for our shareholders.

Jason Honeyman

Group Chief Executive

16 October 2023

Homes at Bellway’s Whitehouse Park development inMilton

Keynes,Buckinghamshire.

Strategic Report

33Bellway p.l.c. Annual Report and Accounts 2023

The Group’s commercial disciplines and proactive management

of site-based overheads helped mitigate some of the headwinds

faced in the challenging operating environment during the year.”

Keith Adey

Group Finance Director

Group Finance Director’s Review

Focused on stable

value creation

Earnings per ordinary share (p)

297.7p

+51.2%

297.7

196.9

316.9

2021 2022 2023

Group revenue (£m)

£3,406.6m

(3.7%)

3,406.6

3,536.8

3,122.5

2021 2022 2023

Operating margin (%)

(2)

14.8%

+610bps

14.8

8.7

15.4

2021 2022 2023

Operating profit (£m)

£505.3m

+63.5%

505.3

309.0

479.7

2021 2022 2023

Profit before taxation (£m)

£483.0m

+58.8%

483.0

304.2

479.0

2021 2022 2023

Total dividend per ordinary share (p)

140.0p

140.0140.0

117.5

2021 2022 2023

Underlying earnings per

ordinary share (p)

(2)(3)

328.1p

(22.0%)

328.1

420.8

350.9

2021 2022 2023

Underlying operating margin (%)

(2)(3)

16.0%

(250bps)

16.018.5

17.0

2021 2022 2023

Underlying operating profit (£m)

(2)(3)

£543.9m

(16.7%)

543.9

653.2

531.5

2021 2022 2023

Underlying profit before taxation (£m)

(2)(3)

£532.6m

(18.1%)

532.6

650.4

530.8

2021 2022 2023

Strategic Report

34 Bellway p.l.c. Annual Report and Accounts 2023

Trading performance

In a challenging market, the Group has delivered robust

housing revenue of £3,396.3 million (2022 – £3,520.6 million),

representing a 3.5% reduction on the prior year. Other revenue

was £10.3 million (2022 – £16.2 million) and comprises ancillary

items such as a land sale, commercial sales and management

fee income earned on our joint venture schemes.

Total revenue was 3.7% lower at £3,406.6 million (2022 –

£3,536.8 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

2023 2022 2023 2022 2023 2022

North 4,453 4,637 1,020 817 5,473 5,454

South 3,713 4,503 1,759 1,241 5,472 5,744

Group 8,166 9,140 2,779 2,058 10,945 11,198

Average selling price (£000)

Private Social Total

2023 2022 2023 2022 2023 2022

North 331.1 312.1 131.7 118.7 293.9 283.1

South 392.4 387.3 188.0 187.5 326.7 344.1

Group 359.0 349.1 167.3 160.2 310.3 314.4

Volume output was supported by the strong order book at the

start of the financial year, and notwithstanding the reduction

in reservation rates during the year, total completions reduced

by only 2.3% to 10,945 homes (2022 – 11,198). Due to our build

programmes and relative affordability constraints affecting

customer demand in some areas in the South, the Group’s

private output in this region reduced by 17.5% to 3,713 homes

(2022 – 4,503 homes). Overall private output reduced by 10.7%

to 8,166 homes (2022 – 9,140 homes) and was partly offset

by the accelerated construction of social housing homes.

This resulted in the proportion of social completions increasing

to 25.4% of the total (2022 – 18.4%). We have good visibility on

our near-term build programmes and given the lower private

order book and prevailing sales rates, we expect a further

increase in the proportion of social homes in the current

financial year.

The Group’s volume output had a broadly even contribution

from divisions located in the North and South of the country.

Each of our four strongest operating divisions delivered

in excess of 700 completions, all of which demonstrated

the capability of a well-run, mature division. While total

completions will be lower in the current financial year, all our

divisions have capacity for future growth and Bellway’s high-

quality land bank and experienced teams will help to drive a

recovery in volume output over the medium term.

The overall average selling price was £310,306 (2022 – £314,399),

and this modest 1.3% reduction was primarily driven by the

lower proportion of private completions. The overall average

selling price in the year ending 31 July 2024 is currently

expected to be around £295,000 with the moderation from

the level in the prior year reflecting a further increase in the

proportion of social homes and a continued use of incentives,

together with geographic and mix changes.

Underlying operating performance

The Group’s commercial disciplines and proactive

management of site-based overheads helped mitigate

some of the headwinds faced in the challenging operating

environment during the year. Notwithstanding this, the impact

of build cost inflation, extended site durations because of

slower reservation rates and the increased use of targeted

sales incentives led to a 210 basis point reduction in the

underlying gross margin to 20.2%

2,3

(2022 – 22.3%). As a result,

underlying gross profit decreased by 12.7% to £687.3 million

2,3

(2022 – £787.0 million).

Other operating income and expenses, which net to an

expense of £1.2 million (2022 – £0.2 million net income), relate to

the running of our part-exchange programme. Part-exchange

activity remained low and was used for only 1.7% of completions

(2022 – 1.1%), with a balance sheet investment as at 31 July

2023 of £18.0 million (2022 – £5.4 million). The Group has strong

controls around the use of part-exchange as a selling tool, and

we have the financial capacity to increase its use in the year

ahead, in a disciplined manner, if market conditions require it.

The administrative expense was £142.2 million (2022 –

£134.0 million), and the increase of 6.1% reflects underlying cost

inflation, rises in pay and employee benefits and a full year of

overhead costs for our Building Safety division. As a proportion

of revenue, administrative expenses were 4.2%

(2022 – 3.8%).

Given the uncertain outlook, we have a conducted a review

of overheads during the year and continued with a freeze on

recruitment. Two operating divisions have also been closed

as part of our wider workforce planning, and it is anticipated

that this difficult decision will result in a headcount reduction

across the Group of around 5%. In the current financial year,

we will maintain a sharp focus on costs, and due to ongoing

underlying cost and salary inflation, we expect full year

administrative expenses to be similar to the prior year.

The underlying operating margin for the full year decreased

by 250 basis points to 16.0%

2,3

(2022 – 18.5%). In the near term,

we anticipate headwinds from lower volume output, ongoing

pressures of cost inflation and the use of sales incentives to

persist. Overall, we expect these factors, together with the

effect of extended site durations, to lead to a reduction in the

underlying operating margin

2,3

of at least 600 basis points

inthe current financial year.

As future growth opportunities arise, overhead recovery will

improve, and we will continue with our disciplined approach

to land investment and cost management. Together with the

support of stable conditions in the housing market, the Board

believes an underlying operating margin in the mid-to high-

teens

2,3

is sustainable over the longer-term.

Adjusting item: Net legacy building safetyexpense

Bellway continues to act responsibly with regards to building

and resident safety, and this is reflected by the significant

resource and funding the Group has committed to remediate

its legacy apartments.

During the year, the Group signed the SRT with the DLUHC

and has been confirmed as a member of the RAS by the

DLUHC. We have also signed up to the Welsh Government

Building Safety Developer Remediation Pact and the Scottish

Safer Buildings Accord, reinforcing our responsible UK-wide

approach to legacy building safety.

Strategic Report

35Bellway p.l.c. Annual Report and Accounts 2023

In total, for the year ended 31 July 2023 Bellway set aside a

net £49.6 million (2022 – £346.2 million) for legacy building

safety improvements. The table below shows the primary

components of the net adjusting charge, split by half year

andtogether with the full prior year comparative:

H1 2023

£m

H2 2023

£m

FY 2023

£m

FY 2022

£m

SRT and associated review –

cost of sales expense 53.0 5.1 58.1 347.0

SRT and associated review –

cost of sales recoveries (50.0) – (50.0) (2.8)

Structural defects – cost of

sales expense – 30.5 30.5 –

Net cost of sales 3.0 35.6 38.6 344.2

SRT and associated review –

finance expenses 3.2 7.8 11.0 2.0

Total net legacy building

safety expense 6.2 43.4 49.6 346.2

In the first half of financial year 2023, the Group recognised

a net adjusting charge of £6.2 million, including one-off cost

recoveries of £50.0 million which had been pursued for

several years across a number of sites. In the second half,

the net adjusting charge was £43.4 million and included an

adjusting finance expense of £7.8 million which was in line

with previous guidance.

The second half charge includes £35.6 million provided

through cost of sales, of which £5.1 million reflects the

refinement of overall cost estimates in relation to the SRT

and associated review. It also comprises a £30.5 million

structural defects provision in relation to an isolated design

issue identified with the reinforced concrete frame of an

apartment scheme built 12 years ago in Greenwich, London.

We intend to seek recoveries from the entities involved in

the development of the Greenwich apartment scheme,

however,given the complexity of this process, these have

notyet been recognised as an asset.

The Group is carrying out a review of other buildings

constructed by, or on behalf of Bellway, where the same

third parties responsible for the design of the frame in the

Greenwich development have been involved. To date,

noother similar design issues with reinforced concrete

frameshave been identified.

The total amount Bellway has set aside for legacy buildings

in England, Scotland and Wales since 2017 is £613.3 million,

with a remaining provision of £508.2 million at 31 July 2023.

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.

The development of remediation strategies is a complex

exercise, involving many third parties, and there is often a

requirement to obtain planning and regulatory approval

before works commence. Against this backdrop and despite

the changes to regulations through the year, the Group’s

dedicated Building Safety division has made further progress

with remediation. Work is now completed on 9 developments,

underway on 12 developments and works are due to

commence on a further 2 developments in the first half of

thecurrent financial year.

Looking ahead, while the precise timings of cash outflows for

building safety improvements are uncertain, the SRT has set

out the standards required for internal and external works on

legacy buildings, therefore providing greater clarity for future

remediation. In the current financial year, we anticipate a cash

outflow for building safety to be in the range of £60 million to

£80 million (2022 – £32.9 million).

Bellway has a strong, well-capitalised balance sheet with net

cash of £232.0 million

, a net asset value of £3,461.6 million

and committed debt facilities of £530 million as at 31 July

2023. In this regard, the Group is well-placed to meet

its commitments for legacy building remediation and

importantly, the expected level and timings of the costs

willnot be detrimental to our long-term strategic priorities.

Operating profit

After taking the cost of sales adjusting items into

consideration, total operating profit increased by 63.5%

to£505.3 million (2022 – £309.0 million).

Net finance expense

The net finance expense was £20.9 million

(2022 –

£14.1 million) and comprises an underlying net interest

expense of £9.9 million

2,3

(2022 – £12.1 million) and as

highlighted earlier, an adjusting finance expense of

£11.0 million (2022 – £2.0 million) in relation to the unwinding

of the discount on the SRT and associated review provision.

During the year, a higher discount rate was applied to the

provision due to the rise in gilt rates, and this was the primary

driver of the increase in the adjusting finance expense.

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 £13.1 million (2022 – £7.3 million), with the

increase largely reflecting the rise in interest rates. The interest

charge on the fixed rate USPP debt was £3.4 million (2022

– £3.4 million). Net bank interest income, which includes

interest receivable on cash balances, commitment fees and

refinancing costs, was £4.4 million (2022 – £2.0 million net

expense) and again, this reflects the rise in interest rates

inthe period.

Based on prevailing interest rates, the net underlying interest

expense in financial year 2024 is currently expected to be

around £10 million

2,3

The adjusting finance expense in relation to the discount

unwind of the legacy building safety improvements provision

is subject to a range of assumptions, and based on the 31 July

2023 forward looking discount rate, we currently anticipate

an adjusting expense of under £10 million in the first half

of financial year 2024. 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 loss from joint ventures was £1.4 million

(2022– £9.3 million share of profit). The movement in the

year primarily reflected a lower number of completions as a

previously active development came to an end. In the year to

31 July 2024, we anticipate a modest loss of around £4 million

for our share of results from joint ventures, with this driven

byhigher interest rates on a longer-term scheme.

Group Finance Director’s Review continued

Strategic Report

36 Bellway p.l.c. Annual Report and Accounts 2023

Profit before taxation

Underlying profit before taxation was 18.1% lower at

£532.6 million

2,3

(2022 – £650.4 million). Reported profit

before taxation increased by 58.8% to £483.0 million

(2022–£304.2 million), with the decrease in underlying

profitability more than offset by the lower net legacy

buildingsafety expense in the year.

Taxation

The income tax expense was £118.0 million (2022 – £61.6 million),

reflecting an effective tax rate of 24.4% (2022 – 20.2%).

The effective tax rate increased in the period, following the full

year effect of the Residential Property Developer Tax (‘RPDT’),

which was introduced in April 2022 and charged at a rate of

4% of relevant taxable profits.

In addition, the increase in the standard rate of UK corporation

tax to 25% in April 2023 has contributed to the rise in the tax

rate and its full year effect means that the Group’s effective tax

rate is expected to approach 29% in financial year 2024.

Profit for the year

The underlying profit for the year decreased by 22.4%,

to£402.2 million

2,3

(2022 – £518.5 million) and underlying

earnings per share was 22.0% lower at 328.1p

2,3

(2022 – 420.8p).

After considering taxation charged at the increased effective

rate and the lower net legacy building safety expense,

reported profit for the year rose by 50.5% to £365.0 million

(2022 – £242.6 million). Basic earnings per share (‘EPS’)

increased by 51.2% to 297.7p (2022 – 196.9p).

Net cash and financial position

Bellway has maintained a strong balance sheet and ended the

year with net cash of £232.0 million

(2022 – £245.3 million),

representing an ungeared

position (2022 – ungeared).

Average net cash was £192.0 million

(2022 – £223.9 million),

demonstrating the resilience of the financial position

throughout the year.

Cash expenditure on land, including payment of land creditors,

was £467 million (2022 – £1,090 million), primarily comprising

cash payments on contracts approved in the previous two

financial years. Committed land obligations remain modest and

following further analysis of the Group’s land creditor contracts,

we now assess the year-end balance to be £368.8 million

(2022– £393.4 million). This represents low adjusted gearing,

inclusive of land creditors, of only 4.0%

(2022 – 4.4%).

In addition to the net cash position, the Group has access to

significant levels of committed, medium and long-term debt

finance, totalling £530 million. This comprises undrawn 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. We remain focused on preserving

Bellway’s balance sheet resilience and notwithstanding a

lower anticipated volume output and profit, we expect to

maintain an average net cash balance in the year ahead.

Strong balance sheet

The Group’s well-capitalised balance sheet principally

comprises amounts invested in land and work-in-progress,

with total inventories increasing by 3.4% to £4,575.6 million

(2022 – £4,423.6 million). The carrying value of land was

7.5% lower at £2,578.8 million (2022 – £2,786.4 million) and

the reduction was primarily driven by a fall in the number of

pipeline plots, following a period of lower land activity and

several pipeline sites gaining an implementable detailed

planning permission during the year.

Work-in-progress increased by 22.1% to £1,861.6 million

(2022 –£1,524.8 million) with the higher balance reflecting

underlying build cost inflation and our investment in site

infrastructure and early-stage foundation work, in preparation

for site openings in the year ahead. While this provides a

platform for outlet growth to help mitigate a slower sales

market, work-in-progress rose to 54.8% (2022 – 43.3%) as

a proportion of housing revenue, and we expect a further

increase in the current financial year, principally due to an

anticipated lower volume output.

In relation to its legacy, defined benefit pension scheme,

theGroup had a retirement benefit asset of £2.5 million

(2022 – £7.1 million) at 31 July 2023, reflecting an ongoing

commitment to fund this future, long-term obligation.

Ongoing value creation

During the year, the Group’s net asset value rose by 2.8%

to£3,461.6 million (2022 – £3,367.8 million). The increase was

mainly driven by profit for the year of £365.0 million being

partly offset by cash dividend payments of £171.7 million,

and after accounting for the £100 million irrevocable share

buyback programme announced on 28 March 2023.

The uplift in net asset value combined with the effect of the

share buybacks undertaken during the year resulted in a 5.3%

increase in NAV per share to 2,871p

(2022 – 2,727p).

The Board recognises the value creation opportunity

presented by additional share buybacks and reflecting our

disciplined approach to capital allocation, we will continue to

review the Group’s cash requirements as trading evolves in

the year ahead.

Underlying post-tax return on equity was 11.7%

2,3

(2022 – 15.4%)

and underlying RoCE was 15.8%

2,3

(2022 – 19.4%), or 14.3%

2,3

(2022 – 17.4%) when including land creditors as part of the

capital base. The moderation in these returns metrics was

predominantly driven by the lower underlying operating

margin, and a further reduction is expected in the current

financial year given an anticipated lower volume output and

underlying operating profit. Looking beyond the near-term

and given Bellway’s financial strength and high-quality land

bank, the Board is confident that through improvements in

both asset turn and operating margin, the Group can deliver

a normalised, longer-term recovery in underlying RoCE to

between 15%

2,3

and 20%

2,3

Over the longer-term, our current land bank alongside

disciplined investment in new land is essential to drive

volume output, to ensure the continued success of the

Group and to generate NAV growth. To support this future

investment, we will maintain our financial strength and the

Board remains sharply focused on delivering against the

Group’s strategic priorities to generate ongoing value creation

for shareholders.

Keith Adey

Group Finance Director

16 October 2023

Strategic Report

37Bellway p.l.c. Annual Report and Accounts 2023

A responsible and

sustainable approach

to our business

Bellway has been building exceptional quality new homes throughout the UK for more than 75 years,

creating outstanding properties and communities in desirable locations. We operate in a responsible

and sustainable way, but also recognise the growing importance of understanding the impact our

business has.

Customers and

Communities

Read about how we are

engaging in our communities

on pages 43 and 44.

Better with Bellway vision

Mapping key

sustainability topics with

business priorities

Business priorities

Customer First Diversity and

Inclusion

Upskilling

Workforce

Building Safely

Better with Bellway Overview

People Planet

Our flagship

business priorities

Customers

and

Communities

Putting customers

and communities

at the heart of

everything we do.

Building

Quality

Homes, Safely

Quality and safety

first for everyone.

Employer

of Choice

Creating an

environment that

our colleagues

can thrive in.

Strategic Report

38 Bellway p.l.c. Annual Report and Accounts 2023

We place sustainability at the heart of our business, it is

fully integrated into our day-to-day and long-term business

strategy. Our Better with Bellway strategy, which launched

in March 2022, embodies our approach to responsible

and sustainable business practice, with our eight strategic

business priorities 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.

Our sustainable approach is a key part of our business

strategy. It is what we do daily, ‘putting people and the planet

first’. Putting people first is about building quality homes, safely,

and extending that commitment to safety and sustainability

into the supply chain, we 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 customers’ carbon footprint.

We rethink and reduce 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.

Employer of Choice

Read about our commitment to

being a diverse and inclusive

employer on pages 46 and 47.

Carbon Reduction

Read about the work we have

started to deliver lower carbon

and energy efficient homes on

pages 49 to 52.

People Planet

Responsible

Sourcing

Carbon

Footprint

Modern

Slavery

Charitable

Giving

Low Carbon

Homes

Resource

Efficiency

Biodiversity

Sustainable

Supply Chain

Driving

sustainability

through long-

term partnerships.

Charitable

Engagement

Giving, to build

better lives.

Resource

Efficiency

Designing

out waste by

building better.

Biodiversity

Protecting and

preservingnature.

Carbon

Reduction

Delivering low

carbon homes.

Strategic Report

39Bellway p.l.c. Annual Report and Accounts 2023

Better with Bellway Overview continued

Sustainability strategy

We initially reviewed our corporate responsibility in 2021,

withthe objective of creating 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. This helped

us form our Better with Bellway strategy. Using the results from

a materiality assessment and strategic analysis, we identified

the key strategic sustainability themes for the business.

A full summary of the work undertaken to help us form this

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 our key sustainability

risks and opportunities, enabling us to set ambitious goals and

KPIs to help drive and embed sustainability within Bellway,

andcontinuing to build stakeholder trust.

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 43 to

62), weidentified three as flagship – Customers and

Communities; Employer of Choice; and Carbon Reduction.

These are the areas Bellway can make the most significant

beneficial impacts.

The strategy will now be overseen by the new Sustainability

Committee who manage sustainability at a strategic level,

oversee 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 Steering

Group, made up of senior leaders who hold responsibility

for the eight business priorities of Better with Bellway.

This steering group 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.

The Steering Group reports into the Leadership Group,

attended by the Group Finance Director and Group General

Counsel and Company Secretary, which in turn is overseen

by the Sustainability Committee.

Reporting frameworks

We have developed the Better with Bellway targets and

KPIs with a view to meeting the requirements of two ESG

reporting frameworks that were identified as most relevant

toour investors:

• Sustainable Accounting Standards Board (‘SASB’), see pages

91 to 95 for further detail; and

• United Nations Sustainable Development Goals (‘SDGs’),

integrated into this section under each business

priority area.

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, as well as looking at reporting

against the Global Reporting Initiative (‘GRI’) new 2021

standards in the future.

We continue to contribute to the Carbon Disclosure Project’s

(‘CDP’) Climate Change and Forests programmes. Our latest

scores were ‘Awareness – C’ for Climate Change and

‘Awareness – C’ for Forest, in line with the CDP programme

global average.

We have benchmarked our Better with Bellway strategy

where it aligns with the 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 sustainability

strategy needs to contribute to rapid action and improvement.

As part of our sustainability strategy, we aim to support

progress on the SDGs, and all of the eight Better with Bellway

business priorities were mapped against the 17 SDGs and the

169 targets that sit within them.

Strategic Report

40 Bellway p.l.c. Annual Report and Accounts 2023

Achieved our

5-star

homebuilder

status

for the seventh consecutive year running, recording a

Recommend a Friend score of

91.1%

(2022 – 93.6%)

Flagship business priorities headline KPIs

Customers and Communities

Implemented our fourth Employee Engagement Survey,

achieving an average ‘a great place to work’ engagement

score over a 3-year period.

91%

(2022 – 93%)

Employer of Choice

Achieved a

35.6% reduction

in our scope 1 & 2 emissions against the baseline.

Ourscience-based target is a 46% reduction by 2030

Carbon Reduction

Our key achievements in 2022/23

FY23 saw the second year of progress against our Better

with Bellway targets. In total we had 47 external targets

spanning the eight business priority areas of which 16

have already been achieved, 21 are in progress and

10 have been missed or re-evaluated where business

priorities have changed or the planned objectives have

been delivered via other means. Full details of target

performance can be found under the relevant Better with

Bellway business priority sections.

targets achieved

targets in progress

targets missed

Targets and KPIs

As part of our Better with Bellway strategy, we have developed

a set of short, medium, and long-term sustainability targets

and corresponding KPIs under each business priority that

will enable Bellway to turn our sustainability 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 underpin the Better with Bellway sustainability strategy

and are reviewed on an annual basis to ensure they are the

most suitable targets to help us to 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.

A headline target has been set for each business priority

area. These headline targets reflect the vision for the relevant

business priority and are normally at least two years in

duration, allowing us to deliver sustained improvement in the

area in question. They allow the Better with Bellway strategic

vision to be easily communicated to stakeholders and are

reported as principal KPIs in this report (see pages 12 and 13).

Strategic Report

41Bellway p.l.c. Annual Report and Accounts 2023

Better with Bellway Overview continued

Achieved our

5-star

homebuilder

status

for the seventh consecutive

year running, recording

a ‘Recommend a Friend’ score

of 91.1% (2022 – 93.6%)

Implemented our fourth

Employee

Engagement

Survey

achieving an average ‘a great

place to work’ engagement score

over athree-year period of 91%

(2022–93%).

Continued our partnership

with Cancer Research

UK, raising

£580,048

this year, bringing our six-year

total to £3.14 million, achieving

our£3 million target early.

Achieved a reduction of

10%

in absolute terms in our scope 1and

2 carbon emissions (tonnes CO

against FY22.

Delivered plans to facilitate

10%

biodiversity net gain on new

developments submitted for

planning from July 2023.

Introduced a trial of HVO

biofuelacross over 50 of our

sites,utilisingover

679,442 litres

of biofuel and saving over 1,700

tonnesof carbon.

Implemented a

salary

sacrifice

scheme

to allow employees to lease EV

vehicles in a cost-effective manner.

Sites now incorporate

Hedgehog

Highways

over 1,300 homes now have gardens

accessible to hedgehogs.

Completed our

‘Future Home’

in the University of Salford Energy

House 2.0 facility to test innovations

in building materials and new

technologies that will form part

of our Future Homes Standard

specification in 2025.

Maintaining our focus on our waste

diversion rate running to

99.5%

(2022 – 99.5%).

Increased the proportion of

REGOelectricity we procure to

78.4%

across the year saving 3,109

tonnes of carbon fromentering

the atmosphere.

Key highlights from the year

Introduced a Volunteering Policy

across the Group, enabling

employees to donate

1 paid day

tovolunteer

for a good cause of their choice.

Strategic Report

42 Bellway p.l.c. Annual Report and Accounts 2023

Better with Bellway Strategy and Priorities

Target Progress Performance

Headline

Increase year-on-year the HBF 9-month survey

score with the objective of achieving 90% by

July 2026.

Current performance at 80.6% (2022 – 82.1%).

Retain 5-star

homebuilder status (>90%

‘Recommend a Friend’) and improve our score

to 95% by July 2023.

Current performance at 91.1% (2022 – 93.6%). This target

will be rolled forward to FY24.

Improve NHBC Construction Quality Review

score to 85.0% by July 2023.

FY23 score of 87.9% (2022 – 84.5%).

Reduce the average number of reportable

items per home to 0.225 by July 2023.

FY23 score of 0.350 (2022 – 0.274).

Improve communications with customers via

a new customer care telephone system and

service level KPIs.

The new telephone system is in place in the majority

ofour divisions and a reporting suite is used to manage

performance in the handling of customer calls.

Customers and Communities

Putting customers and communities at the heart of everything we do

We’re proud of the 5-star

homebuilder rating we

received in the 2022/23 NHBC survey, the seventh

consecutive year we have received this accolade,

with a score of 91.1%. Our aim is to build on our

previous success and ensure that we continue to

exceed our existing levels of customer satisfaction.

Customer satisfaction

Bellway’s performance in the ‘Recommend a Friend’ question

in both the 8-week and 9-month survey periods, while affected

by challenges across the industry, remains positive with a

current performance of 91.4% of customers recommending

Bellway to a friend after 8-weeks, and 80.6% of customers

recommending Bellway to a friend in the 9-month survey.

Our Customer First programme has contributed to continuing

improvements in Bellway’s customer service, with our

customers responding to the ‘Service After’ question in both

the 8-week survey and 9-month survey with the highest

levels of satisfaction recorded in the 8-week survey since

2008, and the 9-month survey since 2013.

We have exceeded our NHBC Construction Quality Review

(CQR) target of 85%, with a score of 87.9% (2022 – 84.5%).

There are still areas for improvement, demonstrated by

missing the target to reduce Reportable Items (‘RIs’) per

home. For RIs per home, this increased to 0.350 items

per home in 2023 (2022 – 0.274), short of the 0.225 target.

This area will be given renewed focus in FY24 as we strive

to continuously improve the service we deliver to our

customers. Our commitment to quality has again been

recognised in the NHBC Pride in the Job Awards. In 2023

a total of 34 Bellway and Ashberry site managers collected

awards (2022 – 36), acknowledging site managers who

have achieved the highest standards in housebuilding,

recognising their technical knowledge, leadership qualities

and organisational skills.

Brothers Jonathan and Steve with their partners, at our Wolds View

development, Driffield.

FLAGSHIP BUSINESS PRIORITY

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 continued to develop our

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 664 secondary schools, and

with 166 primary schools, with activities including receiving

the Bellway newsletter, engaging with the ‘Open Doors’

campaign, and face-to-face interactions.

We have launched our new Volunteering Policy, and we

encourage all employees to use a day working with a local

charity or organisation, please see page 60 for more detail.

Strategic Report

43Bellway p.l.c. Annual Report and Accounts 2023

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 FY23

our investment amounted to £89.2 million (2022 – £117.2 million),

bringing our investment over the past three years to

£277.7 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 £2.4 billion in gross

value added while supporting an estimated 28,800 to 34,100

direct, indirect and induced employment opportunities across

the country. In addition, Bellwaycontributed £208.8 million to

the public finances in 2023, aswell as facilitating £69.3 million

in New Homes Bonus andcouncil tax payments to

local authorities.

Better with Bellway Strategy and Priorities continued

Customers and Communities continued

Andrew Odams, Sales Manager at Bellway Northern Home Counties,

donating hi-vis jackets to Stanton Cross Primary School.

Affordability

With the ongoing shortage of new homes in the UK, together

with cost of living pressures, affordability is still viewed as a

barrier for 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

£310,306 (2022 – £314,399). In 2023 18.6% of our homes were

sold to unassisted first-time buyers (2022 – 12.7%), while9.7%

(2022 – 21.7%) were sold to customers using oneof the various

government Help-to-Buy schemes. Overall,28.3% (2022 –

34.2%) of our homes were sold to first-time buyers and our

developments have continued to incorporate affordable

housing, with 25.4% (2022 – 18.4%) of new homes sold to

affordable housing providers this year.

Homes sold to affordable

housing providers

25.4%

(2022 – 18.4%)

Houses purchased by

unassisted first-time buyers

18.6%

(2022 – 12.7%)

Homes purchased

by customers using

Help-to-Buy schemes

9.7%

(2022 – 21.7%)

Homes purchased

by first-time buyers

28.3%

(2022 – 34.2%)

Future KPIs

All new sites starting construction works in FY24 to

incorporate House to Home view homes.

Introduce new site-based quality management and

compliance system including training for all site teams by

July2024.

Strategic Report

44 Bellway p.l.c. Annual Report and Accounts 2023

Dusty Boots events rolled

out across the Group

This year, the Group launched the ‘Dusty Boots’

events, across the nation, hosting 85 events across

19 of our divisions. This event offers an exclusive

tour, to see behind the scenes of our developments

and have a ‘sneak peek’ inside our new homes

under construction.

They give visitors the opportunity to find out more

about how our homes are built, the materials that

go into making them and the energy efficiency

measures that are included. Throughout the day,

a range of house types are on show, all of various

levels of development, showcasing elements of

our homes that are not necessarily visible once the

homes are complete.

Building better

knowledge in

our communities

Site Manager

Lee Aston and

Sales Advisor

BarbaraKelly.

It is a unique experience for us as a

housebuilder to better connect with our

buyers and help support customers along

the new-home buying process and in-turn

buyers having the excitement of wearing

ahard hat and boots and going out on site.”

Zoe Dobbs

Sales Manager – Bellway North London

Strategic Report

45Bellway p.l.c. Annual Report and Accounts 2023

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 with three-year average score of 91%

(FY21–FY23). We will continue to monitor in line

with the original target.

89% of staff would recommend Bellway as ‘a great

place to work’ in July 2023 survey (2022 – 95%).

Reduce voluntary employee turnover rate

to18% or less by July 2024.

Turnover rate in FY23 was 21.9% (FY22 – 25.7%).

Improve gender diversity of our directly

employed workforce to a 60/40 male/female

split by July 2025.

69/31 split for FY23 (FY22 – 69/31).

Improve gender diversity of our senior

leadership teams to 75/25 male/female split

byJuly 2025.

79/21 split for FY23 (FY22 – 77/23).

Improve ethnic diversity of our workforce

to7%or more by July 2025.

FY23 diversity of 4.9% based on current ethnic

minorities classifications (FY22 – 4.5%).

Become a Living Wage Employer by July 2024. We are now an Accredited Living Wage Employer.

Increase percentage of our workforce in an

‘earn and learn’ role to 12% by July 2024 and

maintain 5% Club Gold membership.

Currently 8.3% of the workforce are in ‘earn and

learn’ roles with 12 new graduate and 30 new

apprentice roles recruited in FY23 and we have

retained our 5% Club Gold membership for FY23.

Implement a programme to improve social

mobility and disability diversity within Bellway

by FY23.

A new process to collect diversity data from

employees has been introduced, and we have

worked with Percy Hedley and Change 100 to

promote disability inclusion.

Employer of Choice

Creating an environment that our colleagues can thrive in

FLAGSHIP BUSINESS PRIORITY

The people who work for Bellway are one of the

key strengths of the company. 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. As of 31 July 2023 we

directly employed 2,979 people (2022 – 3,042),

althoughwhen we factor in people employed

as a result ofBellway’s operations across our

subcontractors and supply chain, we support

between 28,800 and34,100 jobs.

Engagement

We undertook our fourth 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89% (2022 – 95%), with a three-year average score of 91%

(FY21–FY23) against a target to achieve an average score

of90% or above, 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

business priority area of Better with Bellway, we continue

to have a range of targets to improve the diversity of our

workforce, in terms of gender and ethnicity, at all levels of

the business. We have encouraged employees to provide

us with a greater range of diversity data, such as disability,

gender identity and socio-economic background through

our #IamUnique campaign, to help us better understand

our workforce.

Better with Bellway Strategy and Priorities continued

Strategic Report

46 Bellway p.l.c. Annual Report and Accounts 2023

During FY23 we launched our inclusivity strategy which

sets out how we will work towards becoming an inclusive

employer of choice and to support the application of this

strategy, we have implemented Clear Assured, a recognised

inclusion standard. We currently have bronze status, and we

are working towards achieving silver by December 2024.

In January 2023, in collaboration with the HBF, Women into

Construction and eight other housebuilders, the Women into

Housebuilding Programme was launched to attract more

females into Trainee Assistant Site Manager roles. We recruited

one trainee from the first cohort and we are actively

participating in the second cohort and subsequent cohorts

with a view of recruiting more females into these roles.

We aim to improve social mobility and disability diversity

within Bellway. To support this ambition, we have supported

the Leonard Cheshire’s Change 100 Programme by providing

paid work placements.

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 gold 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 8.3% of our workforce were in earn and learn

roles and we have recruited 12 new graduate and 30 new

apprentice roles, who joined Bellway in September 2023,

despite a challenging trading environment.

We have been focused on upskilling our workforce to

ensure that we attract and retain key talent. We have

replaced our e-learning platform with a learning experience

platform, which provides employees with the opportunity

to access additional training to support their development.

In September 2022, we launched our CMI accredited middle

managers programme ‘Elevate’ for 50 managers (50/50

gender split) and we continue to roll out our senior leaders

programme. In addition, we have created a number of other

bespoke training programmes, such as inclusive hiring and

fire training.

Due to the uncertain market backdrop, we recently reorganised

our operational structure which resulted in some headcount

reductions across the Group.

Responsible employer

As a responsible employer we are committed to ensuring that

all of our people are treated with fairness, consideration and

respect. 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. Employees 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 2023 has fallen to 21.9% (2022 – 25.7%) working towards

our target rate of 18% by 2024. We have achieved becoming

an Accredited Living Wage employer, offering competitive

remuneration and benefits. 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.

Future KPIs

Implement a formal staff appraisal process across the business

with a proposed launch date of February 2024.

Achieve ‘Clear Assured’ Silver status by December 2024,

bydemonstrating that diversity and inclusion are reflected

across all policies and processes.

Shaun Miller, Trainee Assistant Site Manager at our Somerford Gate

development in Congleton.

Strategic Report

47Bellway p.l.c. Annual Report and Accounts 2023

Better with Bellway Strategy and Priorities continued

Employer of Choice continued

Creating

better workplaces

for women

Proud of our award

winning all-female

site team

Bellway is delighted to celebrate its all-

female site team, of three women heading

up construction at Arrowe Brook Park

inUpton, Wirral.

The trio joined Bellway through our early

careers programmes.

Beth Guttridge, Assistant Site Manager,

joined in January 2020 as part of the first

cohort of our Graduate programme.

Amelia Size joined Bellway in 2022,

asaTrainee Assistant Site Manager

onourTrainee programme.

Site Manager, Jess Licence joined Bellway

on our Apprenticeship programme and

recently received her second Pride in the

Job award, impressing the judges with the

team’s exacting standards, and commitment

to the highest quality across all areas of the

construction process.

Bellway is continuing to encourage females

to come into the industry and are actively

collaborating with the HBF in their ‘Women

into Construction programme’ to recruit

more Trainee Assistant Site Managers,

like Amelia.

Many years ago I realised that a career in

construction was a career for life, with lots

of opportunities and so many varied roles.

Bellway was one of the first housebuilders

in Liverpool to offer apprenticeships and

when I looked into the options, it seemed

they spent a lot of time, effort and money in

developing individuals within the company,

which really appealed to me.”

Jess Licence

Site manager at Arrowe Brook Park

Jess Licence, Beth Guttridge and

Amelia Size, site team at Arrowe

Brook Park.

Strategic Report

48 Bellway p.l.c. Annual Report and Accounts 2023

Target Progress Performance

Headline

Reduce ‘absolute’ scope 1 and 2 emissions

(tonnes CO

e) by 46% by July 2030 against

FY19 baseline.

Our Science Based Target has previously been validated by

the SBTi. FY23 saw absolute emissions fall to 16,562 tonnes

e, a 10.0% reduction against the previous year and

a 35.6% reduction against our base year (FY22 – 18,405;

FY19base year – 25,715).

Reduce scope 3 emissions (tonnes CO

perm

floor area) by 55% by July 2030 against

FY19 baseline.

Our Science Based Target has previously been validated

by the SBTi. FY23 saw emissions remain broadly stable at

1.52 tonnes CO

e per m

floor area (FY22 restated – 1.51,

FY19 restated base year – 1.53).

100% electricity purchased will be REGO

certified by December 2023.

For FY23, 78.4% of electricity purchased across the year

was REGO certified (2022 – 72.2%).

Complete the build of a Future Homes Standard

house in Salford University’s Energy House 2.0

facility by the end of 2022 and begin testing.

Our Future Home at Energy House 2.0 is complete,

andtesting has begun to compare theoretical design

versus as built performance for all FHS solutions.

Install Google Smart Home Technology in all

homes on two sites by December 2022 and

assess energy saving benefits.

Trials were successfully completed and Google Smart

Home Technology will now be fitted as standard in all

new 2021 part L building regulation homes.

Build circa 2,000 units (20% of output) in timber

frame by 2024, reducing embodied carbon.

All new sites in our North East division in FY23

incorporated timber frame, and we have expanded its

use to new sites in our Durham and Yorkshire divisions.

Including our Scotland divisions, in FY23, 1,247 units were

constructed in timber frame (FY22–894).

Complete net zero ready exemplar plots at

three sites and install monitoring equipment

to compare energy consumption and

running costs.

Four net zero homes were built and sold at Callerton

(Newcastle upon Tyne) and we are working with

the purchasers to monitor energy consumption.

Planning delays have meant that construction at another

two sites has not progressed so these will be taken

forward to FY24.

Switch to Hydrotreated Vegetable Oil (‘HVO’)

Green Diesel biofuel by FY24.

Successful trials have been undertaken and in FY23 we

used 679,442 litres of biofuel, saving over 1,700 tonnes

of carbon.

Review car allowance payments to promote

choice of low emission, hybrid and electric

vehicles by 2025.

As at FY23, 50.4% of the fleet was low emission,

hybridor electric.

Implement a salary sacrifice scheme to allow all

employees to lease electric vehicles by the end

of 2022.

The salary sacrifice scheme was rolled out across

theGroup in August2022.

Carbon Reduction

Delivering low carbon homes

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 FY19 base year,

aligned to the 1.5°C pathway.

FLAGSHIP BUSINESS PRIORITY

Strategic Report

49Bellway p.l.c. Annual Report and Accounts 2023

• Bellway commits to reduce scope 3 GHG emissions by 55%

per square metre of completed floor area by July 2030 from

a FY19 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 inthe

base year).

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 goes 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

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 second year progress isreported below:

• Against our scope 1 and 2 Science Based Target,

FY23 market-based emissions fell by 10.0% to 16,562 tonnes

of CO

e (2022 – 18,405 tonnes). This represents a 35.6% fall

from the FY19 base year (25,715 tonnes), against a targeted

reduction of 46% by 2030.

• Against our scope 3 Science Based Target to reduce

GHG emissions per square metre of completed floor area,

FY23emissions were 1.52 tonnes per m

, remainingbroadly

stable against the FY19 base year (1.53 tonnes per m

The main reductions in scope 3 emission will be delivered

in the coming years when the 2021 part L building

regulations, andthen the 2025 Future Homes Standard

building regulations, take effect.

Streamlined Energy and Carbon Reporting

(SECR)Disclosure

In accordance with the Companies Act 2006 (Strategic Report

and Directors’ Reports) Regulations 2013 and the Companies

(Directors’ Report) and Limited Liability Partnerships (Energy

and Carbon Report) Regulations 2018 (SECR), we report on

our greenhouse gas (‘GHG’) emissions as part of the annual

Strategic Report. Our GHG reporting year is the same as our

financial year and the previous year’s figures have been

provided as comparators.

Scope 1 covers emissions from the combustion of fuel and

operation of facilities owned/operated by the company

(forexample diesel in site generators and telehandlers; fuelin

company cars used on company business; gas for heating

in offices, show homes and 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 0.18% of the total

scope 1 and 2 footprint.

• Emissions from air conditioning units in office buildings in

the FY19 footprint due to immateriality and difficulty in data

collection. We have collected and accounted for this data

inthe FY22 and FY23 footprints.

• Emissions from site-based combined heat and power units

for which we do not have operational control.

An element of carbon estimation is undertaken in the

following areas:

• Diesel fuel usage on a small number of sites where fuel is

provided by our groundworks contractors. Bellway’s share

of the usage is estimated based on forklift usage.

• Divisional offices where gas and electricity usage are

included within landlord charges. Bellway’s usage is

estimated using a kWh per square metre of occupied floor

space figure derived from other divisional offices with utility

billing in place.

For scope 1 and 2 emissions, data for the FY19 base year has

been externally verified by Zeco Energy to a ‘reasonable

assurance level’ using the ISO-14064-3 verification standard,

while FY22 and FY23 emissions have been verified by the

Carbon Trust to a ‘limited assurance level’ using the ISO

14064-3 verification standard.

For scope 3 emissions, FY23 emissions have been verified

by the Carbon Trust to a ‘limited assurance level’ using the

ISO 14064-3 verification standard. Emissions for our FY22

were verified by the Carbon Trust to a ‘limited assurance

level’ using the ISO 14064-3 verification standard, but have

been restated this year following improvements in our scope

3 modelling. Emissions for the FY19 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.

Scope 3 emissions for our FY19 base year and for FY22

have been restated following improvements in our scope

3 modelling.

Better with Bellway Strategy and Priorities continued

Carbon Reduction continued

Strategic Report

50 Bellway p.l.c. Annual Report and Accounts 2023

Greenhouse gas emissions (GHG) (tonnes of CO

(a)

2023 2022

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) 15,116 16,696 20,560

Scope 2 – Electricity purchased for our own use (market-method)

(b)

1,446 1,709 5,155

Total market-method Scope 1 and 2 GHG emissions 16,562 18,405 25,715

GHG intensity (market-method) per Bellway home sold 1.5 1.6 2.4

GHG intensity (market-method) per Bellway employee

(c)

5.3 6.2 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)

15,116 16,696 20,560

Scope 2 – Electricity purchased for our own use (location-method)

(d)

3,979 4,419 5,518

Total location-method Scope 1 and 2 GHG emissions

(d)

19,095 21,115 26,078

GHG intensity (location-method) per Bellway home sold 1.7 1.9 2.4

GHG intensity (location-method) per Bellway employee

(c)

6.1 7.1 8.8

Out of scope emissions

(e)

1,678 – –

Energy consumption used to calculate above emissions (kWh) 96,735,314 92,854,473 109,622,315

Scope 3 (Category 1a: Purchased goods and services – product) 383,179 394,161 380,164

Scope 3 (Category 1b: Purchased goods and services – non-product) 15,934 13,095 16,261

Scope 3 (Category 2: Capital goods) 2,066 4,718 19,030

Scope 3 (Category 3: Fuel and energy related activities) 5,044 5,142 5,081

Scope 3 (Category 4: Upstream transportation and distribution) 81,653 83,895 80,916

Scope 3 (Category 5: Waste generated in operations) 2,447 2,391 4,253

Scope 3 (Category 6: Business travel) 2,653 1,987 418

Scope 3 (Category 7: Employee commuting) 1,489 1,516 1,468

Scope 3 (Category 11a: Use of sold products – direct) 958,055 1,024,798 998,544

Scope 3 (Category 12: End-of-life treatment of sold products) 91,865 94,102 90,761

Total Scope 3

(f)

1,544,385 1,625,805 1,596,895

Scope 3 – GHG intensity (tonnes CO

e per m

of completed floor area) 1.52 1.51 1.53

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 does not account for the zero-carbon nature of electricity supplies purchased under

REGO contracts.

e. ‘Out of Scope’ biogenic emissions arising from our consumption of HVO biodiesel.

f. 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 68,103 tonnes of CO

e (2022 – 79,690, 2019 – 88,663). Categories 8, 9, 10, 14 and 15 are not relevant to the Group.

Scope 1 emissions fell by 9.5%, largely due to our use of HVO

biofuel in site generators and telehandlers which delivers a

c.90% carbon reduction compared to traditional white diesel.

Our use of HVO has saved over 1,700 tonnes of carbon from

entering the atmosphere this year. Scope 2 emissions (market-

based) have again fallen by 15.4%, due to our increased

use of REGO (Renewable Energy Guarantee of Origin)

electricity supplies and the ongoing decarbonisation of the

UK electricity mix. 78.4% of our electricity is from renewable

sources (2022 – 72.2%) which has saved 3,109 tonnes of

carbon in the past year. Discounting the benefit of our REGO

supplies, location-based scope 2 emissions fell by10.0%.

With 10,972 new homes (including share of JV’s) completed for

the year, scope 1 and 2 emissions (market-based) per home

sold fell by 6.3% to 1.5 tonnes (2022 – 1.6). With employee

numbers largely static, our scope 1 & 2 (market-based)

emissions per employee have fallen by 14.5% to 5.3 tonnes

(2022 – 6.2).

Improvements in scope 3 emissions will take longer

tobring to fruition. Step change savings will be made as

wetransition to the 2021 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,

soan additional 45–50% over and above the 2021 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

home specifications and engagement with our supply chain

to reduce embodied carbon in the materials we use to build

new homes.

Strategic Report

51Bellway p.l.c. Annual Report and Accounts 2023

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 have completed the build of 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’ was built at The University of Salford’s

leading net-zero research facility Energy House 2.0 and

will now test innovations in building materials, the effects of

double and triple glazing, storing solar energy, recovering

heat from wastewater, and how to make the 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

plan to set up across the country to work with new energy

efficient technologies. Four ‘Future Homes’ have been built

in Callerton, Newcastle upon Tyne, which were sold on

the open market to customers who expressed an interest

in owning a home utilising the latest energy efficient

materials and technology. Bellway will continue to work

with these homeowners to monitor energy usage as part

of Bellway’s wider Carbon Reduction strategy. In addition,

following successful trials of Google smart thermostats, we

have specified this technology as standard for all new 2021

standard homes.

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 2023, 21.2% of new

homes were fitted with this technology (2022 – 25.0%), helping

to both reduce carbon emissions and also reduce energy

bills for customers. Going forward, PV panels will be standard

on all 2021 part L building regulation specification homes.

On average, the Dwelling Emission Rate (‘DER’) of our new

homes this year was 7.0% better than required by the relevant

building regulations (2022 – 6.9%). (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

The successful trials of HVO biofuel alternative to traditional

diesel has been completed. Despite a price premium

ofc.30p per litre over traditional diesel, in FY23 we purchased

679,442 litres of biofuel for our generators and telehandlers,

representing 14% of our annual site fuel usage. The use of

this fuel has saved 1,700 tonnes of carbon from entering the

atmosphere and we will continue to explore the economics

of expanding our use of this fuel as we seek potential

ways todeliver significant reductions in our scope 1 and

2 emissions, contributing progress towards our Science

Based Targets.

Electrifying the car fleet

We successfully introduced a salary sacrifice lease scheme

toallow Bellway staff a more affordable route to electric

vehicle ownership, helping them reduce their own carbon

footprints. Following the launch of the scheme in August

2022, a total of 74 employees have taken advantage of the

scheme, supported by the installation of EV charging points

atall Bellway offices to enable staff to charge their vehicles.

Future KPIs

All divisions to commence Air Source Heat Pump (‘ASHP’) trial

sites, delivering space and water heating by December 2024.

Establish a programme to support SME housebuilders

through general mentoring, interactive video and in person

training days at Future Homes exemplar projects.

Better with Bellway Strategy and Priorities continued

Carbon Reduction continued

Streetview at our Abbey Heights development in Newcastle

uponTyne.

Strategic Report

52 Bellway p.l.c. Annual Report and Accounts 2023

Target Progress Performance

Headline

Reduce the annual RIDDOR rate to below

thethree year rolling average by July 2024.

The RIDDOR rate for FY23 is 221.15 versus a rolling

average for FY21 – FY23 of 193.43 (FY22 RIDDOR rate:

240.08, FY19 –FY22 rolling average: 161.66 (FY20 has

been excluded due to COVID-19 and site closures)).

>80% of applicable employees trained

ontheGroup’s Fire Safety Policy and the

Building Safety Bill by July 2024.

Although missed there has been strong progress made

towards this target, with 77% of applicable employees

having received training by 31/12/2022. This programme

and the Fire Safety Policy have recently undergone

areview and an up-to-date training course will be

rolledout in FY24 to applicable employees.

Reduce accident rates from identified reporting

areas to below previous FY levels year-on-year.

During FY23 there were no third party reported

accidents, manual handling injuries fell by 5%.

Slips,tripsand falls increased to 113 from 78 in FY22.

95% of identified target roles will have received

health and safety training by July 2023.

New health and safety training was rolled-out during

FY23 and 98% of target roles were trained as at

31 July 2023.

Implement new safety induction across Bellway

and 100% of new recruits to construction sites

tohave completed induction by July 2023.

Programme created and has been launched in FY23

with all new recruits to construction sites completing

the induction.

Increase the ratio of mental health first aiders

(‘MHFA’) to 1 in 10 (10%) by July 2024.

Current percentage for FY23 is 5.8% (FY22 – 2.9%).

Increase employees receiving mental health

awareness training to 1 in 5 (20%) by July 2024.

Currently 10.4% of the population have received mental

health awareness training (FY22 – 5.3%).

Achieve ISO 14001 certification for the whole

business by July 2026.

We are in the process of working towards certification.

The health, safety, and wellbeing of our colleagues,

visitors, subcontractors and customers is our highest

priority. This area demands our full focus, as we

continually set ambitious goals for our organisation.

We ensure the highest standards of health and safety

on our sites, andthroughout Bellway.

Encouraging safety and transparency

In April 2023 the Health and Safety Executive (‘HSE’) issued

guidance clarifying that the following three principles must

bemet for an incident be classed as RIDDOR reportable:

1) Extent of injury and/or length of absence.

2) Meets the HSE definition of an accident.

3) Event must be work related.

Historically, Bellway classed an incident as RIDDOR reportable

if one or more of the three principals were met. The prior

year RIDDOR rates disclosed have been restated to apply

theguidance issued by the HSE.

We continue to promote health and safety throughout

our business, with a particular focus on mental health and

accident reporting in the last financial year. Our aim is to have

a mentally healthy, resilient workforce, who feel supported in

the workplace. We continually look to train more employees

on mental health awareness, with more mental health first

aid trainers now employed in Bellway. These employees

carry out training for our colleagues both virtually and in

classroom environments. The courses are highly interactive

and help us actively engage with attendees. These courses

were developed in conjunction with Mental Health First

Aid England.

With the increasing focus on biodiversity on sites and

the environmental impact our business has on the wider

community. We have started to conduct benchmarking

activities in Environmental Management, helping us to

identify areas for potential improvement. In addition, wehave

also written and delivered training courses to support the

management team’s understanding and application of

environmental standards on site.

Building Quality Homes, Safely

Quality and safety first for everyone

Strategic Report

53Bellway p.l.c. Annual Report and Accounts 2023

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 reducing the

annual RIDDOR rate to less than the rolling three year average

by July 2024. The RIDDOR rate for FY23 is 221.15 versus a three

year average for FY21 to FY23 of 193.43 incidents per 100,000

site operatives, against a FY22 rate of 240.08 and a previous

three year rolling rate of 161.66, 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. During the year the number of slips, trips and falls

incidents increased to 113 (2022 – 78), there were nil third

party reported accidents during FY23, while manual handling

injuries saw a 5% decline with 76 incidents in the year

(2022–80).

Mental health

The mental health of our colleagues is vitally important

to Bellway, and we are continuing to target an increase

in the amount of mental health first aiders to 10% by FY24

(FY23–5.8%). To date, we have trained 174 employees as

of July 2023. Over the next financial year we plan to train a

further 140 employees, which will deliver key target of 10%,

while allowing for staff turnover.

We continue to roll out our mental health awareness training,

which is mandatory for all people managers. We aim to

increase the number of employees receiving this training

to1 in 5 staff by July 2024. As at 31 July 2023, 309 employees,

10.4% for FY23, have been provided with awareness training.

We plan to provide awareness training to 230 employees in

the next financial year to achieve our target by July 2024.

Proactive remediation

In August 2022, Bellway established a new standalone

Building Safety division, which is dedicated to the remediation

of buildings identified during the review of our high-rise

portfolio, providing a full in-house capability in the delivery

ofremedial works.

In March 2023 Bellway signed the DLUHC Self Remediation

Terms (‘SRT’) in England, which converted the principles

of the building safety pledge signed in 2022, in which

we committed to resolve any historical fire remedial work

on buildings completed since 5 April 1992, into a binding

agreement between the Government and Bellway.

This was followed in May 2023, with the signature of the

Welsh Government’s Self Remediation Terms. This is a

commitment to remediate buildings over 11 metres in height

with identified life critical fire safety issues, which were

constructed in Wales since 5 April 1992.

The signing of the English and Welsh SRT’s provided

clarity forfuture remediation, particularly with regards to

the standards required for internal and external remedial

workson legacy buildings.

Bellway continue to engage with Scottish Government and

Homes for Scotland in developing the Scottish Accord, and

have agreed in principle to the intentions of the Accord.

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.

This programme has recently undergone a review and an up-

to-date training programme will be rolled out to all applicable

employees during FY24.

Bellway Health and Safety Awards

Following the success of the Bellway Health and Safety

Awards 2022, a recognition system has been developed to

continue to drive innovation and best practice, recognising

colleagues leading in this area. The Awards recognise the

best site in each region (four Regional Winners), with one

overall winner.

Better with Bellway Strategy and Priorities continued

Building Quality Homes, Safely continued

Team from Bellway Essex who won the Housing award for their

Sapphire Fields development.

Future KPIs

Greater engagement with on-site colleagues and

subcontractors on mental health awareness, by providing

workshops on every site once in the year to discuss key areas

such as suicide prevention, panic attacks and first aid.

Reduce the number of slips, trips and falls from a FY23

baseline of 113.

Increase the number of ‘near miss incidents’ reported from

aFY23 baseline of 403.

100% of divisions to be provided with customer care

maintenance operative training on health and safety subjects

such as documentation, dynamic risk assessments and safe

use ofladders.

Strategic Report

54 Bellway p.l.c. Annual Report and Accounts 2023

Target Progress Performance

Headline

75% of key 100 suppliers with GOLD Supply

Chain Sustainability School (‘SCSS’) membership

by July 2023.

Although missed, there has been strong progress

towards this target. Of the key 100 suppliers, 56% are Gold

members of the SCSS (2022 – 25%) and a further 19% are

either Silver or Bronze members.

Deliver a material reduction in single use plastic

packaging in our top 10 suppliers of 25% by

July 2023.

This target has been missed due to the challenge

ofobtaining accurate data from suppliers to evidence

the reduction in single use plastics used in packaging.

However, we have worked closely with the SCSS as

members of the packaging optimisation group and

have recently won an award for our engagement

ofoursuppliers in this area.

Introduce recycled paper and stationery across

the business by end of 2022.

Recycled paper and envelopes have been introduced

and all remaining stationery are ‘products with purpose’.

Review and trial new waste reduction

procedures in our supply chain by FY23.

Our work is ongoing with our supply chain partners

regarding best practice guidance and a waste awareness

campaign has been rolled out to divisions.

Sustainable Supply Chain

Driving sustainability through long-term partnerships

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

We continue to develop long-term partnerships with our

subcontractors and suppliers as an integral part of what

makes Bellway a success. 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.

Due to our strong relationships, we are able to work with the

supply chain to help achieve some of our sustainability goals

such as reducing packaging, in particular single use plastics,

reducing energy used in manufacturing and logistics.

For FY23, our supply chain spend was £2.1 billion

(2022–£1.8 billion), delivering a £1.9 billion investment in

the UK economy (based on the HBF estimating that 90%

ofhousebuilders’ supply chain spend remains in the UK).

Encouraging opportunities to learn

Bellway is a partner of the SCSS and sit on several of their

working groups. We encourage our Commercial teams to

increase their knowledge and learning in the form of ‘learning

pathways‘ toguide them to key topics relating to sustainability.

We encouraged our supply chain to engage with the SCSS

in 2022 but in 2023 set an expectation and public target

for at least 75% of our key 100 suppliers to achieve Gold

membership status. We fell short of our target for this financial

year, however, the momentum has significantly improved

our supply chain’s level of membership with 56% at Gold

level and 19% at either Silver or Bronze level, of which some

still have case studies to be reviewed by the school, to move

them up to Gold status.

We are leading the way for the large volume housebuilders

to target this level of membership, with more of our peers

becoming partners of the school, encouraging significant

engagement which will help us in upskilling our supply chain.

To keep the levels of membership, the supply chain members

must maintain a level of engagement with the school.

We 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. We have now extended this and are aiming to engage

with our top 50 suppliers in FY24.

Strategic Report

55Bellway p.l.c. Annual Report and Accounts 2023

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. From April 2022 we requested that our supply

chain use plastics with a minimum of 30% recycled content.

Since then, we have been working with suppliers and the

SCSS packaging optimisation group to remove plastics

altogether, or we look to use more recyclable alternatives

where available. Where plastics are currently unavoidable,

we are looking at standardising the types used to make it

easier to segregate and recycle. Many suppliers are now

moving to recycled cardboard as an alternative and switching

to higher recycled content plastics where there are no

current alternatives.

For a number of years, we have required all our timber

suppliers to ensure we are only provided with sustainable

timber. We previously undertook an audit of Group suppliers,

99.8% met our sustainability requirements of Forestry

Stewardship Council (‘FSC’), Programme for the Endorsement

of Forest Certification (‘PEFC’) or Category B standard. We plan

to expand this audit to divisional suppliers and subcontractors

in FY24.

Within our office environment, we continue to use recycled

paper and letterhead and have now added recycled paper

envelopes as standard. The remainder of our office supplies

are ‘products with purpose’. These are supplied through our

central office supply company and have been assessed as

both sustainable and ethical.

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. A new e-learning module in relation to Modern

Slavery was launched during the year, and additional content

provided to site staff via the toolbox talks. Through internal

reviews we deem that our subcontracted supply chain

contains the greatest potential risks of modern slavery.

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 the greatest number of subcontractors.

Bellway’s zero tolerance approach to bribery and

corruption is overseen 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 and in very limited

circumstances, sadly the behaviour of a few employees fell

short of the expected standards. Appropriate investigations

were conducted, and disciplinary action was taken

where necessary.

Future KPIs

Undertake discovery meetings with our top 50 suppliers on

joint sustainability and embodied carbon topics by the end

of2024.

Top 500 subcontractors that are registered with the supply

chain sustainability school (%) by July 2026.

Ensure that at least two Bellway employees in each division

have undertaken training with Supply Chain Sustainability

School by July 2024.

85% of 100 key suppliers to be Gold members of the Supply

Chain Sustainability School by July 2024.

Better with Bellway Strategy and Priorities continued

Sustainable Supply Chain continued

The Turner (left) and The Philosopher (right) showhomes at our

Ladden Garden Village development.

Strategic Report

56 Bellway p.l.c. Annual Report and Accounts 2023

Target Progress Performance

Headline

Reduce waste per completed unit by 20% by

July 2025 (achieving 7.1 tonnes of waste per

completed unit).

FY23 performance is at 8.6 tonnes (FY22 – 8.3 tonnes).

Achieve landfill diversion rate above 99% year-

on-year.

FY23 performance at 99.5% (FY22 – 99.5%).

Reduce construction site water usage (measured

in m

of water per 1000 m

of completed homes)

against a base year of FY21 by July 2025.

FY23 saw construction water usage fall 23.2% to

231.7 m

/1000 m

against the FY21 baseline set as

301.8 m

/1000 m

of completed homes.

20% of homes commenced by July 2024 to be

in timber frame.

Timber frame is utilised on all new developments in

our North East division and is being expanded to our

Durham and Yorkshire divisions. In FY23 11.4% of plots

were completed in timber frame (2022 – 8.0%).

Resource Efficiency

Designing out waste by building better

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 completed unit)

and, where waste is unavoidable, reuse and

recycle as much as possible. Our Better with

Bellway strategy will help us to achieve or surpass

our waste reduction goals in the years to come.

Reducing and reusing

We continue to undertake work with our supply chain

partners to address waste in the industry. We have targeted

packaging and have asked suppliers 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 year-on-

year drive on reuse, recycling and diversion processes on

our sites, with our FY23 diversion rate again above 90%, at

99.5% (2022– 99.5%). Our partnership with Community Wood

Recycling, a network of social enterprises that collects and

reuses waste wood, rescued 785 tonnes of wood from the

waste stream (FY22 – 854 tonnes).

We have continued our focus on reducing waste generated

on our construction sites. After successfully reducing waste

per unit to 8.3 tonnes last year, further improvement has

not been delivered in FY23 with a slight deterioration to

8.6 tonnes per completed unit in 2023. A renewed focus

will be given to reusing rubble waste on site in 2024 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 FY24.

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 determined our FY21 baseline water consumption

as 301.8m

per 1000m

of completed homes and we are

investigating ways in which we can reduce this usage

(against FY21) by 2025. In FY23 our water usage per 1000m

completed homes was 231.7m

. We have continued to adapt

the designs of our homes to be more water efficient and all

houses and apartments are now at or below the 110 litres per

person per day water standard.

Timber frame

We are continuing to expand our use of timber frame

construction methods. All new sites in our North East division

are now constructed with timber frame and we are expanding

this to cover new sites in our Durham and Yorkshire divisions.

Including our Scotland divisions, in FY23 a total of 1,247 plots

were constructed using timber frame, representing 11.4%

of our total output. Timber frame brings embodied carbon

benefits, and reduces reliance on traditional brick and block

construction methods, resulting in saving in materials.

Future KPIs

Establish a waste and resources working group in 2023, to

consider detailed guidance, waste league tables, induction

process for site teams and performance incentives.

Undertake three plot studies on waste generation and identify

opportunities to reduce in FY24.

Develop longer-term action plan to reduce waste at all stages

of our developments, full life cycle to include earthworks,

demolition materials, embodied waste in materials we buy,

packaging waste and construction waste on site by July 2026.

Strategic Report

57Bellway p.l.c. Annual Report and Accounts 2023

Target Progress Performance

Headline

Achieve 10% Biodiversity Net Gain (‘BNG’) on

all new sites submitted for planning from 1 July

2023 onwards.

Our Strategic Land teams have completed a review on

existing and future sites, established BNG protocols and

100% of sites that were submitted for planning permission

from July 2023 were 10% BNG compliant.

Establish a partnership arrangement with a

nature organisation in FY23.

During the year we began to investigate opportunities

and we will continue to do so in FY24.

Plant 10 additional Tiny Forests across divisions

in 2023.

Four additional Tiny Forests are planned in 2024, these

had been delayed by planning permission.

All new development sites to incorporate

hedgehog highways by July 2023.

During FY23 we implemented in excess of 1,300

hedgehog highways across our developments.

Investigate a tree planting programme for every

home sold by July 2023.

We are working with consultants and third-party

organisations to understand the best way to deliver this,

in conjunction with net gain requirements. This will form

part of a new target from FY25.

Biodiversity

Protecting and preserving nature

On each of our developments, we aim to apply

the key principles of the mitigation hierarchy.

We therefore look to avoid, minimise and

then where necessary mitigate our impact on

the natural environment through a range of

actions, including flood impact assessments,

understandinggained through 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 31.1% of our new homes in 2023 on brownfield

sites (2022 – 39.3%), 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 253 of our developments (2022 – 255),

mimicking natural drainage processes to reduce flooding

and pollution whilst also providing habitats for wildlife

through careful habitat design and management. In addition,

146developments included a biodiversity plan (2022 – 137)

and we planted 15,023 trees (2022 – 15,800).

BNG is a statutory planning obligation that requires

housebuilders to leave the biodiversity of land used for

development in a measurably better state. The legislation

requires that this betterment is an increase of at least

10% compared to the baseline prior to development.

This requirement will come into effect for all new planning

applications submitted from January 2024, but at Bellway

we have committed to ensure that all planning applications

submitted from July 2023 onwards are 10% BNG compliant.

This is a significant development for Bellway and our strategic

land teams have already been formulating our strategies to

meet this requirement. This includes a review of opportunities

on existing land and future development sites. We have

established a biodiversity baseline for all existing Bellway

owned land and in September 2022 we appointed a Group

Head of Biodiversity who now leads on all biodiversity

related activity. BNG champions have been appointed in

each division and we have established BNG protocols for

site acquisitions and management. 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 units from third parties where other delivery

options have been exhausted.

Better with Bellway Strategy and Priorities continued

Strategic Report

58 Bellway p.l.c. Annual Report and Accounts 2023

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 have also incorporated hedgehog highways into our new

developments from 31 January 2023. The creation of new

housing provides a potential barrier to hedgehogs as they

move around looking for food. This can in some circumstances

force them closer to roads and an increased risk of being

affected by traffic. Bellway has implemented in excess of 1,300

hedgehog ‘highways’ across our developments to help to

overcome this issue and allow hedgehogs to safely travel across

our developments, from garden to garden. The presence of

hedgehogs is a good indicator of general biological health,

andthey also help to maintain a healthy ecosystem as

they work to control insect populations, including keeping

gardens healthy.

Partnership working

Better with Bellway underpins our ambition to be a sector

leader from biodiversity. A key principle within this ambition

is to ensure that all developments leave biodiversity in a

measurably better state once a development is complete.

As part of this ambition, we intend to support each new

household in ‘making a space for nature’. This concept will

build on the biodiversity provision already provided in the

welcome pack and allows each customer to fully engage

with the potential for their gardens and green space areas to

deliver for biodiversity.

Bellway will look to establish a new partnership with a

conservation-based organisation to benefit from their

knowledge and skills. This will help build our biodiversity

ambition by providing our customers with the right ideas

andresources to make a genuine difference to biodiversity.

Creating habitats for over 500 animal and plant

species with Tiny Forests

Last year, volunteers from the Group office teamed up

with Earthwatch to create a ‘Tiny Forest’ on land we own

in Ponteland, Northumberland. 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 research benefits

in the fight against climate change.

The Tiny Forest 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.

We have continued to work closely with Earth Watch and our

local Divisions to identify suitable and deliverable locations

for further Tiny Forest sites. Market factors, delays associated

with the planning process and the requirement to integrate

these with the core planting period have combined to restrict

progress on this target in FY23, however at least four further

Tiny Forest sites will be in place by the end of FY24.

Future KPIs

Work with an appropriate conservation partner to ensure

that the mowing regimes implemented on all new Bellway

developments are designed to be beneficial to invertebrates

during the summer growing period.

Work with our conservation partner to support each new

Bellway customer in creating a ‘space for nature’ in the

gardens of their new homes.

Create a new community woodland to benefit both

communities and biodiversity as part of every new Bellway

planning application.

Investigate the potential to utilise existing Bellway land to

deliver a range of secondary ‘stacked’ eco-system services

to benefit the environment and complement our broader

sustainability and biodiversity aims in 2024. This will include

renewable energy, nutrient mitigation and biodiversity net

gains delivery.

Team from our Bellway Group office volunteering at our Tiny Forest

planted in Ponteland, Northumberland.

Strategic Report

59Bellway p.l.c. Annual Report and Accounts 2023

Target Progress Performance

Headline

Raise £3m for Cancer Research UK by the end

of December 2023.

£580,048 raised and donated in 2023, bringing our total

to date to £3.14 million.

All office based staff to be given the opportunity

to complete a volunteering day by July 2023.

This year saw the launch of our new Volunteering

Policy which gives employees the opportunity to use

one working day to volunteer to local charities and/or

community groups.

Establish at least one partnership with a charity

supporting disability/disadvantaged individuals

with a view of providing work placements by

July 2023.

This year we have established three new partnerships

with Change 100, The Percy Hedley Foundation

and Azure.

Charitable Engagement

Giving, to build better lives

At Bellway, we are committed to building strong

relationships within our communities and

continue to support local and national charities.

Charitable engagement is a key part of the Bellway

ethos, and we are proud of our work so far.

Our commitment to helping others will continue

to grow, as part of the Better with Bellway

strategy we encourage employees to take part

in fundraising and volunteering for local charities

and our national charity partner Cancer Research

UK(CRUK).

Maintaining key partnerships

CRUK has been Bellway’s national charity partner since

2016 and our relationship continues to go from strength to

strength. We recently extended the partnership for a further

18 months until the end of 2024. We are proud to have met

our ‘£3m for 2023’ target early, raising over £3 million for CRUK

since the partnership was established, which would not have

been achieved without the dedication from our employees,

suppliers, and subcontractors. We look forward to continuing

the partnership with the aim of increasing our fundraising and

donation total for CRUK to £4 million by the end of 2024.

Engagement with employees, subcontractors and suppliers

has remained strong this financial year. We saw a slight

decrease in fundraising, however the determination and

enthusiasm remained high across the Group. In total FY23 has

seen £580,048 (2022 – £607,898) raised and donated to CRUK.

£140,295 has been raised by employees (2022 – £130,829)

with another £157,084 from subcontractors and suppliers

(2022 –£168,442), Bellway’s double matching of employee

fundraising added a further £282,669 (2022 – £308,848).

This brings our seven-year total to £3.14 million.

This year saw the re-launch of our ‘Donation Station’ initiative

in January across our 23 operating divisions and Head Office.

By donating clothes, homeware, books and other items to

CRUK which can be sold in shops, we were able to support

CRUK by donating 689 bags equivalent to a monetary value

of £15,709 which was double matched by Bellway, bringing

the total raised to £47,127.

CRUK is not the sole focus of our charitable engagement, and

we continue to support a range of local charities, causes and

community groups in the communities where we develop,

including corporate donations and employees fundraising for

causes close to their hearts. Non-CRUK employee fundraising

came to £95,312 this year, with Bellway ‘matching’ employees’

fundraising efforts. This includes payroll giving for which

we introduced matching for last year. In total, across all our

charitable activities, Bellway, our employees, subcontractors,

and suppliers have raised and donated a total of £799,978

(2022– £899,467) of which £364,744 was raised by our

employees, subcontractors, and suppliers, (2022– £422,816).

Volunteering Policy

We are proud to have implemented our new employee

Volunteering Policy which took effect on 1 July 2023,

whileBellway staff have often undertaken volunteering on

an informal ad-hoc basis, we have decided to formalise

arrangements and staff now have the opportunity

to participate in one volunteering day per year.

Volunteering offers additional routes for employees’ personal

and professional development and enables Bellway to share

our skills and knowledge to help create better communities

where we live and work. We are excited to offer this

opportunity and aim to promote volunteering opportunities

across the Group and donate 4,000 hours of employees paid

working hours to local and national charities by July 2026.

We will continue to investigate and find opportunities for

our employees to participate in on a national and local level,

which will be promoted across the Group.

Better with Bellway Strategy and Priorities

Strategic Report

60 Bellway p.l.c. Annual Report and Accounts 2023

Homelessness support

This year, we continued our partnership with Greater

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.

This year we donated £10,000 to Greater Change. Since our

partnership began last year, we have donated £34,000 in

total. This partnership is still in early stages, but the donations

have already brought real, tangible benefits to people’s lives.

Our recent donation in FY22/23 supported ten of Greater

Change’s clients out of homelessness and into long-term

stability. One of the clients, who was helped with Bellway’s

donation, was a 30-year-old woman living in an emergency

hostel. She has now started an apprenticeship and

successfully passed her Level 3 maths and English exams.

In addition to the Greater Change partnership, some of

our divisions have supported Emmaus UK, who support

people to work their way out of homelessness. They provide

meaningful work, training, and a stable home for as long as

someone needs it, by donating money and fundraising for

the cause.

Establishing new partnerships

This year we established three new partnerships with charities

supporting disability or disadvantaged individuals with a view

of providing work placements. We are currently hosting two

summer internships for graduates with disabilities as part of

the Change 100 initiative. The Leonard Cheshire’s flagship

programme which aims to kickstart the careers of ambitious

disabled university students and graduates, and provide

support through the graduate assessment process.

The Percy Hedley Foundation, a local disability charity based

in Newcastle upon Tyne, that supports people with complex

learning difficulties, disabilities, and additional communication

needs, recently attended our Group Head Office to undertake

an accessibility audit. They have made some useful

recommendations for us to follow to ensure that we are

able to host future work placements for a broad spectrum of

disabled individuals. Members of the HR teams supported by

hosting an employability session at one of their campuses to

help with CV writing and interview tips. We also sponsored a

vocational award for students of Percy Hedley at their annual

ceremony in July.

A group from our 2022 Graduate cohort also supported,

Azure, a charitable organisation dedicated to enhancing

lives of those who are disabled or disadvantaged, on a

project entitled ‘how can we actively encourage more

people with disabilities to pursue a career in construction

and housebuilding’. The Group carried out research with

a specific focus on the recruitment process and made

recommendations that Bellway can make internally, and that

Azure can use.

We are now working to identify a suitable national partnership

to broaden our capacity to offer work placements across

the Group.

Future KPIs

Raise £4m for Cancer Research UK by December 2024.

Promote volunteering within Bellway to benefit local charities

and good causes, donating 4,000 hours of employee time to

charities/good causes by July 2026.

Bellway Wales completing a walk across the Severn Bridge to raise

funds for Cancer Research UK.

Strategic Report

61Bellway p.l.c. Annual Report and Accounts 2023

By ‘Giving to Build Better Lives’, Bellway

allows us to continue making discoveries,

driving progress and bringing hope,

sothat we can bring about a world where

everybody can live longer, better lives,

freefrom the fear of cancer.”

Stephanie Parsons

Account Manager – Cancer Research UK

Our ground-

breaking charity

partnership with

Cancer Research UK

Charitable giving is central to our ethos.

Each year, Bellway recognises the valuable

efforts of employees in supporting

important charities and causes by matching

or topping up their fundraising, this is

commonly known as ‘matched giving’.

At Bellway we are invested in supporting

employee commitment to helping

Cancer Research UK and encourage staff

participation by launching double-matched

funding. This means that for every £1 a

Bellway employee raises, Bellway will

contribute an additional £2.

This is a huge incentive for employees,

and this year we received a Better Society

award in recognition of the scheme.

Colleagues from

Bellway Yorkshire

completing the

‘Yorkshire 3

Peaks’ Challenge

raising over

£8,000 for Cancer

ResearchUK.

Supporting better

charitable giving

Better with Bellway Strategy and Priorities

Charitable Engagement continued

Strategic Report

62 Bellway p.l.c. Annual Report and Accounts 2023

Section 172 Statement

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 the

members as a whole, 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,

suppliers, customers and others,

Board Report Strategic planning and direction of culture

The Board receives detailed reports and in-person

updates from senior management, which they query,

challenge, and debate, to ensure conflicting views are

carefully considered. Updates on the progress and

decision implementation are also provided, to allow the

Board to review and alter where appropriate, as situations

(and stakeholder priorities) evolve.

The Board is responsible for setting the strategic direction,

values and culture of the Company. It sets the tone of how

business is done throughout Bellway and has embedded

expectations that stakeholder considerations are important

to decision-making at all levels of the organisation.

Further information can be found in Our Strategy (pages 16

and 17) and within the Better with Bellway section (pages 38

to 62).

Diverse set of skills, knowledge, and experience Board Discussion

The Board has a wide range of experience and expertise

which is vital to making informed decisions and

promoting the success of the Company in the long-

term, whilst considering the likely consequences of any

decision and the needs of stakeholders.

Further details on pages 102 and 103 in the Board of

Directors and Group General Counsel and Company

Secretary section.

All directors are expected to engage, contribute, and

constructively challenge discussions, while also offering

adiffering perspective.

Further information can be found in the Division of

Responsibilities and Board Evaluation sections on pages

107 to 110 and page 111 respectively.

S.172 Factor Further Information Can Be Found

(a) The likely consequences of any decision

in the long-term.

• Our Business Model – Pages 18 to 23.

• Better with Bellway – Pages 38 to 62.

• Key Stakeholder Relationships – Pages 64 to 74.

• Chair’s Statement – Pages 28 and 29.

• Principal Risks – Pages 79 to 83.

(b) The interests of the Group’s employees. • Better with Bellway – Pages 38 to 62.

• Key Stakeholder Relationships – Pages 64 to 74.

• Nomination Committee Report – Pages 112 and 113.

with suppliers, customers and others.

• Better with Bellway – Pages 38 to 62.

• Key Stakeholder Relationships – Pages 64 to 74.

• Our Business Model – Pages 18 to 23.

(d) The impact of the Group’s operations on the

community and the environment.

• Better with Bellway – Pages 38 to 62.

• Key Stakeholder Relationships – Pages 64 to 74.

• Our Business Model – Pages 18 to 23.

(e) The desirability of the Group maintaining a reputation

for high standards of business conduct.

• Our Business Model – Pages 18 to 23.

• Who We Are – Pages 6 to 9.

• Better with Bellway – Pages 38 to 62.

• Our Strategy – Pages 16 and 17.

• Audit Committee Report – Pages 114 to 125.

(f) The need to act fairly between members of the Group. • Key Stakeholder Relationships – Pages 64 to 74.

• Our Strategy – Pages 16 and 17.

• Remuneration Report – Pages 126 to 145.

(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.

The following page compromises the Group’s Section 172

Statement and how the Board has fulfilled its duties to have

regards to the above and where to find further information

regarding each factor in this report.

How our Directors fulfil their S.172 duty under the Companies Act 2006:

Strategic Report

63Bellway p.l.c. Annual Report and Accounts 2023

Key Stakeholder Relationships

Better with Bellway

Our Better with Bellway sustainability strategy (see pages

38 to 62), is a key element of our overall business strategy

and considers many of our key stakeholders. The strategy

has been developed with the involvement of key business

functions and received significant Board engagement in its

development, approval and ongoing oversight.

As a result, the development and ongoing delivery of this

strategy has received Board attention throughout the year

with key activities falling under this strategy being approved

and supported by the Board.

Our key stakeholders play a vital role in the development,

implementation and success of Better with Bellway with

all key stakeholders being engaged both directly and

indirectly as a result, including:

Customers

See pages 64 to 66.

Employees

See pages 66 to 68.

Investors, Analysts and Advisors

See pages 68 and 69.

Partners and Supply Chain

See pages 69 and 70.

Local Communities and the Environment

See pages 71 and 72.

Government and Regulators

See pages 73 and 74.

Maintaining good relationships

with our stakeholders is

important to what we do

During the period, we have taken the opportunity to

proactively engage key stakeholders in ensuring our

strategy is understood and help demonstrate how Bellway’s

commitment to sustainability is being delivered through

everything we do day-to-day in running the business.

Stakeholder engagement

Stakeholder engagement is important for our business as it

helps inform our Board decision-making and ensures we

consider the impact of those decisions on key stakeholders.

These decisions can impact stakeholders collectively or

individually, which means we have to consider the differing

outcomes across all stakeholder groups.

Customers

How Customers link to our strategic priorities

Customers & Communities

See pages 43 and 44.

Building Quality Homes, Safely

See pages 53 and 54.

Why we engage

We place customers at the heart of our business as without

them we could not operate. The changing consumer

landscape, with inflationary pressures, falling consumer

confidence and rising lending rates, all meaning it is more

important than ever to consider our customers in our decision

making, by understanding the challenges they currently

face and how we can adapt our product offering to suit

their requirements.

How we engage

Bellway’s reputation for excellent customer service and high-

quality build means we place a strong emphasis on customer

experience at every stage of the customer journey.

Our digital channels are the starting point for many when

buying a new home and we have enhanced our digital

offering to improve the experience potential customers

have when searching for a new home. Our aim is to provide

detailed information about the houses and apartments we

build and provide additional information on the customer

journey and what to expect before setting foot in our

sales offices.

The use of our social media channels and website content

continues to engage customers using aspirational content

and customer case studies. This is particularly helpful as it

allows us to engage customers during the period between

reservation and completion where we can provide content

which is helpful when moving into their new home.

Our face-to-face sales approach, through our dedicated

andhighly trained sales teams, remains our strength as we

help customers navigate the experience of buying a new

home. Our teams are there to make the process of buying

runas smoothly as possible.

The Customer First programme, designed to support

consistent build quality and the experience customers

receive, has continued to provide enhancement to the

customer journey throughout the year, with the introduction

of some key initiatives designed to help customers

Strategic Report

64 Bellway p.l.c. Annual Report and Accounts 2023

understand the product we build and meet the teams who

are responsible for delivery of their new home. Our digital

transformation has seen the introduction of ‘Your Bellway’,

anonline customer portal which is designed to keep

customers fully informed of the sales and build progress of

their home. We continue to enhance this portal to improve

the experience of our customers.

Once customers move into their new home, they are

supported by our dedicated Customer Care teams, who are

there to address any post-completion issues that may arise.

To maintain our strong customer service experience,

weencourage feedback throughout the sales process via

Trustpilot and HBF Customer Satisfaction surveys. The Board

places significant emphasis on the importance of this

feedback, with eight-week and nine-month post-completion

HBF scores being reported to the Board on a regular basis.

Through our marketing activities we engage with prospective

customers through our targeted approach, using data to

ensure we are responding to their needs accordingly.

The New Homes Quality Board (‘NHQB’) introduced the

New Homes Quality Code (‘NHQC’), the new industry code

of practice in December 2021. Bellway registered with the

NHQB in October 2022 and signed up to the New Homes

Ombudsman Service. The NHQC is intended to consolidate

and improve upon the existing protections that are available

to purchasers of new build homes and it will reinforce

several of the Group’s existing practices, including our

comprehensive after-sales service.

Our ‘Better with Bellway’ sustainability strategy allows us to

communicate with customers in a more engaging way on

how they live in their new homes. The move to Future Home

Standards from 2025 means that we must bring customers

on the journey to a low-carbon home. To this end, our Future

Home at Energy House 2.0, a unique carbon reduction

research project with The University of Salford, provides us

with a strong opportunity to use peer reviewed research to

educate customers on the benefits and challenges of the

newtechnologies that will replace gas heating.

Our Building Safety division, set up in response to changing

building safety legislation post-Grenfell, continues to

engage customers who live in legacy Bellway apartments,

where historical issues have been identified. We continue

to communicate with leaseholders and residents on those

developments, through dedicated websites and resident

portals, regular communications directly with residents or

through Resident Liaison Officers or Managing Agents where

active remediation is underway.

Board level engagement

The Board places significant emphasis on the importance of

the HBF Customer Satisfaction survey scores, with eight-week

and nine-month post-completion HBF scores being reported

to the Board on a regular basis. The focus of the Board on

improving our nine-month scores has been a key part of our

Customer First programme and Better with Bellway strategy.

The Board regularly discusses customer-related projects such

as Customer First, Customer Care scores and innovation

relating to our Better with Bellway activities.

Shalini and Pradeep with their daughter outside their new home.

Issues raised as a result of engagement

• Customer service

• Digital adoption

• Sustainability and energy efficiency of homes

• Build quality

• Innovation

• Legacy building safety improvements

Engagement outcomes

Our focus on providing high-quality homes and service for

our customers has resulted in Bellway being recognised as

a5-star

homebuilder for the seventh consecutive year.

9 out of 10 customers would recommend Bellway to a friend

with 91.1% in the Recommend a Friend category

HBF Customer Satisfaction Survey scheme: ‘Recommend a Friend’

category

91.1%

(2022: 93.6%)

We have also made enhancements to our telephony

operations for customer care, increasing accessibility to our

teams and are making enhancements to our reporting and

defect rectification with the implementation of software for site

managers to monitor and track activity on developments.

Enhancements to our digital channels has led to

improvements in the customer journey. We have reacted to

the current challenges being faced by consumers, due to the

rising cost of energy, to highlight the potential cost-savings

that can be made from moving into a new build property

versus an older home. The digital transformation of our

business is reflected in the digitisation of our ‘traditional’ sales

channel with the introduction of our first digital sales office in

Ryton in the North East.

Strategic Report

65Bellway p.l.c. Annual Report and Accounts 2023

‘Your Bellway’, our online customer portal, has been rolled

out across 21 divisions and is now being used by over 1,460

customers and we are continually rolling this project out on

new developments.

Our Customer First project has implemented three key

customer initiatives: Meet the Builder, Pre-plaster visits and

House to Home – all receiving positive customer feedback.

Meet the Builder is designed to provide reassurance to

customers by introducing them to the site team who is

responsible for the development of their home. Pre-plaster

visits give customers the opportunity to visit their home and

see it in first fix stage while the newly implemented House to

Home offers customers the opportunity to see a home on

site at various stages of completion. This allows us to highlight

the construction processes, demonstrate the complexity of

building houses, and educate customers on key aspects

of their home, they would not normally see. For example,

beingable to see where pipework and electric cables run,

prevents customer care issues down the line caused by

accidentally drilling through those services. Our first House

to Home has been developed by our East Midlands division,

and following customer feedback, it will now be implemented

on sites across the Group.

Our ‘Better with Bellway’ sustainability strategy has also led

to greater engagement with customers on sustainability

matters. The green welcome packs for new homeowners,

and children’s activity books on sustainability, introduced

in 2022 continue to be well received. With the rising cost of

energy bills, our Future Home project at The University of

Salford is being used to drive customer education relating

to new low-carbon technologies which will be introduced

into our homes. We have already started to roll out customer

education on the introduction of Air Source Heat Pumps

for example. Our Future Homes projects have also been

extended to our current build programme, with four future

homes being built in Callerton, Northumberland, which have

been sold on the open market. We will use the feedback from

customers to inform our plans for further roll out of homes

that meet Future Home Standards from 2025.

Impact on Board decision-making

The Board is fully engaged in driving up quality and customer

service scores and has been supportive in all of the customer

facing initiatives that have been introduced as part of our

Customer First programme, our digital transformation projects

and other key Customer Care enhancements designed to

improve our overall customer experience.

Employees

How our Employees link to our strategic priorities

Employer of Choice

See pages 46 and 47.

Why we engage

Our ambition to be an Employer of Choice is driven by our

desire to create a safe, diverse and inclusive environment

which ensures we recognise our colleagues and help them

develop and thrive within our business and play an active

role in its success. It is important that we engage with our

colleagues to ensure we understand what is important

to them and this helps shape our decision-making at

board-level.

How we engage

Our ongoing engagement activities encourage our colleagues

to provide feedback on what is important to them and

highlight the issues that impact them in their roles. Our main

engagement tool is our annual Employee Engagement

Survey, which this year ran in June 2023, asking for feedback

from all of our colleagues.

As well as the annual Employee Engagement Survey, we also

hold regular Employee Listening Group sessions which allow

colleagues to share their views on a variety of subjects relating

to their roles and working for Bellway. We have used this

feedback to formulate and develop our ‘Employer of Choice’

flagship business priority area under our Better with Bellway

sustainability strategy.

We also engage colleagues through regular internal

communications activity to ensure colleagues are kept

informed of ongoing business announcements and updates,

as well as changes and enhancements to policies and

procedures which impact them directly.

Our priority to create a diverse workforce includes the

creation of the Balance Network, our diversity and inclusion

working group, which receives board level sponsorship and

is attended by a diverse group of colleagues from across

the Group.

We have also recently launched an Early Careers Network

aimed at engaging in meaningful dialogue regarding barriers

or challenges encountered in coming into the construction

industry, or Bellway specifically, with a view to establishing

proactive solutions to improve accessibility for a diverse range

of individuals and alleviate the sector-wide skills gap.

Key Stakeholder Relationships continued

Strategic Report

66 Bellway p.l.c. Annual Report and Accounts 2023

Sales Advisors from Bellway Kent with our mascot Bella supporting

the local athletics event Medway Mile.

Board level engagement

The Board has been actively involved in the development

and ongoing board level discussions about becoming

an Employer of Choice and has supported our Senior

Management teams in delivering this flagship priority for

the business.

As part of our Better with Bellway reporting activity, our key

target achievements are reported to the Board and ongoing

strategic priorities are discussed at board level ensuring buy-

in for the majority of key projects to support our objectives.

Our Chief Executive and Executive Board members regularly

visit our divisions and undertake site visits where they meet

with colleagues and can see our operations first hand.

The Non-Executive Directors attend one Listening Group

each year to gain a better understanding of what is on our

colleagues’ minds. The outcomes of this are then discussed

atBoard level. The Employee Listening Group is our method

for workforce engagement in line with the requirements of

the Code.

Each Non-Executive Director also visits a division separately

for a day as well as joining the Board on more formal

divisional and site visits.

Issues raised as a result of engagement

• Health, safety and wellbeing

• Flexible and agile working

• Diversity and inclusion

• Pay and benefits

• Training and development

• Career progression

• Succession planning

• Work life balance

• Internal communications transformation

Engagement outcomes

The latest Employee Engagement Survey undertaken in June

2023 received a strong 69% (2022 – 74%) response rate.

Employee Engagement Survey response rate

69%

(2022 – 74%)

Colleagues who would recommend Bellway

as ‘a great place to work’

89%

(2022 – 95%)

During the past year, improvements identified as a result of

our 2022 survey have been implemented and have been fully

supported by the Board, including enhancements to our agile

working arrangements.

Bellway has been awarded full accreditation as a Living

Wage Employer, which covers both directly employed and

subcontracted staff, and this has been achieved well ahead

of our July 2024 target. A standard, consistent induction

and onboarding process is also being introduced for all

new starters at Bellway and we have seen an encouraging

reduction in voluntary staff turnover during the past

12 months.

The Group has several initiatives in place to promote

inclusion and to improve ethnic and gender diversity and,

together with a range of opportunities for career progression

we are focusing on ensuring our colleagues are supported to

thrive in their roles and progress their career ambitions with

the Group.

Our focus on mental health awareness, one of our key

‘Employer of Choice’ targets, has led to a mandatory training

programme being developed for all people managers. As at

31 July 2023, 309 employees have attended mental health

awareness training, which equates to 10.4% of the workforce

(target 20% by July 2024). We have also recruited and trained

174 mental health first aid advocates, which equates to 5.8%

of the workforce as we aim to reach the target of 10% by July

2024. Of the mental health first aid advocates trained, 47% are

site based and 53% are office based.

Following on from our Senior Leadership Management

Programme introduced in 2022, we have also introduced a

new Middle-Managers Management Programme, launchedin

autumn 2022, which is designed to identify and upskill the

future leaders of our business.

Strategic Report

67Bellway p.l.c. Annual Report and Accounts 2023

Linked to this, we have launched a sponsorship programme

to support the progression of females into senior leadership

roles. Six female middle managers, currently on our Elevate

Programme, and from a range of disciplines, have been

identified to take part in the first programme. They have been

matched with a senior leader from Group and they will work

together for six to nine months to support their progression,

which ultimately may result in a promotion.

In addition, our Women into Housebuilding Programme has

successfully recruited its first Trainee Assistant Site Manager

and the latest cohort will see the introduction of a further five

females into the programme in the new financial year.

Our focus on early careers continues with 12 graduates recruited

on to our Graduate Programme during 2023, with roles across

the business. Our Apprenticeship Programme for 2023 recruited

30 apprentices to the business.

Our focus on diversity and inclusion has led to us linking up

with Leonard Cheshire’s Change 100 programme, whichlooks

to help university students and recent graduates with disabilities

or long-term conditions, gain experience ofthe workplace.

An important part of how we become an Employer of

Choice includes how we communicate with our colleagues.

The Board has supported an internal communications

transformation project, which will see the launch of a new

Employee Engagement App and front-end Intranet which

is designed to improve communications, and encourage

ongoing two-way dialogue with colleagues, providing us

theopportunity to solicit real-time feedback.

Impact on Board decision-making

With Employer of Choice being a flagship business priority,

the Board has invested significant time focusing on the results

of our Employee Engagement Survey and ongoing feedback

from Listening Groups. Our Group HR Director presented

to the Board during the year on key initiatives relating to

the strategy, which has received ongoing Board scrutiny

and support.

The results of our June 2023 Employee Engagement Survey

were presented to the Board in September 2023, and the

outcomes from the survey are leading to the development

of further outcomes which are the result of feedback from

our colleagues.

Street scene from our Holbrook Park development, Derbyshire.

Investors, Analysts

and Advisors

How our Investors link to our strategic priorities

Better with Bellway

See page 38 to 62.

Why 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 business performance and strategy.

This supports ongoing confidence and trust in the business

and allows well-informed investment decisions to be made.

How we engage

As part of our ongoing financial calendar activities, we engage

with investors around our interim and preliminary results

announcements and regular trading updates throughout

thefinancial year.

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 timely updates on the progress of the business

and allows them to share any feedback.

In addition to regular financial announcements, we use

traditional media channels to inform a wider audience of our

key business performance messages. We also engage with

our colleagues through our internal communications activity

to inform them of key financial announcements as many hold

an investment interest in the business.

Our Better with Bellway sustainability strategy has provided

further opportunities to engage with investors on the eight

business priorities within the strategy, which are focused

on people and the planet. The strategy includes ambitious

targets to significantly reduce carbon emissions and our

communications have helped investors to better understand

the changing landscape of the housebuilding industry as we

evolve our product and business practices.

We have provided regular updates on the remediation of

legacy developments relating to building safety as part of

our commitment under the Self-Remediation Terms (‘SRT’)

agreed with The Department for Levelling Up, Housing and

Communities (‘DLUHC’) during the year.

Board level engagement

The Board has engaged in a number of set piece events over

and above the standard financial calendar during the year.

In September 2022 the Board hosted a ‘Meet the Team’ event

at our development in Great Dunmow, Essex, whereattendees

met with the Executive team and regional and local colleagues

from a wide range of disciplines across the business. Following a

period of virtual meetings during COVID-19, the event enabled

the Group to showcase the Better with Bellway strategy and re-

engage, in person, with institutional investors, analysts and other

key stakeholders.

Key Stakeholder Relationships continued

Strategic Report

68 Bellway p.l.c. Annual Report and Accounts 2023

In May 2023, the Board and senior management team hosted

an investor and analyst event at our Future Home at the

Energy House 2.0 research project at The University of Salford.

This flagship project will play a key role in accelerating the

progress towards low carbon and net zero housing design.

The event was hosted alongside Barratt Developments and

Saint Gobain, who we have been collaborating with on this

unique industry initiative.

Our AGM will be held 15 December 2023 and our Board will

be available to answer any questions in this forum.

The Board has also undertaken a review of our external

corporate advisors with a view to providing an increased

engagement programme with our investors, the media,

andpolitical stakeholders.

Issues raised as a result of engagement

• Environment, social and governance (‘ESG’)

• Remuneration policies

• Market conditions e.g. mortgage market, supply and

labour supply chain, impact of economic uncertainty,

affordability, and land market

• Capital allocation and dividend policy

• Customer care and build quality

• Building safety Self-Remediation Terms

• Future Homes Standard

• Diversity and Inclusion

• Carbon reduction strategy

• Impact of Government policies on housebuilding

Engagement outcomes

Engagement around our interim and preliminary results and

trading updates allows us to communicate our strategy to

investors and analysts and has helped maintain Bellway’s

reputation for having a strong management team. We are

able to use shareholder feedback from these announcements

to formulate our positioning for future announcements

and ensure we are meeting the needs and expectations

of investors.

Our proactive communication in relation to our Better with

Bellway strategy has led to positive engagement with our

investors, analysts and advisors. As a result, they have gained

a greater understanding of our business priorities, challenges

and opportunities as we work towards the Better with

Bellway targets and KPIs, which are aligned to the underlying

operations of the business.

Impact on Board decision-making

The Board considers the impact decision-making has on

shareholders and the wider investment community.

We have utilised our Better with Bellway sustainability strategy

to proactively engage with our investors with feedback being

usedto shape Board decision-making.

The Board approved a return of capital of £100 million to

shareholders through the implementation of a share buyback

programme of which the first tranche was completed in June

2023 at a cost of c. £50m, immediately followed by the start of

the second tranche.

Partners and Supply Chain

How our Partners and Suppliers link to our

strategic priorities

Carbon Reduction

See pages 49 to 52.

Building Quality Homes, Safely

See pages 53 and 54.

Sustainable Supply Chains

See pages 55 and 56.

Resource Efficiency

See page 57.

Why we engage

Due to the size and scale of our operations, our relationship

with our partners is vitally important. We pride ourselves on

having strong long-term sustainable relationships with our key

partners and suppliers which helps us navigate some of the

supply chain and inflationary pressures being faced by the

industry post pandemic.

Additionally, our Better with Bellway sustainability strategy

relies on significant collaboration with our key partners

aswework together on achieving our goals.

How we engage

Our Group Commercial teams have close working

relationships with all of our key partners and our divisional

teams also work closely with our partners and subcontractors

at a regional level.

We aim to source all of our products and services in a

sustainable and ethical manner (see Sustainable Supply Chain

on pages 55 and 56). It is important that we work closely with

our partners to ensure this is achieved and use our influence

for positive change within the industry and its supply chain.

Our industry leading Carbon Reduction targets mean that we

must work with our partners to reduce the embodied carbon

in our supply chain.

Our long-term working relationships with reputable

subcontractors ensures that we can maintain the availability

and quality of materials and labour.

The health and safety of our colleagues, subcontractors

and customers on our sites is one of our main priorities and

our safety first approach ensures that any risks are identified

and addressed.

The success of our business relies on working closely with

public bodies and a range of national and local agencies

toaid the delivery of our developments across the country.

Strategic Report

69Bellway p.l.c. Annual Report and Accounts 2023

Jamie Bursnell, Technical and Innovations Manager with the sales

team next to the Google bus.

We are able to provide affordable homes through our long-

established relationships with Housing Associations, on a

national and local level. This ensures the delivery of more

affordable homes on our developments.

Our Group Strategic Land team collaborate with landowners,

business partners, and the public sector to acquire land

opportunities. Regardless of their current planning status,

sitesare taken into consideration subject to our defined

approval process and hurdle rates.

Our divisional teams are very knowledgeable about regional

planning frameworks and policies. This knowledge is crucial

for steering sites through the planning system.

We also participate in joint venture and partnership agreements

with public and private sector partners.

To manage remediation projects that fall under the

government’s pledge on building safety, we collaborate

withfire safety engineers and specialised subcontractors.

Board level engagement

The Board is fully engaged in oversight of our sustainability,

supply chain and health and safety issues with regular

reporting to the Board.

Our Commercial and Technical teams provide ongoing Board

updates on key partner issues and Board approval is required

for key decision-making.

Our Better with Bellway targets across all of our eight business

priority areas are all reported to the Board and these are

updated on a regular basis with Board approval.

Issues raised as a result of engagement

• Supply chain demand and price inflation

• Labour shortage

• Health and safety

• Land and planning

• Sustainability

Engagement outcomes

Our ability to effectively manage the ongoing challenges

facing the industry as a result of the COVID-19 pandemic,

post-Brexit issues, inflationary pressures and the war in

Ukraine, which is still leading to global shortages in supply

chains and labour and rising costs, has been facilitated

by our solid personal relationships with key suppliers and

subcontractors. Due to the close collaboration between

our Group Commercial teams and our supply chain

partners, we have been able to jointly resolve the majority

of supply-related issues through more efficient planning

and communication.

The long-term relationships benefit our partners as they know

we will work with them to resolve immediate issues resulting

from the challenges in the market, in the full knowledge that

we will be flexible in our approach.

Our Better with Bellway sustainability strategy is benefiting

ourpartners as we are able to work together in adopting

low-carbon technologies in our homes, working to reduce

the impact on the environment through our supply chains

and becoming more efficient in resource management on

our sites. Our Future Home project at The University of Salford

has seen us work closely with our partners to deliver new

technologies in our homes and demonstrate the effectiveness

or otherwise of these products and how they perform.

As a result of this strategy, we have had positive engagement

with some of our key suppliers who have fully considered

our plans, and this has led to positive outcomes from

our partners with them adapting their own sustainability

strategies accordingly.

We have ongoing monitoring of health and safety on our

sites, and work closely with our partners to ensure we provide

the right education and information to subcontractors

and suppliers on-site, to ensure our RIDDOR levels

remain consistent.

Impact on Board decision-making

The importance of our partnerships on the success of

ourbusiness means the Board must consider the impact

ofdecisions on our partners.

The success of our Better with Bellway sustainability strategy

islinked closely to the co-operation and support of partners

to work collaboratively in achieving goals.

Key Stakeholder Relationships continued

Strategic Report

70 Bellway p.l.c. Annual Report and Accounts 2023

Customers at the new playground at our Oakley Park development.

Local Communities

and the Environment

How our Local Communities and the Environment

link to our strategic priorities

Charitable Engagement

See pages 60 and 61.

Customers and Communities

See pages 43 and 44.

Biodiversity

See pages 58 and 59.

Why we engage

Bellway’s involvement with local communities goes beyond

just building desirable developments in places where there

is housing need. Our relationship with local suppliers and

subcontractors, the creation of jobs, local infrastructure

investment, and our interactions with local community and

charitable organisations means we regularly engage in the

wider communities in which we are based.

How we engage

As part of the planning process on the purchase of land

and submission of planning permission for a development,

weengage with the local community on public consultation

and engagement. Our research into local areas to identify

local housing requirements means we are able to provide

desirable developments that complement the area where

they are situated and meet the needs of the local population.

Using the feedback garnered through local engagement,

wemay amend our plans accordingly.

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.

These investments are used by local authorities to deliver

infrastructure improvements, designed to limit the impact

that additional housing stock may place on local services.

This results in significant money being used to improve or

build schools, healthcare facilities, roads, recreational facilities

and other services which benefit the wider community.

Our developments lead to job creation and contracts for local

subcontractors, many of whom have long-term relationships

with us, which leads to additional investment from the supply

chain involved in building our homes.

At a Group-wide and divisional level, we have relationships

with national and local charities and community organisations

and run school projects in areas where we have a presence.

These engagements lead to betterment for these organisations,

not just through financial donations, but they also benefit from

us using our expertise to donate time and benefit in kind to

undertake work that these organisations cannot do themselves.

We also involve local communities and charity organisations

directly in our development plans, particularly where there

may be some historical link to the land we are developing to

the local community.

Our Better with Bellway sustainability strategy is also helping

us engage with communities on sustainable activities

and our plans for biodiversity net gain on some sites will

involve communities.

Our national charity partnership with Cancer Research UK

is now in its seventh year and this partnership allows us to

engage in charitable activities on a national and local level.

Board level engagement

The Board is fully supportive of our local community

engagement and environmental activities as this activity

isakey part of our business strategy under Better with

Bellway, which has been fully approved by the Board.

Issues raised as a result of engagement

• 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

Strategic Report

71Bellway p.l.c. Annual Report and Accounts 2023

The Jeweller at our Parsonage Place development, Maidstone.

Engagement outcomes

Of the 10,945 housing completions this year, 25% (2022 – 18%)

were sold to affordable housing providers, providing much

needed affordable homes in communities throughout the UK.

We sold 19% (2022 – 13%) of our new homes to unassisted

first-time buyers while 10% (2022 – 22%) were purchased by

customers using Help-to-Buy, prior to the scheme closing

earlier this year. Overall, 28% (2022 – 34%) of our homes were

sold to first-time buyers. The increase in housing provision

provides additional benefit to local communities, particularly

where housing is in short supply as it releases homes on the

second-hand market and increases supply.

Our fundraising efforts with our national charity partner,

Cancer Research UK, has seen us hit our target of raising

£3 million by the end of 2023, ahead of target thanks to

theamazing fundraising efforts of our colleagues, suppliers

and subcontractors.

Across the Group, our divisions have also raised an additional

£95,312 for other national, regional and local charities through

fundraising activities. This is in addition to benefits in kind

that we donate through staff time and donations of goods

and services.

Our schools engagement programme, launched in September

2022, designed to promote housebuilding as a career option

for school leavers, has engaged 664 secondary schools, and

we have access to 475,022 students (male – 49.8%, female –

50.2%). In addition, we have also launched a primary school

campaign, targeting 166 schools in locations near to our offices

and developments across England, Wales and Scotland.

As we develop our Biodiversity Net Gain (‘BNG’) strategy

ahead of the introduction of the Environment Act (2021)

from January 2024, we have been engaging with local

communities and demonstrating how we can achieve the

10% BNG required. For example, our Tiny Forest trial planted

in Ponteland, Northumberland as part of our Better with

Bellway in 2022 has now started to flourish and the data

wecollect from this pilot will help inform our understanding

on how we can deliver similar projects elsewhere.

Homes sold to affordable housing providers

25%

(2022: 18%)

Houses purchased by unassisted first-time buyers

19%

(2022: 13%)

Homes purchased by customers using Help to Buy schemes

10%

(2022: 22%)

Homes purchased by first-time buyers

28%

(2022: 34%)

Direct, indirect and induced jobs supported

by Bellway in the pastyear

28,800 – 34,100

(2022: 29,300 – 34,800)

Total raised for Cancer Research UK

£3.14m

(2022: £2.56m)

Raised for local charitable and community organisations

£95k

(2022: £123k)

Impact on Board decision-making

The feedback from communities on planned development

forms part of our Board decision-making when deciding on

the viability of a development before progressing.

Our community and charitable fundraising efforts are

included in our Better with Bellway sustainability targets which

are reported to the Board and decisions on future strategy

and direction are influenced by this data.

Key Stakeholder Relationships continued

Strategic Report

72 Bellway p.l.c. Annual Report and Accounts 2023

Government, Regulators

and IndustryBodies

How Government and Regulators link

toourstrategic priorities

Better with Bellway

See pages 38 to 62.

Why we engage

Although Bellway is apolitical, has no political affiliations

ormakes any political donations, the Government,

opposition parties and regulators are responsible for setting

the regulatory and legal framework in which we operate.

In addition, local government plays a vital role in our activities

with the planning system and other regional policies have a

direct impact on our business activities.

How we engage

Most of Bellway’s political engagement with national and

local political stakeholders is undertaken through our industry

representative body, the Home Builders’ Federation (‘HBF’).

We have representation on this body and contribute to its

engagement activities by contributing and engaging on key

industry issues, where a collective position 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.

To progress developments, we proactively work

collaboratively with local authorities and other key statutory

bodies to ensure developments are brought forward to meet

the local housing needs and adapt our plans to reflect the

local need of the communities in which we build.

As well as building desirable communities, we also contribute

to local infrastructure programmes through Section 106

(England and Wales), Section 75 (Scotland) and Community

Infrastructure Levy (‘CIL’) contributions. These funds are

used for key infrastructure projects to reflect the increase

in demand for local services and infrastructure. As a result,

communities benefit by road improvement projects, additional

schools, healthcare facilities and other key schemes.

In major cities and nations with devolved governments,

wework closely with local government officials.

We regularly communicate with Ministers, MPs and other key

political stakeholders relating to local constituency matters.

Our response to the legacy building safety issues has led to

ongoing engagement with the Department for Levelling Up,

Housing & Communities (‘DLUHC’), both directly and through

the HBF. This has also been replicated in Scotland and Wales

with ongoing discussions with government officials relating

tobuilding safety in devolved countries.

The UK Competition and Markets Authority (‘CMA’) market

study into the housebuilding sector in England, Scotland and

Wales has also become a key focus for the Board.

We have been working closely with Homes England,

theGovernment’s housing accelerator body. Its remit to

meetthe housing needs of the nation has led to engagement

relating to projects across the UK. The Help-to-Buy scheme

was a big driver of our engagement with Homes England

prior to the programme’s closure earlier this year.

In October 2022, Bellway activated its registration of the

New Homes Quality Board (‘NHQB’), a new independent

regulatory body for the industry. The New Homes Quality

Code (‘NHQC’) is the industry code of practice for all

registered builders. From this date, customers who reserve

a new home benefit from the protection of the New Home

Quality Code and the New Homes Ombudsman Service.

Strategic Report

73Bellway p.l.c. Annual Report and Accounts 2023

Board level engagement

The Board has been fully engaged in key issues facing

the housebuilding sector. The signing of the SRT with the

Department for Levelling Up, Housing & Communities was

fully considered by the Board as was our response to TheUK

Competition and Markets Authority market study into the

housebuilding sector.

Given the macro-economic impact of policy on the

housebuilding sector, this has been an important focus

fortheBoard during the year.

Issues raised as a result of engagement

• Building safety and the industry voluntary pledge

toremediate buildings in England, the Pact in Wales

andthe Accord in Scotland

• Competition and Markets Authority Study into

thehousebuilding sector

• Local planning issues

• Sustainability and environment

• Health and safety

• Access to housing

• Acceleration of housing supply

Engagement outcomes

Following extensive Board involvement, the Group signed the

Self-Remediation Terms relating to the remediation of legacy

buildings in March 2023 which convert the principles of the

Building Safety Pledge signed in April 2022 into a binding

agreement between Government and Bellway.

In October 2022, we signed up to the Developers’ Pact with

the Welsh Government. Similar in principle to the Pledge

in England, this is a commitment to remediate buildings

over 11 metres in height with life critical fire safety issues.

This reflects our ongoing and responsible UK-wide approach

to building safety. Discussions with the Scottish Government

continue in the signing of the Accord.

The Group has been contributing to the CMA study into the

sector and the Board has been actively involved in providing

information to the competition regulator.

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.

Key Stakeholder Relationships continued

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. This engagement is reported regularly

at Board level to ensure transparency over key political

stakeholder engagement.

Our New Homes Quality Board (‘NHQB’) registration received

board approval and all staff were trained on the requirements

of the New Homes Quality Code (‘NHQC’). The Board

continues to have oversight of our responsibilities under

the Code.

As a result of enhanced political issues impacting the sector,

and the likelihood of a change in government, the Board

has undertaken an exercise in reviewing our corporate

advisors to ensure that our political engagement is reflective

ofacompany of our standing.

Impact on Board decision-making

The political nature of housing strategy naturally impacts the

housebuilding sector and as a result, government policy and

the impact of any economic changes impacts our business.

As a result, the Board has to fully consider the implications

of Government policy, a change in Government or future

opportunities and threats that may arise as a result.

Strategic Report

74 Bellway p.l.c. Annual Report and Accounts 2023

Risk Management

Risk management framework

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, 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.

Key

Reports to Directs and monitors

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.

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.

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.

Strategic Report

75Bellway p.l.c. Annual Report and Accounts 2023

Risk Management continued

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 which includes 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 that they have

conducted a robust assessment of the principal risks facing

the Group.

More information on risk management and internal controls

is included within the Audit Committee Report on pages 114

to 125.

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)

(2022 – 2.3 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. The Group had £38.6 million (2022 – £20.9 million)

of financial assets relating to loans made by Bellway to equity

accounted joint arrangements (note 12). The counterparties to

these loans are expected to make a profit and therefore repay

the loans in full. The Group therefore considers the risk of

default to be minimal.

No credit limits were exceeded during the reporting period

orsubsequently and the Group does not anticipate any losses

from non-performance by these counterparties.

The Board considers the Group’s exposure to credit riskto

beacceptable and normal for an entity of its size, in the

industry in which it operates.

Liquidity risk

The Group finances its operations through a mixture of equity

(comprising share capital, reserves and reinvested profit)

and debt (comprising bank overdraft facilities, borrowings

and fixed rate sterling USPP notes). The Group manages its

liquidity risk by monitoring existing facilities and cash flows

against forecast requirements based on a three-year rolling

cash forecast.

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.

Strategic Report

76 Bellway p.l.c. Annual Report and Accounts 2023

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, the term and

whether a fixed or floating interest rate is obtained.

During the year ended 31 July 2023, 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

£1.9 million (2022 – £2.2 million).

Housing market risk

The Group is affected by movements in UK house prices.

These in turn are affected by factors such as credit availability,

employment levels, interest rates, consumer confidence and

supply of land with planning.

While it is not possible for the Group to fully mitigate housing

market risk on a national macroeconomic basis, the Group

does continually monitor its geographical spread within

the UK, seeking to balance investment in areas offering

the best immediate returns with a long-term spread of its

operations throughout the UK to minimise the effect of local

microeconomic fluctuations.

Going concern statement

After conducting a full review, the Directors have a reasonable

expectation that the Group has adequate resources to fund its

operations for at least the period to 31 July 2025, 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 168 to 169.

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 2027, which is longer

than required by the going concern assumption. This period

is consistent with the Group’s detailed bottom-up forecasts

which assess future profitability, cash flows and the land bank

and are overlayed with prudent Group level assumptions.

Factors considered in assessing the long-term viability

In assessing the Group’s forecasts and long-term viability,

thefollowing factors are considered:

Factor Consideration

Group’s latest

performance

This considers the trading performance

in both the year ended 31 July 2023

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 2023.

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.

Strategic Report

77Bellway p.l.c. Annual Report and Accounts 2023

Group forecast methodology

The Group’s bottom-up forecasts are updated on at least a

monthly basis by the 21 operating divisions and are subject to

review by the divisional management team, Regional Chairs

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.

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

ofthe Self-Remediation Terms.

• 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:

Factor Consideration

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 FY24 are supported by the forward

order book, but still fall to 55% of that achieved in H1 of FY23.

In the 12 months to 31 January 2025, 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 FY24 remains in line with

internal forecasts due to the order book position. In the

12 months to 31 January 2025, 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.

AA 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 2025 for the going concern assessment, but extended

to the 31 July 2027 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.

The output of this review considered the profitability,

cashflows and funding requirements of the Group over

the period to 31 July 2027. 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 2027.

Risk Management continued

Strategic Report

78 Bellway p.l.c. Annual Report and Accounts 2023

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 any

potential issues within their own

business and 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

Strategic Report

79Bellway p.l.c. Annual Report and Accounts 2023

Principal Risks continued

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 /

market expectations.

• There is an increased focus

on the actions taken by

businesses in response to

climate change and the

disclosures made. Failure to

improve policies, reporting

and performance in line

with new 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 and monitoring

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.

Strategic Report

80 Bellway p.l.c. Annual Report and Accounts 2023

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.

• Development programmes for

senior leaders and middle managers

in place.

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.

Strategic Report

81Bellway p.l.c. Annual Report and Accounts 2023

Principal Risks continued

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.

Strategic Report

82 Bellway p.l.c. Annual Report and Accounts 2023

Risk and description Strategic relevance KPIs Mitigation

Unforeseen significant event

An unforeseen

significant national or

global event occurs.

• The economic uncertainty

brought about by an

unforeseen significant event

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 and acknowledge

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 any potential issues

within their own business and

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.

Strategic Report

83Bellway p.l.c. Annual Report and Accounts 2023

Task Force on Climate-related Financial Disclosures (‘TCFD’)

In meeting the requirements of Listing Rule 9.8.6 R, we have concluded that:

For FY23, we fully comply with recommended disclosures 1, 2, 3, 4, 5, 6, 8, 10 and 11.

For FY23, we partially comply with recommended disclosures 7 and 9.

We are not complaint with the requirement to consider the financial impact of identified risks over the medium and long-term

time horizons, as we evolve our approach to TCFD, this will be addressed.

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.

2023 Annual Report – Governance

section (Pages 100 to 161)

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.

2023 Annual Report – Governance

section (Pages 100 to 161)

Compliant

During the year the Bellway p.l.c.

Board formally constituted a Sustainability

Committee. 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.

2023 Annual Report – Strategic report

section (Pages 10 to 99)

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.

2023 Annual Report – Strategic report

section (Pages 10 to 99)

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.

2023 Annual Report – Strategic report

section (Pages 10 to 99)

Compliant – We have assessed the

resilience of our commercial strategy

toclimate-related risks.

We have reviewed resilience of our Better

with Bellway strategy to climate-related

risks and opportunities.

Risk management

6) Describe the organisation’s processes

for identifying and assessing climate-

related risks.

2023 Annual Report – Risk management

(Pages 75 to 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. Climate change

is included as a principal risk (page 80).

7) Describe the organisation’s processes

for managing climate-related risks.

2023 Annual Report – Risk management

(Pages 75 to 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 2024.

Strategic Report

84 Bellway p.l.c. Annual Report and Accounts 2023

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.

2023 Annual Report – Risk management

(Pages 75 to 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.

2023 Annual Report – Carbon Reduction

section (Pages 49 to 52)

Partially compliant – during the year we

have set opportunity metrics related to

climate-related remuneration. We have

not yet set an internal price of carbon.

The process of setting and disclosing an

internal price of carbon will be considered

by the new Group Head of Sustainability

during FY24.

10) Disclose scope 1, scope 2, and if

appropriate, scope 3 greenhouse

gasemissions, and the related risks.

2023 Annual Report – Carbon Reduction

section (Pages 49 to 52)

Compliant

Bellway commits to reduce absolute

scope 1 and scope 2 GHG emissions by

46% by July 2030 from a FY19 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

FY19 base year.

11) Describe the targets used by the

organisation to manage climate-

related risks and opportunities and

performance against targets.

2023 Annual Report – Carbon Reduction

section (Pages 49 to 52)

Compliant

In addition to the GHG targets,

Bellwaycommits to reduce waste per

completed unit by 20% by July 2025 and

to reduce construction site water usage.

As a responsible homebuilder, we recognise that climate change is a growing and significant issue. For a third consecutive year,

we are reporting against the Task Force on Climate-related Financial Disclosures (‘TCFD’) recommendations.

This year, we have focused on assessing the resilience of our

Better with Bellway strategy, taking into consideration different

future climate scenarios and enhancing the disclosure of the

metrics used to assess climate-related risks and opportunities.

More details on emissions methodology and efficiency ratios

used as part of our Better with Bellway strategy can be found

on pages 38 to 62.

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

inthe 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. During the

year the Board made the decision to formally constitute

a Sustainability Committee, which shall assist the Board in

fulfilling its responsibilities in relation to ESG matters and

overseeing the performance of the Better with Bellway

strategy, and will report to the Board on at least an annual

basis. Our Group Finance Director is the Board sustainability

sponsor and with the support of the Committee is responsible

for monitoring climate change risks, opportunities and

business impacts.

The Committee is supported by the Better with Bellway

Leadership Team, chaired by the Group Head of Sustainability.

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.

Prior to the formation of the Sustainability Committee in May

2023, an annual in-depth sustainability update was provided

to the Board which included 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, the continued expansion of timber

framed construction and the early adoption of 10% bio-

diversity net gains within planning permissions submitted.

The Audit Committee receives quarterly updates on business

risks which include climate change. Annually, the Committee

undertakes a comprehensive review of key business risks.

Strategic Report

85Bellway p.l.c. Annual Report and Accounts 2023

Climate scenario analysis

We first embarked on our journey to identify climate-related

financial risks and opportunities for our business in 2021

and in 2022 we expanded upon this and developed a

robust approach to climate scenario analysis. This year we

have again 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 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.

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

(RCP8.5)

A global temperature increase

between 3.2°C and 5.4°C,

wherecarbon emissions

continuegrowing unmitigated.

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 Reduction

• 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

the Government’s Future Homes Standard.

• Designing homes with reduced

energy consumption.

For our TCFD reporting, both climate scenarios are projected

over three time horizons – short-term (2023 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 into 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 operates out of 21 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.

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.

Task Force on Climate-related Financial Disclosures (‘TCFD’) continued

Strategic Report

86 Bellway p.l.c. Annual Report and Accounts 2023

The most relevant climate-related risks we have identified

are summarised on pages 87 to 89. This includes the level of

financial impact for the short-term time horizon (2023 – 2040).

We are not compliant with the requirement to consider the

financial impact of the identified risks over the medium and

long term time horizons, we will do this as we evolve our

approach to TCFD.

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

(2023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 2.5%

and 5%.

4. An increase to Bellway’s portfolio value at more than 5%.

The financial impacts of the risks and opportunities are

considered as part of the financial planning process.

This includes the allocation of resources for initiatives

including the Future Home Standard (more detail on page

52), the cost of complying with BNG requirements as well as

continuing to consider the physical risks of climate change,

such as flood risk, as part of land viability assessments.

Bellway considers its strategy to be resilient to the climate

risks identified.

Physical risk

Financial score

Category Identified climate risk Actual and financial impact

Cautious 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

rising 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

Strategic Report

87Bellway p.l.c. Annual Report and Accounts 2023

Transition risk

Financial score

Category Identified climate risk Actual and financial impact

Cautious 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 new local 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 new regulatory requirements are

not met.

The impact of this risk has been built into the

Carbon Reduction strategy, metrics and targets as

part of Better with Bellway, see pages 49 to 52.

Score 3 Score 4

Failure to report and

disclose 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.

The impact of this risk has been built into the

Carbon Reduction and Sustainable Supply Change

strategies, metrics and targets as part of Better with

Bellway, see pages 49 to 52, 55 and 56.

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

Task Force on Climate-related Financial Disclosures (‘TCFD’) continued

Strategic Report

88 Bellway p.l.c. Annual Report and Accounts 2023

Transition risk continued

Financial score

Category Identified climate risk Actual and financial impact

Cautious Scenario

(short-term

time-horizons)

Worst Case

Scenario (short-

term time-horizons)

Market Supply chain challenges

resulting in exhaustion

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.

The impact of this risk has been built into the

Sustainable Supply Change strategy, metricsand

targets as part of Better with Bellway, see pages

55 and 56.

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.

The impact of this risk has been built into

the Carbon Reduction and Customers and

Communities strategies, metrics and targets as

part of Better with Bellway, see pages 49 to 52.

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

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

Strategic Report

89Bellway p.l.c. Annual Report and Accounts 2023

Better with Bellway is regularly reviewed by the Board,

the Sustainability 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 our

established 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 is

reviewed 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 a risk 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. More detail on our

decarbonisation plans and actions to achieve our targets can

be found on pages 49 to 52.

Our scope 3 target goes 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 the Better with Bellway

strategy. These targets 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 15.0% 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 49 to 52.

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

e) emissions against our 2019 baseline by July 2030.

• 55% reduction of our scope 3 emissions (tonnes CO

perm

floor area) against our 2019 baseline by July 2030.

• 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

of water per 1000m

ofcompleted 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,

seepage 135 for further information.

For more information, please see our Better with Bellway page

on our website.

Task Force on Climate-related Financial Disclosures (‘TCFD’) continued

Strategic Report

90 Bellway p.l.c. Annual Report and Accounts 2023

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 2022 – 31 July 2023.

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

33.5% of our owned and controlled land bank plots were on brownfield land,

asat1 July 2023.

31.1% 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 31 July 2024.

IF-HB-160a.3 Total amount of monetary

losses as a result of

legal proceedings

associated with

environmental regulations

There has been £108,790 in monetary losses as a result of legal proceedings

associated with the environment.

Strategic Report

91Bellway p.l.c. Annual Report and Accounts 2023

Sustainability Accounting Standards Board (‘SASB’) continued

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 a Group Head of Biodiversity who works closely with our Commercial,

Planning and Land teams to ensure that we fully integrate all reasonable

environmental considerations into our developments and achieve our Better

withBellway objectives.

The Group Head of Biodiversity has provided detailed training to a range of

staffacross the business on specific ecology and biodiversity related matters.

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 also strive to reduce water use associated

with our developments using a range of available techniques, most notably in

areas of existing high water stress.

• 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 Group 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.

• In 2023, we planted 15,023 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 31 July 2026.

• Wherever possible mature trees and woodlands located within our

developments are retained. These trees are then protected during development

in accordance with British Standard 5837:2012.

• Our Regional Health and Safety Managers conducted 770 monitoring

visits of sites in FY23 to assess compliance with our health, safety and

environmental policies.

• Over the past year, we’ve installed sustainable drainage systems on 253

ofour developments.

• We’ve implemented biodiversity plans on 146 of our developments across

the UK.

• 100% of our sites have individual site waste management plans.

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92 Bellway p.l.c. Annual Report and Accounts 2023

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 221.15.

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-410a.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.

99% 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 1 August 2022 to 31 July2023.

The sample analysed covered 8,652 homes accounting for 79% 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 FY23 were designed to a flow of less than

110litres per person per day.

Our homes incorporate low flow outlets and 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 does 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.

Strategic Report

93Bellway p.l.c. Annual Report and Accounts 2023

Sustainability Accounting Standards Board (‘SASB’) continued

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 2023, we contributed £89.2 million to local communities via planning

obligations to fund infrastructure and facilities.

Around 84.3% of our sites 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.

10,812 (33.5%) of our owned and controlled land bank plots at 31 July 2023 were

on brownfield land.

3,399 (31.1%) 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 our 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’).

Strategic Report

94 Bellway p.l.c. Annual Report and Accounts 2023

Code SASB criteria Our approach

Activity metrics

IF-HB-000.A Number of controlled lots As at 31 July 2023, our short-term land bank stood at 32,229 plots.

IF-HB-000.B Number of

homes delivered

We delivered 10,972 home completions, 10,945 from wholly owned operations

along with 27 from our share of joint ventures.

IF-HB-000.C Number of active

selling communities

We sold from 239 average active sales outlets, 238 in our wholly owned

operations and one in our joint ventures.

Strategic Report

95Bellway p.l.c. Annual Report and Accounts 2023

Non-Financial and Sustainability Information Statement

This section of the strategic report constitutes Bellway p.l.c.’s Non-Financial and Sustainability Information

Statement, produced to comply with Section 414CB of the Companies Act 2006. The requirements are

addressed in this section by means of cross referencing to indicate which sections of the narrative they

are embedded. Our policies can also be found at www.bellwayplc.co.uk.

Non-financial information Section Pages

Description of our Business Model Our Business Model 18 to 23

Principal Risks Risk Management 75 to 78

Principal Risks 79 to 83

Non-Financial KPIs Better with Bellway KPIs

Bellway with Bellway

Our Business Model

12 to 13

38 to 62

18 to 23

Climate-related Financial Disclosures Task Force on Climate-related Financial Disclosures (TCFD) 84 to 90

Reporting

requirement Our approach

Relevant policies

and standards which

govern our approach

Related principal

risks*

Where to find more

information Page

Environmental

matters

As a responsible house builder

we are committed to ensuring the

business plays a role in delivering

carbon reduction and planning for a

sustainable future. Werecognise that

climate change is one of the defining

challenges of our time and we are

committed to reducing our own

emissions, and customer emissions

from the homes we build, throughthe

setting of science-based targets to

reduce our scope 1, 2 and scope 3

emissions. Through collaborations

and test trials, we are working on a

variety of technologies to help reduce

carbonemissions.

• Climate

Change Policy

• Environmental

Policy

• Sustainability

Policy

• Better

with Bellway

• Future Homes

Standard (‘FHS’)

• Waste

Management

Policy

• Environment

and climate

change

• Land and

Planning

• Legal and

Regulatory

Compliance

• TCFD 84 to 90

• Better with

Bellway – Carbon

Reduction

49 to 52

• Better with

Bellway –

Biodiversity

• Better with

Bellway –

Sustainable

Supply Chain

55 to 56

• SASB Disclosures 91 to 95

• Section 172

Statement

Employees Bellway is committed to being an

inclusive employer that aims to create

an environment that is open, diverse,

and free from all forms of prejudice

and discrimination and we have

set a range of targets to improve

the diversity of our workforce. We

also thrive to create a safe working

environment that promotes personal

development and equal opportunities.

Themental health of our colleagues is

important, andwe are taking steps to

improve the ratio of mental health first

aiders within theGroup.

• Health and

Safety Policy

• Agile Working

Policy

• Safeguarding

Policy

• Equality

Diversity&

Inclusion Policy

• Health

and Safety

• Legal and

Regulatory

Human

Resources

• IT and Security

• Legal and

Regulatory

Compliance

• Better with

Bellway –

Employer

of Choice

46 to 47

• Better with

Bellway –

Building Quality

Homes, Safely

53 to 54

• Key Stakeholder

Relationships

66 to 68

• Nomination

Committee

Report

113

• Audit

Committee

Report

114 to 125

• SASB Disclosures 91 to 95

Strategic Report

96 Bellway p.l.c. Annual Report and Accounts 2023

Reporting

requirement Our approach

Relevant policies

and standards which

govern our approach

Related principal

risks*

Where to find more

information Page

Respect for

Human Rights

Bellway is committed to respecting

human rights ensuring our people,

subcontractors and suppliers are

always treated fairly. We will continue

to take steps to ensure we are

respecting human rights through our

procedures and policies and develop

our knowledge and awareness of

humanrights.

• Anti-Slavery

and Human

Trafficking

Statements

• Data protection

Policy

• Privacy Notice

• Bereavement

Policy

• Maternity Leave

Policy

• Paternity Leave

Policy

• Construction

resources

• Health

and Safety

• IT and Security

• Legal and

Regulatory

Compliance

• Better with

Bellway

Employer

of Choice

46 to 47

• Key Stakeholder

Relationships

66 to 70

• SASB Disclosures 91 to 95

• Nomination

Committee

Report

113

• Audit

Committee

Report

114 to 125

Social matters Bellway is committed to support our

local communities through, community

engagement, donations, and our

recently introduced Volunteering

Policy. We aim to continue investing

in our local communities through the

planning process, where we invest in a

range of community services and build

a wide range of houses and apartments

to meet the varying budgets and needs

of our customers. We are proud of our

5-star

homebuilder status, and we aim

to do better through our Customer

First programme.

In August 2022, Bellway established a

new standalone Building Safety division,

which is dedicated to the remediation

of buildings identified during the review

of our high-rise portfolio, providing a

full in-house capability in the delivery of

remedial works. In March 2023 Bellway

signed the DLUHC Self-Remediation

Terms (SRT) in England, which converted

the principles of the building safety

pledge signed in 2022, in which we

committed to resolve any historical fire

remedial work on buildings completed

since 5 April 1992, into a binding

agreement between the Government

and Bellway. This was followed in May

2023, with the signature of the Welsh

Government’s Self-Remediation Terms.

• Better with

Bellway

• Charity Policy

• Volunteering

Policy

• Anti-Money

Laundering

Policy

• Home Builders

Federation

• Self-Remediation

Terms

• Health

and Safety

• Land and

Planning

• IT and Security

• Legal and

Regulatory

compliance

• Better with

Bellway

38 to 62

• Our Business

Model

18 to 23

• Our Marketplace 24 to 25

• SASB Disclosures 91 to 95

• Chief Executive’s

Market and

Operational

Review

30 to 33

• Section 172

Statement

• Key Stakeholder

Relationships

64 to 74

Anti-bribery

and anti-

corruption

Bellway is committed to high standard

of ethics, honesty and integrity and

have a zero-tolerance approach to any

form of bribery and corruption and

have compliance procedures in place

to prevent bribery and corruption in

our business. The standards set by

Bellway are expected to be followed

by all employees, subcontractors,

suppliers and any other third party

acting for or on behalf of the Company.

• Bribery

and Corruption

Policy

• Whistle blowing

Policy

• Legal and

Regulatory

Compliance

• Audit

Committee

Report

114 to 125

* For full details on related principal risks see pages 79 to 83.

Strategic Report

97Bellway p.l.c. Annual Report and Accounts 2023

Governance

Chair’s Statement on

CorporateGovernance

100

Board of Directors and

Group General Counsel

and Company Secretary

102

Board Activities and Decisions 104

Board Leadership 106

Division of Responsibilities 107

Composition, Succession

andEvaluation

111

Nomination Committee Report 112

Audit Committee Report 114

Remuneration Report 126

Sustainability Committee Report 146

Directors’ Report 147

Independent Auditor’s Report 151

98 Bellway p.l.c. Annual Report and Accounts 2023

Making better

choices for

our stakeholders

Stakeholder engagement is an important part of our business

operations as it helps inform Board decision-making and ensures

we consider the impact of those decisions on key stakeholders.

99Bellway p.l.c. Annual Report and Accounts 2023

Governance

During the year the Board has constituted

aSustainability Committee. The Committee

shall assist the Board in fulfilling its

responsibilities in relation to ESG matters

andoverseeing the performance of the

Betterwith Bellwaystrategy.”

John Tutte

Chair

Dear Shareholder

I am pleased with the Company’s continued commitment

to sustainability and how this is being 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.

Sustainability

The Board has worked hard to set an ambitious ESG agenda

and I am pleased to update you, that during the year the

Board has constituted a Sustainability Committee of which

I am Chair. The Sustainability Committee shall assist the

Board in fulfilling its responsibilities in relation to ESG matters

and overseeing the performance of the Better with Bellway

strategy. A Sustainability Committee report has been prepared

for the first time, detailing the key responsibilities of the

Committee and focus for FY24. More details can be found

onpage 146.

Our Better with Bellway strategy has been operational

since March 2022, with sustainability at its heart, it 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 third

year of making TCFD disclosures, and we will continue to

refine and develop our approach. More information on

TCFDreporting can be found on pages 84 to 90.

In addition, as part of our Better with Bellway strategy, we have

chosen to report against SASB and SDGs reporting frameworks

as these were identified as being most relevant to our investors.

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

(more detail on pages 91 to 95).

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 pages 43 to 62).

Diversity

The Board believe a highly qualified board with directors from

diverse backgrounds 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 Reviews, the FTSE Women’s Leaders

Review recommendations, and the FCA disclosure rules.

During the year, Sarah Whitney has been appointed as Senior

Independent Non-Executive Director, and the Board has

approved increasing the number of Non-Executive Directors

to allow the Company to meet these targets. Recruitment for

an additional Non-Executive Director is underway in order

for us to meet the requirements of the FCA disclosure rules,

however this was not completed in time for the financial

year end 31 July 2023, the appointment is expected to

be confirmed in advance of the Company’s 2023 AGM in

December 2023. The Board welcomes the opportunity to

further expand the diversity and skills of its Directors.

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 46 and 47). 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. Bellway held its

first Pride event in 2023, which was well supported across

the Group.

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.

Chair’s Statement on Corporate Governance

Governance

100 Bellway p.l.c. Annual Report and Accounts 2023

Board effectiveness and evaluation

In line with the UK Corporate Governance Code, weundertake

a formal and rigorous annual evaluation of our own performance

and that of our Committees and individual directors. We operate

a three-year cycle of internal and externally facilitated reviews.

Bellway’s last externally facilitated evaluation took place in

2020, and for 2023 we appointed Trusted Advisors Partnership

(‘TAP’), aspecialist consultancy which has no other business

or connection to the Group or individual Directors, to facilitate

the evaluation.

Having been provided with a comprehensive briefing by the

Chair and Group General Counsel and Company Secretary,

TAP conducted an evaluation process in July2023,involving:

• Main Board and Chair’s questionnaires and the Chair’s

and SID’s concluding memo from the internal 2022 review,

together with the concluding report from the last external

evaluation in 2020.

• Access to Board and Committee papers and minutes to

enhance TAP’s understanding of how the Board and its

Committees operate.

• Individual virtual meetings were held with each Executive

and Non-Executive Board Director and with the Group

General Counsel and Company Secretary.

TAP reviewed the Chair, Non-Executive Directors,

theBoard and its Committees’ effectiveness to fulfil its

duties considering:

a. Board structure, capability and performance.

b. Quality of Board discussion and review to support the

delivery of Bellway’s sustainable growth strategy.

The evaluation concluded that the Bellway p.l.c. Board is

well constituted with a cohort of experienced, capable,

andengaged Non-Executive and Executive Directors that

are able and willing to fulfil their responsibilities, withoutany

conflict of interest; the Board Committees operate well,

andthe Board is also well Chaired. The Board is constructive,

respectful and allows for open and honest discussion

and debate.

The evaluation noted that the Board itself has evolved with

the appointment of a new Chair and Senior Independent

Non-Executive Director. The two recent appointments to the

Board have added sector knowledge depth and comparative

perspective. The Board can be characterised as inviting and

accepting of challenge and is operating effectively against the

requirements of the short to medium term.

Areas for further development include the ability to clearly

articulate corporate ambition, continued evolution of attitude

to risk, organisational structure and expanding the Executive

Committee. The Board will agree formal action points relating

to these areas of development.

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,

fromthe Financial Reporting Council, online at www.frc.org.uk

or by telephoning 020 7492 2300.

John Tutte

Chair

16 October 2023

Board evaluation 2021/22 update

Action point Progress

The Board should give consideration to its formal objectives

andregularly appraise itself against them.

Strategic progress has been added as a standing

agendaitem.

To further consider Board and Committee membership in line

withthe Parker Reviews’ recommendations.

The Board has approved the appointment of an additional

Non-Executive Director and recruitment is underway.

Further promote greater interactions between seniormanagers

and the Board to better understand currentchallenges.

Senior Managers will continue to present updates to the

Board. In addition the Board has held meetings at divisional

offices and held site visits to increase interactions.

101Bellway p.l.c. Annual Report and Accounts 2023

Governance

Board of Directors and Group General Counsel andCompanySecretary

John Tutte

Chair

Appointed 1 March 2022

Background and experience

John was appointed to the Board on 1 March 2022 as

Non-Executive Chair Designate, and succeeded Paul

Hampden Smith as Non-Executive Chairman and Chair of

the Nomination Committee on 1 April 2022. 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

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 – Senior Independent director, Chairof

the Remuneration Committee, and a member of the

Nomination Committee.

Jill Caseberry

Independent

Non-Executive Director

Appointed 1 October 2017

S* S*

Jason Honeyman

Group Chief Executive

Appointed 1 September 2017

NR*

Background and experience

Jason commenced employment with the Group in January

2005 as Managing Director of the Thames Gateway division,

becoming Southern Regional Chairman in December 2011.

Jason joined the Board as Chief Operating Officer and was

promoted to Group Chief Executive on 1 August 2018.

Background and experience

Sarah, a Chartered Accountant, was appointed to the

Board as a Non-Executive Director on 1 September 2022

and succeeded Denise Jagger as Senior Independent

Non-Executive Director on 16 December 2022 at the

Annual General Meeting. 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.

Other appointments

• JP Morgan Global Growth & Income plc – non-executive

director, Chair of Audit Committee and of the Management

Engagement Committee.

• BBGI Global Infrastructure S.A. – Chair of the Supervisory

Board and Chair of the Nomination Committee.

• Tritax EuroBox plc – Senior Independent Director

and member of the Audit, ESG and Management

Engagement Committees.

• The Canal & River Trust – Trustee and Chair of the

Investment Committee.

• Skipton Building Society - Non-Executive director, member

of Nominations committee and Chair of Connells Limited.

Sarah Whitney

Senior Independent

Non-Executive Director

Appointed 1 September 2022

Governance

102 Bellway p.l.c. Annual Report and Accounts 2023

Keith Adey

Group Finance Director

Appointed 1 February 2012

Simon Scougall

Group General Counsel

andCompany Secretary

Appointed 1 February 2016

Membership and meeting attendance

Director Number of meetings attended during the year

John Tutte 9/9

Sarah Whitney 9/9

Jill Caseberry 9/9

Ian McHoul 9/9

Jason Honeyman 9/9

Keith Adey 9/9

Denise Jagger 3/3

Key:

Audit Committee

Sustainability Committee

Remuneration Committee

Denotes Committee Chair

Nomination Committee

Board Committee on Non-Executive Directors’ Remuneration

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.

Background and experience

Ian, a Chartered Accountant, was appointed to the

Board as a Non-Executive Director on 1 February 2018,

and appointed as Chair 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.

Ian McHoul

Independent

Non-Executive Director

Appointed 1 February 2018

Denise Jagger

Senior Independent

Non-Executive Director

Appointed 1 August 2013

Resigned 16 December 2022

103Bellway p.l.c. Annual Report and Accounts 2023

Governance

September October December January March May June July

Board Activities and Decisions

For more detail on how the Board has considered and engaged with key stakeholders please

see pages 64 to 74.

Board activities, decisions and stakeholders considered

2022 2023

Board activity or decision

Sarah Whitney appointed

as an Independent Non-

Executive Director.

How stakeholders

wereconsidered

The Board is committed to

making appointments that

complement and expand

upon the Board’s existing

skills, and to comply

with the requirements

of the Parker Reviews,

theFTSE Women’s

LeadersReview and the

FCAdisclosurerules.

Board activity or decision

Investor Meet the Team Day

How stakeholders

wereconsidered

The Board met with

investors and analysts,

the day focused on the

key parts of our Better

with Bellway sustainability

strategy, including

the delivery of low

carbonhomes.

Board activity or decision

Board Evaluation

How stakeholders

wereconsidered

The Board concluded

its internal valuation and

agreed actions point

to further develop the

effectiveness of the Board.

Board activity or decision

Approval of the 2022 annual

report and accounts.

How stakeholders

wereconsidered

The Board approved the

preliminary announcement

along with the 2022 annual

report and accounts.

Board activity or decision

Following the retirement

of Denise Jagger from

the Board, Sarah Whitney

was appointed asSenior

Independent Non-

Executive Director.

How stakeholders

wereconsidered

The Board decision to

appointment Sarah Whitney

as Senior Independent

Non-Executive Director

demonstrates commitment

to complying with the

requirements of the Parker

Reviews, theFTSE Women’s

LeadersReview and the

FCAdisclosurerules.

Board activity or decision

AGM

How stakeholders

wereconsidered

Shareholders had the

opportunity to meet the

Board and discuss issues

ofimportance.

Board activity or decision

Board visit to the Salford

University – Energy

House2.0.

How stakeholders

wereconsidered

The Board visited the

Energy House 2.0 and were

shown the technologies

being tested to reduce

scope 3 emissions for

ourcustomers.

Governance

104 Bellway p.l.c. Annual Report and Accounts 2023

September October December January March May June July

Board activities, decisions and stakeholders considered

Board activity or decision

£100m share buyback

programme announced.

How stakeholders

wereconsidered

The Board approved a

£100m share buyback

programme to return

capitalto investors.

Board activity or decision

Signing of the Self-

Remediation Terms with the

Department for Levelling Up,

Housing and Communities

inrelation to historical fire

safety issues.

How stakeholders

wereconsidered

The Board approved the

Self-Remediation Terms

further demonstrating

Bellway’s commitment

to being a responsible

developer inrelation to

historical fire safety issues.

Board activity or decision

Tranche 1 of share

buybackbegun

How stakeholders

wereconsidered

The Board approved start of

the first £50m tranche of the

share buyback.

Board activity or decision

Decisions to formally

constitute a Sustainability

Committee as a sub-

committee of the Board.

How stakeholders

wereconsidered

Demonstrating the Board’s

commitment to sustainability

and the Better with Bellway

strategy, in line with best

practice, a Sustainability

Committee was established.

Board activity or decision

Decision to seek

an additional Non-

Executive Director.

How stakeholders

wereconsidered

Demonstrating commitment

to comply with the

requirements of the Parker

Reviews, theFTSE Women’s

LeadersReview and the

FCAdisclosurerules, the

Board is seeking to appoint

and additional Non-

Executive Director.

Board activity or decision

Board site visit

How stakeholders

wereconsidered

The Board visited an active

site at Eastern Counties

division and met with staff

and subcontractors.

Board activity or decision

Tranche 1 of the share

buybackended and tranche

2 of share buyback begun.

How stakeholders

wereconsidered

The Board approved the

second tranche of the share

buyback programme to

return capital to investors.

Board activity or decision

Annual Board

StrategyMeeting including

presentations from the

Company’s brokers and

the HBF.

How stakeholders

wereconsidered

The Board’s annual strategy

day allows for discussion

of the short and long-term

strategy of the business.

Customers Employees

Investors, Analysts

and Advisors

Subcontractors

and Supply Chain

Local Communities

and the Environment

Government

and Regulators

Key:

105Bellway p.l.c. Annual Report and Accounts 2023

Governance

Board Leadership

The Board is the principal decision-making body of the Group and collectively, has the responsibility

topromote the long-term sustainable success of the Group, while contributing to the wider society.

Board Leadership

Executive Directors

Divisional Boards

Group General Counsel

and Company Secretary

Head Office Senior

Management Team

Better with Bellway

Leadership Committee

Regional Chairman

Board of Directors

Audit Committee

Nomination

Committee

Remuneration

Committee

Board Committee

on Non-Executive

Directors’ Remuneration

Sustainability

Committee

Sets and defines the Company’s purpose and

values, which drives the Company’s culture.

Annual review of subcommittee terms of

reference and the delegation of authority.

Reviews, considers and approves major

transactions for the Group.

Sets and drives the Group’s strategies, including

sustainability, volume growth and value creation.

Oversees the risk appetite of the Group and

ensures sufficient controls.

Provides oversight of corporate governance and

ensures effective engagement with stakeholders.

Approval of the annual

Anti-Slavery and Human

Trafficking Statement.

Annual Internal

Control and Risk

Management review.

Annual Policy

compliance review.

Review and approval of

the draft Annual Report

and Accounts.

Audit plan and review of

auditor policy.

on pages 114 to 125.

Review the structure, size

and composition of the

Board, in accordance

with the Board’s

Diversity Policy, and

current legislation.

Consider succession

planning for the Board

and their direct reports.

Identify candidates to

fill Board vacancies and

nominate these to the

Board for approval.

Consider diversity and

inclusion targets for

the Group.

Annual performance

evaluation of

the Committee.

on pages 112 and 113.

Review and

determine salaries

and other elements of

remuneration package

of individuals under the

Committee’s remit.

Work with external

advisors to review and

determine annual bonus

performance targets.

Annual review of

remuneration of

management below

board level and the

general workforce.

Annual review, grant

and vest of any awards

under the long-term

incentive plan.

Review

Remuneration Policy.

on pages 126 to 145.

Meet at least once a year,

to review fees, and the

terms of appointment

of the Non-Executive

Directors (excluding

the Chair).

Receive advice from

the Group General

Counsel and Company

Secretary and external

remuneration consultants

when required.

on page 110.

Oversee ESG matters

for Bellway, including

the Better with

Bellway strategy.

Review industry best

practice in respect of

ESG compliance.

Review and approve

Better with Bellway

targets and KPIs.

Review relevant policies

and determine their

appropriateness in

supporting the Group’s

sustainability agenda.

Will meet at least twice a

year, and when required

in addition.

on page 146.

Leadership

Governance

106 Bellway p.l.c. Annual Report and Accounts 2023

Division of Responsibilities

Statement about applying the principles

ofgoodgovernance

The Board acknowledges the importance of, and is committed

to the principle of, achieving and maintaining a high standard

of corporate governance and in promoting a positive culture

within the Group.

We have applied the principles of good governance,

includingboth the Main Principles and the Supporting

Principles, by complying with the Code. Further explanations of

how the Main Principles and Supporting Principles have been

applied are set out below and in the Remuneration Report.

Leadership

The Board is the principal decision-making body of the Group

and is collectively responsible to shareholders for promoting

the long-term success of the Group.

At the date of this report, the Board consists of six directors

whose names, responsibilities and other details appear

on pages 102 and 103. Currently two of the directors are

executive and four are non-executive.

The Board sets the strategic aims, ensures that the necessary

resources (including finances, people and materials) are in

place for the Group to meet these objectives and also reviews

management performance. It defines the Group’s values and

standards and ensures that its obligations to its shareholders

are understood and met.

The Board has put in place the following structure which

allows it to provide entrepreneurial leadership of the Group

and to delegate authority for operational matters through a

framework of prudent and effective controls, which enable

risk to be assessed and managed.

Chair

• Promoting the highest standards of integrity, probityand

corporate governance throughout the Group and

particularly at Board level including ensuring that the

correct cultural tone is set from the top.

• Ensuring that the Group complies with the requirements of

the UK Corporate Governance Code and adheres to the

highest standards of governance.

• Leading the Board and ensuring its effectiveness.

• Setting the Board’s agenda.

• Ensuring the Directors receive accurate, timely and

clear information.

• Ensuring effective communication with shareholders.

• Ensuring the effective conduct of Board meetings and

facilitating the effective contribution of all directors and the

Group General Counsel and Company Secretary.

• Leading the evaluation of the performance of the Board,

its Committees, individual Directors and Group General

Counsel and Company Secretary.

• Overseeing the induction of any new 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 Chair, 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 Chair 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 Chair, Executive

Directors and the Group General Counsel and

Company Secretary.

• Being available to shareholders.

• Leading the annual appraisal of the Chair.

• Holding meetings with the Non-Executive Directors

withoutthe Chair present.

Non-Executive Directors

• Constructively challenging management.

• Contributing to the development of strategy.

• Scrutinising the performance of management.

• Ensuring integrity of financial information and financial

controls and ensuring systems of risk management

are robust.

• Determining appropriate levels of Executive Director,

GroupGeneral Counsel and Company Secretary and

Regional Chairman remuneration.

• Appointing and removing Executive Directors and

succession planning.

• Serving on Board committees.

107Bellway p.l.c. Annual Report and Accounts 2023

Governance

Group General Counsel and Company Secretary

• Supporting the Chair 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 Chair 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 Reviews, the FTSE Women’s

Leaders Review, and the FCA disclosure rules. 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. Value creation.

3. Better with Bellway.

Each year we look to 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 Chair meets

with Executive Management and individual Directors on a

regular basis outside of Board meetings. This process allows

for two-way discussion, enabling the Chair 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

(Chair)

1 March 2022, appointed

Chair 1 April 2022

9/9

Denise Jagger 1 August 2013

Resigned 16 December 2022

3/3

Jill Caseberry 1 October 2017 9/9

Ian McHoul 1 February 2018 9/9

Jason Honeyman 1 September 2017 9/9

Keith Adey 1 February 2012 9/9

Sarah Whitney 1 September 2022 9/9

The number of Committee meetings are set out in each

Committee report. There were no absences from any Board

or Committee meetings.

Division of Responsibilities continued

Governance

108 Bellway p.l.c. Annual Report and Accounts 2023

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 at

the 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:

• Operational and strategic review

• Financial review

• Major land acquisitions

• Major projects

• Risk

• Health and safety

• Sales and customer care

• Human Resources

• 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 Chair, the Group Chief Executive 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.

• Decision to formally constitute a Sustainability Committee as

a sub-committee of the Board.

• 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.

• Approval of the share buyback programme.

• Receiving presentations from the four Regional Chairs 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 FY24 from the Better with

Bellway Leadership Team.

• Approval of the Better with Bellway strategy.

• Approval of the Self-Remediation Terms with the

Department for Levelling Up, Housing and Communities

in relation to historical fire safety issues and

Welsh Government.

• 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 2022.

• Approval of the Annual Report and Accounts for 2021/22.

• Approval of the preliminary announcement, interim results

and trading updates.

• Recommending the final dividend for 2021/22 to be

approved by shareholders.

• Approval of the interim dividend for 2022/23.

• Defence document review and meeting with

corporate advisors.

• Crisis protocol review.

• Approval of HR (including Equality, Diversity and

Inclusion)KPIs.

• Reviewed and assessed the Group’s cyber controls,

basedon best practices for securing systems and data.

• Receiving regular updates on legacy apartment schemes

where fire safety improvements may be required or where

works are planned or underway.

109Bellway p.l.c. Annual Report and Accounts 2023

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.

An external board evaluation was conducted in July 2023.

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 Chair 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 Chair, 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 Sarah Whitney, 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,

Remuneration Committees, and Sustainability Committee.

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.

The Sustainability Committee was formally constituted during

the year, as a sub-committee of the Board, and consists

of the Non-Executive Directors and the Group Finance

Director, withthe responsibility for sustainability including

environmental, social and governance (‘ESG’) matters relating

to the Group and overseeing the performance of the Better

with Bellway strategy.

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

onone occasion to review the fees and terms of appointment

of the Non-Executive Directors (excluding the Chair) and

received advice from the Group General Counsel and

Company Secretary and external remuneration consultants

when required.

Division of Responsibilities continued

Governance

110 Bellway p.l.c. Annual Report and Accounts 2023

Composition, Succession and Evaluation

Board Evaluation

In line with the UK Corporate Governance Code, we undertake

aformal and rigorous annual evaluation of our own performance

and that of our Committees and individual Directors. We operate

a three-year cycle of internal and externally facilitated reviews.

Bellway’s last externally facilitated evaluation took place in

2020, and for 2023 we appointed Trusted Advisors Partnership

(‘TAP’), aspecialist consultancy which has no other business

or connection to the Group or individual directors, to facilitate

the evaluation.

Having been provided with a comprehensive briefing by the

Chair and Group General Counsel and Company Secretary,

TAP conducted an evaluation process in July2023,involving:

Board evaluation cycle

Internal evaluation facilitated by the Chair.

External evaluation facilitated by TAP.

Year 1

Year 2

Year 3

Board evaluation process

Stage 1 Stage 2 Stage 3

Reviewing Main Board and Chair’s

questionnaires and the Chair’s and

SID’s concluding memo from the

internal 2022 review, together with

the concluding report from the last

external evaluation in 2020.

Also reviewed the Board and

Committee papers to help

understanding of how they operate.

Conducted a set of individual virtual

meetings with each Board member

and the Group General Counsel and

Company Secretary.

TAP reviewed the Board and its

Committees’ effectiveness to fulfil

itsduties considering:

a) Board structure, capability

and performance.

b) Quality of Board discussion

and review to support the

delivery of Bellway’s sustainable

growth strategy.

Produced a report of findings and

key area’s following the evaluation,

andfed back to the Board.

The evaluation concluded

that the Bellway p.l.c.

Board was well constituted with a

cohort of experienced, capable,

and engaged Non-Executive and

Executive Directors.

Board evaluation 2021/22 update

Action point Progress

The Board should give consideration to its formal objectives

and regularly appraise itself against them.

Strategic progress has been added as a standing agenda item.

To further consider Board and Committee membership in

linewith the Parker Reviews recommendations.

The Board has approved the appointment of an additional

Non-Executive Director and recruitment is underway.

Further promote greater interactions between senior

managers and the Board to better understand

currentchallenges.

Senior Managers will continue to present updates to

the Board. In addition the Board has held meetings at

divisional offices and held site visits to increase interactions.

111Bellway p.l.c. Annual Report and Accounts 2023

Governance

Nomination Committee Report

Composition, Succession and Evaluation

Membership and meeting attendance

Director Date appointed to theCommittee

Number of

meetings

attended during

theyear

John Tutte

(Chair)

1 March 2022, appointed

Committee Chair on1April

2022

2/2

Denise Jagger 1 August 2013,

Resigned 16December 2022

1/1

Jill Caseberry 1 October 2017 2/2

Ian McHoul 1 February 2018 2/2

Sarah Whitney 1 September 2022 2/2

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, continue to develop the succession plan for

those immediately below Board level.

Focus areas for 2023/24

• To focus on Board succession.

• To continue our work to improve diversity across the Group.

• With support from the Executive Management Team and

Group HR, continue to develop the succession plan for

those immediately below Board level.

Responsibilities and terms of reference

The main areas of the Nomination Committee’s

(the‘Committee’) responsibilities are:

• To review the structure, size and composition of the

Board, in accordance with the Board’s Diversity Policy,

and recommend to the Board any changes it considers

appropriate. This encompasses membership of the

Board Committees and the reappointment, if appropriate,

ofNon-Executive Directors at the end of their term of office.

• To consider succession planning not only within the

Board but also immediately below Board level and ensure

appropriate plans are in place.

• To identify candidates to fill Board vacancies and nominate

these to the Board for approval. Appointments to the Board

are made on merit using a formal, rigorous and transparent

process against objective criteria recommended by

the Committee. These criteria take into account the

skills, knowledge and experience of existing members

of the Board and the importance of diversity, in all its

aspects, within the Board. The Committee is aware of

the recommendations of the Parker Reviews, the FTSE

Women’s Leaders Review and the FCA disclosure rules, 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

of the 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

ofthe Board.

The Committee meets at least twice a year and operates

under its own terms of reference. These have been agreed

by the Board and are available at www.bellwayplc.co.uk/

investor-centre/governance/committees.

The members of the Committee are shown in the table to

the left.

Activities in 2022/23

• 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 succession planning.

The Committee will continue to work towards increasing the

diversity of the current Board.

• Appointment of a new Senior Independent Director in

December 2022, taking into account the recommendations

of the FTSE Women’s Leaders Review and the FCA

disclosure rules.

• Consider the appointment of an additional Non-Executive

Director, to comply with the requirements of the Parker

Reviews, the FTSE Women’s Leaders Review and the FCA

disclosure rules.

• Planning for Board succession while considering the

importance of gender and ethnic diversity, and the current

UK recommendations.

The Committee recognised the importance

of gender and ethnic diversity as part of the

succession planning.”

John Tutte

Chair of the Nomination Committee

Governance

112 Bellway p.l.c. Annual Report and Accounts 2023

• Continued our work to improve diversity across the

Group, taking into account the recommendations from the

Parker Reviews and the FTSE Women’s Leaders Review.

Building on the success of the 2022 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.

• Presentation from the Group HR Director on initiatives

to improve inclusion across the Group, including new

strategies and key targets up to 2025, implementationof

new governance structures, inclusivehiring training,

accreditation through Clear Assured, the comprehensive

schools and colleges engagement programme and

improved engagement withsupply and contract partners.

• 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 HR function.

• Equality, diversity and inclusion e-learning continues to

be issued to employees and forms part of the mandatory

training a new employee must undertake. 73% of

employees have completed this training within three

months of joining Bellway.

• Partnering with external charities and organisations to

promote diversity and inclusion throughout Bellway.

• 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 2023/24

• To continue our work to improve diversity across the Group,

taking into account the recommendations from the Parker

Reviews, the FCA Diversity and Inclusion Policy Statement,

and the FTSE Women’s Leaders Review.

• In line with the recommendations of the FCA Diversity and

Inclusion Policy Statement, as well as those of the Parker

Reviews, and The FTSE Women’s Leaders Review Diversity

recommendations, continue to investigate the appointment

of an additional Non-Executive Director to the Board.

• To continue to develop the succession plan for those

immediately below Board level.

Director and employee profile

The following tables show the gender and ethnicity split in the

Group as at 31 July 2023. Ethnic diversity was reported for the

first time in 2021. More detail on the Group’s efforts to improve

diversity can be found on pages 46 and 47:

Male

No.

Male

Female

No.

Female

Total

No.

Total

Board of Directors 4 67 2 33 6 <1

Executive Committee

and direct reports 12 63 7 37 19 <1

Senior managers 131 81 31 19 162 5

Other employees 1,900 68 892 32 2,792 94

Total 2,047 69 932 31 2,979 100

Asian or

Asian British

Black or

Black British

Mixed/ Multiple

Ethnicity

Other

Ethnic/ Arab

White British/

European/Non-

European

Any other

ethnic group

Prefer not

tosay

Board of Directors – – – – 6 – –

Executive Committee and direct reports – – 1 – 18 – –

Monthly paid employees 62 30 21 6 2,134 4 18

Weekly paid employees – 14 3 – 656 1 5

Total 62 44 25 6 2,814 5 23

John Tutte

Chair

16 October 2023

113Bellway p.l.c. Annual Report and Accounts 2023

Governance

Audit Committee Report

Membership and meeting attendance

Director

Date appointed to

theCommittee

Number of

meetings

attended during

theyear

Ian McHoul

(Chair)

1 February 2018,

appointed Committee

Chair on 12

December 2018

3/3

Denise Jagger 1 August 2013, resigned

16 December 2022

1/1

Jill Caseberry 1 October 2017 3/3

Sarah Whitney 1 September 2022 3/3

Statement from the Chair of the Audit Committee

I am pleased to present our report to you as Chair of the

Audit Committee. This report provides an overview of how

the Committee operates, an insight into the Committee’s

activities during the year and its role in ensuring the integrity

of the Group’s financial statements and effectiveness of audit,

risk and internal controls. We have worked closely with our

finance, and risk and internal audit teams, along with Ernst &

Young LLP (‘EY’), our external auditor, throughout the year.

The Committee met three times during the year and the

attendance by Committee members can be seen above.

Key areas of focus during the year

As detailed in last year’s report, I set out our focus areas for

this year and I’m pleased to provide an update on these:

• Ensure the Group has appropriate internal audit resource

– we discussed the internal audit team resource when

reviewing the Internal Audit Plan for the year ahead

and re-visited this at every meeting to ensure resource

remained appropriate. The resource levels will continue

to be subject to regular review given the changing

regulatory environment.

• Continue to assess significant risk and profit items for the

Group – this was discussed at both the March and October

meetings before the Interim Accounts and Annual Report

and Accounts were recommended to the Board for

approval. As part of this review, the Committee dedicated

a significant amount of time challenging the assumptions

and methodology used in calculating the legacy

building safety provision, along with the disclosure in the

financial statements.

• Ensure that the Group continues to have the appropriate

disclosures as required by the TCFD in the 2023 Annual

Report and Accounts – the process underlying the TCFD

disclosures has been reviewed by management and an

update presented to the Committee. It is anticipated that

the reporting will continue to evolve in future years.

An additional focus area of the Committee during the year

was the Department for Business, Energy & Industrial Strategy

(‘BEIS’) consultation on Restoring Trust in Audit and Corporate

Governance. In advance of requirements becoming effective,

we have reviewed management’s update in relation to

progress to date. We will continue to monitor progress against

our plan, which includes formal documenting and testing

(design and operational effectiveness) of controls for IT,

entitylevel and material financial processes.

Anticipated key areas of focus for the year ahead

• BEIS consultation – we will continue to monitor changes

in legalisation and the UK Corporate Governance Code

resulting from the initial BEIS and subsequent Financial

Reporting Council (‘FRC’) consultation process. In addition,

we will monitor progress made by management against

their strategy for formally documenting and testing the

aforementioned controls.

• IT security – we will receive an update from the Group

IT Director in relation to the Group’s IT infrastructure and

operating environment.

• TCFD reporting – we will review the Group’s improved

disclosures in relation to TCFD in relation to the 2024

Annual Report and Accounts.

• Legacy building safety provision – we will continue

to review this provision to ensure the approach and

assumptions are appropriate as more detailed information

becomes available.

• Audit Committees and the External Audit: Minimum

Standard – we are working to early adopt the requirements

contained in the FRC report issued in May 2023.

This report provides an overview of how

the Committee operates, ... and its role

in ensuring the integrity of the Group’s

financial statements and effectiveness

ofaudit, risk and internal controls.”

Ian McHoul

Chair of the Audit Committee

Governance

114 Bellway p.l.c. Annual Report and Accounts 2023

Other information

Our external auditor, Ernst & Young LLP (‘EY’) continues to

provide robust challenge to management and provides its

independent view to the Committee on specific financial

reporting judgements and the control environment across

the Group.

Every three years the Board appoints an external organisation

to perform an independent review of the Committee to

evaluate its performance. In the current year the performance

was performed externally, and this concluded that the

Committee was effective and provides a robust and

independent challenge, underpinned by professional respect

from all attendees.

Committee governance and competence

In September 2022, Sarah Whitney joined the Committee,

which subsequently comprised four independent non-

executive directors. In December 2022 Denise Jagger

stepped down from the Committee when she retired from

the Board, taking the Committee membership to three non-

executive directors. Throughout the period the Committee

members had significant and diverse experience, and I

believe that between us we have an appropriate and relevant

combination of experience and knowledge.

I am a Chartered Accountant, currently Chair of Videndum

plc, and Chair the Audit Committee and am a member of

the Remuneration 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 102 and 103.

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 Chair of the Board, Group Chief Executive, Group

Finance Director, Group General Counsel and Company

Secretary, Group Financial Controller and Group Risk Director

attend meetings by invitation. The Committee is supported by

the Deputy Group Company Secretary who acts as Secretary

to the Committee.

Representatives of EY attended all meetings during the year

and they, along with the Group Risk Director, also met with

the Committee independently of management. Any matters

raised during discussions with the external auditors and the

Committee were discussed appropriately with executive

management. 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.

Committee purpose and responsibilities

The Committee supports the Board in achieving the objectives

of the corporate governance framework, with its principal

activities focused on:

• the integrity of financial reporting;

• the quality of narrative reporting;

• the quality and effectiveness of internal controls and risk

management systems;

• procedures relating to the prevention and detection

offraud and bribery;

• risk and internal audit; and

• external audit.

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.

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. This was externally facilitated and 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.

115Bellway p.l.c. Annual Report and Accounts 2023

Governance

Committee activities during the year

The activities undertaken at the October 2023 meeting concluded the Committee’s activities in relation to the Group’s financial

reporting for the year ended 31 July 2023.

The main activities performed by the Committee at these meetings are described below:

Meeting date

Activity / review

October

2022

January

2023

March

2023

October

2023

Financial reporting

Reviewed the final draft of the Annual Report and Accounts, together with a report

produced by EY which detailed their findings both on areas of key financial reporting

matters and other areas of audit focus.

Reviewed the final draft of the Interim Announcement.

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 period and provided challenge of the treatment of these.

Considered and challenged a paper produced by management setting out the

accounting approach used for the SRT and associated review provision and

related expense. This consisted of understanding the approach taken in identifying

apartment blocks dating back to April 1992 that could fall within the scope of the SRT,

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, including considering a sensitivity paper,

and believed management’s proposed assumptions to be appropriate.

Considered and challenged a paper produced by management setting out the

accounting approach used for the structural defects provision and related expense.

This consisted of understanding the technical background of the issue, the basis of the

cost estimate, inflation and discounting assumptions along with ensuring the associated

disclosures are clear and understandable. The Committee challenged management’s

cost and inflation assumptions, and believed management’s 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, discussed, and challenged a paper produced by management setting

out the rationale for preparing the Annual Report and Accounts and the Interim

Announcement on a going concern basis. The paper incorporated a sensitivity analysis

based on the Group’s internal forecasts.

Reviewed a paper produced by management setting out a proposed change to the

inventory accounting policy to incorporate promotion agreements following the

acquisition of two companies that hold such assets.

Narrative reporting

Concluded that the 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 Annual Report and Accounts to the Board for approval.

Reviewed the draft viability statement to appear in the Annual Report and Accounts,

together with the supporting assumptions and financial forecasts.

Reviewed a paper setting out the TCFD disclosure requirements and how they have

been satisfied by Bellway.

Audit Committee Report continued

Governance

116 Bellway p.l.c. Annual Report and Accounts 2023

Meeting date

Activity / review

October

2022

January

2023

March

2023

October

2023

Internal control and risk management systems

Reviewed and approved the Slavery and Human Trafficking Statement.

Reviewed compliance with the Group policies in the period.

Reviewed a paper produced by management setting out proposed changes to the

journals accounting policy.

Reviewed the BEIS project delivery plan.

Reviewed a paper setting out the effectiveness of the internal control and risk

management framework during the year.

Reviewed and approved the Group’s Corporate Criminal Offence policy and

riskassessment.

Prevention and detection of fraud

Reviewed a paper produced by management setting out the main controls for

preventing and detecting fraud.

Reviewed the Group’s policies and procedures in relation to Whistleblowing,

Anti-Bribery and Corruption, Anti-Slavery, Data Protection and Anti-Money Laundering.

Risk and internal audit

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.

Held a private meeting with the Group Risk Director.

Reviewed the Risk Management Policy.

Reviewed the Internal Audit Charter and provided feedback on the proposed 2023

Internal Audit plan.

External audit

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.

Challenged EY’s audit plan, including the proposed Group, subsidiary, and divisional

materiality for the 2023 audit.

Reviewed the Independent Auditor Policy.

Held a private meeting with EY.

Approved the Recruitment of Auditor Staff Policy.

Reviewed a report produced by management setting out the requirements of the FRC

report ‘Audit Committees and the External Audit: Minimum Standard’ and agreed a

strategy of how the Group will early adopt the requirements.

Governance

Considered the findings of the performance evaluation of the Committee.

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.

117Bellway p.l.c. Annual Report and Accounts 2023

Governance

Integrity of financial reporting

Significant financial reporting matters

The table below sets out the matters considered and the action performed by the Committee during the year in relation

tothesignificant financial reporting matters of the Group.

Key financial matters

Information provided

by management

Procedures performed by the

external auditor

Committee assessment

and conclusion

Revenue recognition

Matter considered

Revenue of £3,406.6 million has

been recognised in the year.

The majority of housing revenue

is recognised on a point in time

basis either i) when the completed

dwelling is transferred to the

customer; or ii) when the home

is build complete and all material

contractual obligations have been

satisfied. For a small number of

contracts, revenue is recognised

over time from the point that the

land is irrevocably transferred to

the customer.

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:

• reviewed the

appropriateness

of the Group’s

revenue recognition

accounting policy;

• used data analytics to

identify any anomalies,

which were investigated;

• reviewed internal audit

work in relation to

salescut-off;

• agreed a sample of legal

completions to source

documentation; and

• reviewed any

manual journals.

The Committee understood

the Group’s revenue

recognition policy.

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

£2,719.3 million has been recognised

on housing and other revenue.

Cost of sales for completed housing

sales is recognised based on the

latest whole site/phase margin,

which is derived as part of the

site/phase valuation process.

These valuations are updated

frequently throughout the life of

the site/phase and include both

actual and forecast selling prices,

land costs and construction costs.

The forecast costs and revenues

are estimates and are inherently

uncertain due to potential changes

in market conditions.

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:

• reviewed the

appropriateness

of the Group’s

margin recognition

accounting policy;

• attended valuation

meetings;

• performed Group-wide

analytical reviews; and

• challenged assumptions

in relation to forecast

selling prices and costs.

The Committee understood

the Group’s gross profit

recognition policy.

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 gross

profit recognition policy is

appropriate and has been

properly applied in these

financial statements.

Audit Committee Report continued

Governance

118 Bellway p.l.c. Annual Report and Accounts 2023

Key financial matters

Information provided

by management

Procedures performed by the

external auditor

Committee assessment

and 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 2023 had a book value

of £4,440.4 million. The carrying

value of land and work in progress

is affected by both the revenue

recognition and gross 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.

Management set out

details of the land

and work in progress

impairment review process

and the outcome of this.

Management provided

a summary of this work

which was considered by

the Committee.

The external auditor

explained to the

Committee they had:

• reviewed land with

either internal or external

impairment indicators

and discussed these

with management; and

• performed enquires

with management.

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.

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.

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.

Management produced

a paper 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.

This showed that the

Group could continue

to meet its liabilities as

they fall due during the

review period.

The external auditor

explained to the

Committee they had:

• reviewed and

challenged the Group’s

assessment of going

concern and obtained

an understanding of

significant assumptions;

• understood the

assumptions relation to

adoption of the Future

Homes Standard;

• challenged the Group’s

downside and reverse

stress testing scenarios;

• reviewed the effect of

the various scenarios

on debt headroom

and covenants;

• recalculated debt

covenants; and

• considered the accuracy

of previous forecasts.

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.

Further details in relation to

the Group’s going concern

and viability assessment can

be found on pages 77 and 78.

119Bellway p.l.c. Annual Report and Accounts 2023

Governance

Key financial matters

Information provided

by management

Procedures performed by the

external auditor

Committee assessment

and conclusion

Legacy building safety improvement provision

Matter considered

Legacy building safety improvement

provision totalling £508.2 million was

recognised in the balance sheet as

at 31 July 2023.

There are two components of the provision as set out below:

SRT and associated review

The Committee reviewed

a paper setting out the

IAS 37 requirements for

recognising a provision,

and how this applies

following the signing of the

SRT in March 2023 and the

Pact in May 2023.

The paper set out the

approach taken in

identifying apartment

blocks dating back to April

1992 that could fall within

the scope of the SRT,

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

that management’s

proposed assumptions

are appropriate.

The external auditor

explained to the

Committee they had:

• reviewed the

completeness of

the Group’s model

capturing the potential

developments that fall

under the scope of

the SRT;

• reviewed the detailed

cost estimates;

• challenged assumptions

relating to cost inflation,

timing of spend and the

discount rate; and

• reviewed the disclosures

in relation to the

legacy building safety

improvement provision.

Overall

Following a review of these

papers and challenge of

management and the external

auditor, the Committee

concluded that the legacy

building safety improvement

provision consisting of (i)

SRT and associated review,

and (ii) structural defects,

heldin the balance sheet and

the associated disclosures

are appropriate.

Structural defects

The Committee reviewed

a paper setting out the

background of the issue,

how the risk has been

quantified, inflation and

discounting assumptions

along with ensuring the

associated disclosures are

clear and understandable.

The Committee challenged

management’s cost and

inflation assumptions,

and concluded

that management’s

proposed assumptions

are appropriate.

The external auditor

explained to the

Committee they had:

• reviewed the detailed

cost estimates;

• challenged assumptions

relating to cost inflation,

timing of spend and the

discount rate; and

• reviewed the disclosures

in relation to the

legacy building safety

improvement provision.

Audit Committee Report continued

Governance

120 Bellway p.l.c. Annual Report and Accounts 2023

Key financial matters

Information provided

by management

Procedures performed by the

external auditor

Committee assessment

and conclusion

Net legacy building safety expense disclosure

Matter considered

A pre-tax net legacy building

safety expense of £49.6 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.

Management produced

a paper setting out

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.

This paper used the above

framework, which set out

the treatment of whether

the net legacy building

safety expense should

be disclosed separately.

The paper ensured the

principles agreed in the

previous year had been

consistently applied.

The external auditor

explained to the

Committee they had:

• reviewed the disclosures

in relation to the

legacy building safety

improvement expense.

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.

Long-term 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 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.

Accounting policies

The Committee received a report from management in

relation to an updated accounting policy for inventory

following two corporate acquisitions, one in FY22 and

one in FY23. These corporate acquisitions resulted in the

Group having promotional agreements which were not

covered by the previous policy. Following discussions with

management and EY, the Committee approved the updated

accounting policy.

121Bellway p.l.c. Annual Report and Accounts 2023

Governance

Quality of narrative reporting

2023 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 2023 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 2022

Annual Report and Accounts has been reflected.

In addition, the Committee performed a comprehensive

review of the Annual Report and Accounts considering items

is shown in the table below.

The Committee concluded that the 2023 Annual Report

and Accounts, when taken as a whole, is fair, balanced

and understandable.

ESG and climate risk considerations

ESG and climate risks are considered by the Board due

to their importance, although the associated disclosure

requirements, 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 a road map for climate risk disclosures relating to

its Annual Report and Accounts. This, along with updates from

EY throughout the year, has enabled the Committee to review

and assess the disclosures included in the 2023 Annual

Report and Accounts.

Quality and effectiveness of internal controls and

risk management systems

The Committee is responsible for reviewing and assessing

the Group’s internal controls and risk management systems

and providing guidance on these to the Board. The Board is

responsible for reviewing the effectiveness of the system of

internal controls.

Throughout the year the risk register for the Group has been

reviewed and updated by management 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

The internal control and risk management process only

reduces the risk of material misstatement or loss and does 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, legal and regulatory

compliance, and climate change.

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.

Audit Committee Report continued

Fair Balanced Understandable

The Annual Report and Accounts

provide a comprehensive review of the

Group’s strategy and activities during

the year which is consistent 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

results and performance.

The key accounting judgements

considered by the Committee are

appropriately disclosed and are

consistent with those considered by EY.

There are clear links between the

strategy and KPIs.

Market conditions are clearly described,

and 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 in the methodology.

All material transactions and issues

faced by the Group are included within

the financial statements and disclosed

whererequired.

Governance

122 Bellway p.l.c. Annual Report and Accounts 2023

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 Chairs 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

Chairs. The executive directors attend certain divisional

board meetings on a regular basis during the year, and this

is supplemented with Regional Chair visits to divisions.

Review Focus and outcomes

Legal completions

(half-year and year-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 FY23, this work provided positive assurance that the processes operate effectively and

prevent the occurrence of cut-off issues.

Divisional compliance

15 reviews

These reviews assess whether the design and operation of accounting, land acquisition

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

progress review

1 review

This review assessed progress made with regard to the recommendations raised in the 2022

building safety risk assessment, which were intended to further strengthen the Group’s policies,

training and audit arrangements over fire safety.

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 FY23, administrative improvement opportunities were identified.

Better with Bellway

risk assessment

1 review

This risk assessment offered a number of recommendations to further strengthen the Group’s

monitoring and achievement of the Better with Bellway sustainability strategy.

Document retention

risk assessment

2 reviews

This risk assessment offered a number of recommendations to help drive the secure and

consistent retention of documents in line with Group policy.

Modern slavery –

subcontractors

10 site visits

This work included an audit of trades at 10 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.

• Site/phase valuations are produced periodically throughout

the life of a site/phase, with a summary of the actual and

forecast costs and revenues produced at a divisional level

prior to review by the divisional management team and

Head Office team.

• Regular visits to sites by in-house health and safety teams

and external consultants to monitor health and safety

standards and performance.

• A central treasury function operates at Head Office ensuring

the appropriate financing is obtained for the Group as

a whole.

• A number of the Group’s key functions are dealt with

centrally. These include taxation, pensions, insurance, IT,

legal, HR, regulatory compliance and company secretarial

functions. This centralisation ensures a consistent approach

and the appropriate range of skills to manage these

specialised areas.

Throughout the year, the Committee received reports

from the Group Risk and Audit team on the following areas

of focus:

123Bellway p.l.c. Annual Report and Accounts 2023

Governance

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

tothe 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 Internal 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

where appropriate. 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.

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

previous 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 20 July 2022, following their inspection of audit firms

including EY. This included understanding whether any of

the findings would have affected the Bellway audit;

• an understanding of the Audit Quality Review (‘AQR’) and

internal EY quality review findings, specifically in relation to

the engagement partner, Mark Morritt;

• considering EY’s independence, objectivity, and

professional scepticism;

• reviewing the performance of EY against their audit strategy

for the 2021/22 financial year, the most recent completed

audit cycle, and their interaction with the Committee during

the process; and

• 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.

Audit Committee Report continued

Governance

124 Bellway p.l.c. Annual Report and Accounts 2023

Auditor independence and non-audit fees

The Independent Auditor Policy, which seeks to preserve the

independence of the external auditor by defining those non-

audit services which the external auditor may and may not

provide, was reviewed during the year.

Any engagement with the external auditor needs to be

approved, in advance, by the Audit Committee.

The Group’s external auditor is only engaged to provide

statutory audit services.

For an analysis of fees paid to EY see note 4 to the accounts.

The ratio of non-audit fees for the year to the external audit

fee was 0:1. The Committee considers EY to be independent

and EY, in accordance with professional ethical standards,

provided the Committee with written confirmation of

its independence throughout the year. The Committee

monitors all fees paid to the external auditor at each

Committee meeting.

The Group has a policy which includes certain restrictions on

the recruitment of employees from the external auditor.

The Committee confirms there are no independence issues

in relation to the external auditor and that these policies have

been adhered to throughout the year.

Ian McHoul

Chair of the Audit Committee

16 October 2023

125Bellway p.l.c. Annual Report and Accounts 2023

Governance

Remuneration Report

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 2022/23 financial year, which will be subject to a single

advisory shareholder vote at the forthcoming AGM.

Performance and reward in 2022/23

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 set of results, consistent with

its announcements to the market. The number of housing

completions fell by 2.3% to 10,945 (2022 – 11,198), underlying

operating profit fell to £543.9 million

(2,3)

(2022 – £653.2 million).

Underlying earnings per share fell by 22.0% to 328.1p

(2,3)

per

share (2022 – 420.8p) and underlying RoCE fell to 15.8%

(2,3)

(2022 – 19.4%).

The Company has awarded the Executive Directors a

bonus payment of 25.06% of basic salary, however, the

long-term incentive plan awarded in November 2020 will

not vest based on performance over the three financial

years to 31 July 2023. The Committee considers that the

bonus outcome is reflective of the performance, during

challenging macro economic conditions, of the Group and

the Executive Directors during the 12-month period to 31 July

2023. Whilst zero vesting is disappointing for the executives,

theCommittee determined that there was no reason to

exercise its powers of discretion in relation to the LTIP

outcome, which were considered to be in line with the overall

Company performance during the performance period.

As previously noted, the pension rates for the Directors were

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.

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 FY22 bonus he received 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, EPS, carbon and waste reduction performance

conditions are met over the period to 31 July 2025, with any

shares delivered being subject to a further two-year holding

period. Details of these awards are set out on pages 134 and

135. This grant was intended to be over shares with a value

of 200% of salary. However, as we announced at the time,

recognising the 39.7% fall in share price that had taken place

from the time of the 2021 grant, the Committee scaled back

the grants by 30% of salary.

How we will implement the Remuneration Policy in 2023/24

There will be a 3.5% increase to the Executive Directors’

salaries in 2023/24 which is lower than the level of

average increase to the workforce in general, given the

challenging inflationary environment. All other benefits

remain unchanged.

Within the bonus plan, we have been reviewing whether the

profit, land bank and ESG measures are suitable for the year

ahead and concluded that some modest changes should be

made. We felt that an additional financial measure of adjusted

capital employed would strengthen the focus on the efficient

use of capital. We have moved the customer service measure

to the long term and have introduced an element focused on

developing our plans to reduce carbon within our building

process. Details are set out on pages 134 and 135.

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

Governance

126 Bellway p.l.c. Annual Report and Accounts 2023

In the long term incentive plan, we are increasing the

weighting and therefore focus on margin protection rather

than setting absolute EPS targets. We are also increasing

the weighting on relative TSR so it accounts for half of the

opportunity. There are also some changes within the 20%

that is allocated to ESG measures. In particular, we are making

customer satisfaction a long term rather than annual bonus

measure and incentivising scope 3 carbon reduction over

a 3 year period to complement the annual bonus element.

Details of these changes are set out on pages 134 and 135.

These changes better align management’s incentives with

our current business strategy and also apply to long-term

incentives granted to our senior managers.

Health and safety performance will be taken into account

as part of the Committee’s overall assessment of the

bonus payment, which it does every year before making a

final determination.

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.

Environmental

As referred to above, we are making changes to the

measures we are going to be using for the bonus and long-

term incentives.

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 had an eight-year delivery period in 2022 we

set a threshold target that equals 3/8ths of the 46% reduction

(17.3% reduction by 2025). This created a straight line between

2022 and 2030 for the achievement of our goal. A stretch

target of a 25% reduction was set to incentivise earlier delivery

of the total 46% reduction. Rather than set targets that extend

this by a year, we felt it would be better to focus management

on achieving a reduction in scope 3 emissions.

Scope 3 emissions – Making material changes to the amount

of carbon generated within the housebuilding process,

whichmakes up 99% of our carbon footprint, will take

a number of years to make. Our focus is to develop less

carbon intensive building processes, likely through timber

frame construction. Accelerating this process will require

considerable management time and focus and we feel

that it warrants prioritization through incentivisation over

both the next year and the next three years. The way the

Committee assesses this measure will differ for each element

of remuneration, bonus and long-term incentive plan, so that

the same performance is not being rewarded for twice.

Waste reduction – We have set ambitious goals for reducing

waste in each housing unit built by 20% by 2025 from a

starting point of 8.90 tonnes (measured in July 2021). In 2022,

we set a threshold to stretch range of reducing waste by

17.5% to 22.5% (1.56 to 2.0 tonnes) per housing unit in FY25.

Rather than set targets that extend this by a year, we felt

it would be better to focus management on achieving a

reduction in scope 3 emissions.

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

2022 AGM with around 96% voting for the Annual Report

on Remuneration and we hope you are supportive of the

approach we have taken and will support the resolution

approving this report at the 2023 AGM.

Jill Caseberry

Chair of the Remuneration Committee

16 October 2023

127Bellway p.l.c. Annual Report and Accounts 2023

Governance

Remuneration at a glance

How remuneration links to our strategy

(See pages 10 to 13 for details of our performance).

Strategic objective Link to remuneration Metric Performance against metric

Earnings growth and driving

down costs

Annual bonus and future long-

term incentive plan awards

Underlying operating profit Not achieved

Volume growth and focus on

RoCE

Annual bonus Sufficient land bank of plots

with DPP

Achieved

Customer First Annual bonus Retain 5-star

homebuilderstatus

Partly achieved

Customer First Annual bonus Overall customer

satisfactionscore

Not achieved

Employee Engagement Annual bonus Results of Employee

Engagement Survey

Not 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

The Committee set ambitious targets which have been challenging to achieve in a tough economic environment which has

impacted all elements of the business, this is reflected in the outcomes highlighted above.

0 £200,000 £400,000 £600,000 £1,200,000£1,000,000£800,000

Fixed pay total Annual bonusOther items

82%

82% 17%

17%

Chief

Executive

Group

Finance

Director

£1,088,625

£667,896

How our executive directors were paid during 2022/23

Bonus outcomes – see page 130

The 2022/23 bonus was based on financial and strategic targets.

Strategic objective

Weighting

(%ofsalary)

Threshold

(25% pays out)

Maximum value

(100% pays out)

Actual

(a)

Payment

(% of maximum)

Payment

(% of salary)

Operating profit (underlying) 80.0% £600m £720m £543.9m 0% 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

homebuilder status.

The Group’s ‘Recommend a Friend’ score in 2023 was 92.3% compared

with the base of 90.0%

Partly achieved – 5.06% of

salary awarded

The Group’s 9-month customer satisfaction score in 2023 was 80.5%

compared with the base of 82.0%.

Not achieved – no award

Employee

Engagement

The Group’s employee engagement score in 2023 was 79.3% compared

with the base of 87.5%.

Not achieved – no award

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 the net legacy building safety expense. This removes any

incentive to delay or reduce spending on life-critical fire safety remedial works.

Remuneration Report continued

Governance

128 Bellway p.l.c. Annual Report and Accounts 2023

LTIP outcomes – see page 131

The PSP awards granted in 2020/21 were based on a three-year TSR performance for the period to 31 July 2023.

Metric Performance condition Threshold target Stretch target Actual % Vesting

50% of

awards

Relative TSR against an index of peer

housebuilders

4.1% TSR

(median)

26.6% TSR

(median +22.5%)

-3.3%

Bellway TSR

50% of

awards

Relative TSR against the FTSE 250

(excluding financial services companies

andinvestmenttrusts)

Rank 69

(median)

Rank 35

(upperquartile)

Rank 77

Bellway

Total 0%

Annual Report on Remuneration

Committee membership and activity

The Committee met five 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

attendedduring the year

Jill Caseberry (Chair) 1 October 2017

(appointed as Committee Chair on 13 December 2017)

5/5

John Tutte 1 March 2022 5/5

Denise Jagger 1 August 2013

(resigned 16 December 2022)

2/2

Ian McHoul 1 February 2018 5/5

Sarah Whitney 1 September 2022 5/5

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 £70,287 (2022 – £40,963) 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 Chair) 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 2022/23

• 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.

• Approve the long-term incentive awards vesting levels for the 2022/23 year for the Executive Directors and the Group

General Counsel and Company Secretary.

• Approve the 2022/23 financial year bonus payments 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.

• Make awards under the long-term incentive scheme.

• Engage with employees on executive remuneration through the Employee Listening Groups.

129Bellway p.l.c. Annual Report and Accounts 2023

Governance

Focus areas for 2023/24

• 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.

• Approve the long-term incentive awards vesting levels for the 2023/24 year for the Executive Directors and the Group

General Counsel and Company Secretary.

• Approve the 2023/24 financial year bonus payments for the Executive Directors and the Group General Counsel and

Company Secretary.

• Approve the 2022/23 Remuneration Report.

• Set the bonus targets for the 2023/24 year.

• Make awards under the long-term incentive scheme.

• Engage with employees on executive remuneration through the Employee Listening Groups.

Implementation of Remuneration Policy in 2022/23

The auditor is required to report on the information contained in the following part of this report, as noted on the relevant sections.

Salary for the year ended 31 July 2023

For 2022/23, Jason Honeyman received a salary of £739,490 and Keith Adey received a salary of £451,259.

Annual bonus for the year ended 31 July 2023

The annual bonus is payable in November 2023 for performance during the year ended 31 July 2023. The performance targets

for the 2022/23 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

(%ofsalary)

Threshold

(25% pays out)

Maximum value

(100% pays out)

Actual

(a)

Payment

(% of maximum)

Payment

(% of salary)

Operating profit (underlying) 80.0% £600m £720m £543.9m 0% 0%

Underlying operating profit including our share of joint ventures fell by 16.7% to £543.9 million which is below the 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

homebuilder status (as measured by the HBF). Maximum –

7.5% of salary

We retained our 5-star

homebuilder status. The Group’s score in 2023 was 92.3%

compared with the target range of 90.0% (2.5% of salary) to 94.5% (7.5% of salary).

Partly achieved –

5.06% 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 82.0%, with an additional

bonus opportunity on a straight-line basis for further improvement in the score, up to

a maximum of 7.5% of salary for a score of at least 83.0%.

Maximum –

7.5% of salary

The Group’s 9-month customer satisfaction score in 2023 was 80.5%. Not achieved –

No award

Employee

Engagement

Employee engagement scores (as measured by the July 2023 employee survey).

Athreshold payment of 2.5% of salary would be triggered for a threshold score

of 87.5%, with an 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 90.0%.

Maximum –

5% of salary

The Group’s employee engagement score in 2023 was 79.3% compared with the

target range of 87.5% to 90.0%.

Not achieved –

No award

Notes:

a. For underlying operating profit and land bank bonus purposes, targets and outcomes includes our share of joint ventures.

b. The 2021/22 base target was set at 12,250 plots with a maximum target of 12,800 plots. The actual performance achieved was 12,825 plots.

Remuneration Report continued

Governance

130 Bellway p.l.c. Annual Report and Accounts 2023

The Committee also set a minimum level of operating profit of £520m that had to be achieved for any bonus to be capable of

being earned. This minimum hurdle was achieved. 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 2023

The PSP awards granted in 2020/21 were based on a three-year TSR performance for the period to 31 July 2023. The applicable

vesting percentages were 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.).

4.1% TSR

(median)

26.6% TSR

(median +22.5%)

-3.3%

Bellway TSR

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 69

(median)

Rank 35

(upperquartile)

Rank 77

Bellway

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.

The TSR performance thresholds have not been met, and the Committee agreed there were no circumstances that warranted

the exercise of discretion. As a result, no awards will vest in October 2023.

131Bellway p.l.c. Annual Report and Accounts 2023

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 Chair

John Tutte 2023 260,000 – – – 260,000 – – 260,000 260,000 –

2022 108,333 – – – 108,333 – – 108,333 108,333 –

Paul Hampden

Smith 2023 – – – – – – – – – –

2022 152,282 – – – 152,282 – – 152,282 152,282 –

Executive Directors

Jason Honeyman 2023 739,490 51,570 104,761 185,316 1,081,137 – 7,488 1,088,625 903,309 185,316

2022 711,048 43,797 142,210 841,312 1,738,367 – – 1,738,367 897,055 841,312

Keith Adey 2023 451,259 35,143 63,915 113,086 663,403 – 4,493 667,896 554,810 113,086

2022 423,572 34,410 84,714 501,170 1,043,866 – – 1,043,866 542,696 501,170

Non-executive Directors

Denise Jagger 2023 28,177 – – – 28,177 – – 28,177 28,177 –

2022 71,776 – – – 71,776 – – 71,776 71,776 –

Sarah Whitney 2023 63,879 – – – 63,879 – – 63,879 63,879 –

2022 – – – – – – – – – –

Jill Caseberry 2023 75,999 – – – 75,999 – – 75,999 75,999 –

2022 71,776 – – – 71,776 – – 71,776 71,776 –

Ian McHoul 2023 75,999 – – – 75,999 – – 75,999 75,999 –

2022 71,776 – – – 71,776 – – 71,776 71,776 –

Total 2023 1,694,803 86,713 168,676 298,402 2,248,594 – 11,981 2,260,575 1,962,173 298,402

2022 1,610,563 78,207 226,924 1,342,482 3,258,176 – – 3,258,176 1,915,694 1,342,482

Notes:

a. Paul Hampden-Smith retired as Chair on 1 April 2022, John Tutte was appointed to the Board on 1 March 2022 and took over as Chair upon Paul’s retirement.

Denise Jagger retired from the Board and as Senior Independent Director on 16 December 2022, Sarah Whitney was appointed to the Board on 1 September 2022 and took over as Senior

Independent Director upon Denise’s retirement. Their fees reflect their service during the financial year.

b. Taxable benefits include car allowance/benefit and health insurance and £17,143 for Jason Honeyman which relates to hotel and travel costs.

c. Pension includes payments in lieu of pension. In 2022/23 Keith Adey made contributions to a defined contribution scheme of £2,613 (2021/22 £5,333). None of the directors are members of

the Group’s defined benefit scheme.

d. The value of long-term incentives in 2023 is nil as the threshold performance targets for the 2020 PSP awards were not met and as a result the awards lapsed in full.

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 2022

Granted/

awarded during

the year

Exercised

during the year

Lapsed during

the year

Awards/

options held at

31 July 2023

Exercise price/

market price

at date of

award(p)

Date of grant/

award

Exercisable/

capable of

vesting from

PSP

(a)

30,667 – – (30,667) – 3,370.0 16.10.2019 16.10.2022

PSP

(b)

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

(C)

33,216 – – – 33,216 3,211.0 26.10.2021 26.10.2024

PSP

(d)

– 64,901 – – 64,901 1,937.0 11.11.2022 11.11.2025

2013 SRSOS

(f)

– 1,935 – – 1,935 1,550.0 07.12.2022 01.02.2028

Totals 103,659 66,836 – (31,438) 139,057

Remuneration Report continued

Governance

132 Bellway p.l.c. Annual Report and Accounts 2023

Keith Adey

Scheme

Awards/

options held at

1 August 2022

Granted/

awarded during

the year

Exercised

during the year

Lapsed during

the year

Awards/

options held at

31 July 2023

Exercise price/

market price

at date of

award(p)

Date of grant/

award

Exercisable/

capable of

vesting from

PSP

(a)

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

(b)

22,668 – – – 22,668 2,317.0 27.10.2020 27.10.2023

PSP

(c)

19,304 – – – 19,304 3,211.0 26.10.2021 26.10.2024

PSP

(d)

– 39,604 – – 39,604 1,937.0 11.11.2022 11.11.2025

2013 SRSOS

(f)

– 1,161 – – 1,161 1,550.0 07.12.2022 01.02.2026

Totals 60,772 40,765 – (18,800) 82,737

Notes:

a. The performance period was 1 August 2019 – 31 July 2022. 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 performance conditions were not met therefore none of the award vested.

b. The performance period for the awards granted in October 2020 finished on 31 July 2023. 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 2023’ above.

c. The performance period is 1 August 2021 – 31 July 2024. The awards are subject to an EPS performance condition in addition to the same TSR performance conditions set out in note a

above. The TSR element of the award 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. Each performance condition represents a maximum of 33.3% of the overall award. These awards are also subject to clawback provisions.

d. On 11 November 2022, awards of performance shares under the PSP were made to Jason Honeyman and Keith Adey, equal to 170% of their respective salaries at the date of grant. The face

values on grant of these awards were therefore £1,257,133 and £767,140 respectively. The performance period is 1 August 2022 – 31 July 2025. The performance condition was in six parts

as detailed below. 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.

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tax rates). 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 and investment trusts). Median Upper

Quartile

20% of opportunity Underlying Return on Adjusted Capital Employed (Adding back land creditors and legacy building safety provisions

to Capital Employed).

14% 19%

10% of opportunity Reduction in scope 1 and 2 emissions. 25% of this part of the award vests at a reduction in tonnes by 17.3%, increasing

pro-rata, to full vesting at a reduction intonnes 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 the award vests at a reduction in tonnes by 17.5%,

increasing pro-rata, to full vesting at a reduction intonnes by 22.5% for 2024/25 compared to 2021/22.

1.56 tonnes reduction 2.01 tonnes reduction

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 2023/24 are shown in the single

figure of total remuneration table on page 132. As no awards will be exercised the value is nil.

h. The market price of the ordinary shares at 31 July 2023 was 2,216p and the closing range during the year was 1,587p to 2,500p.

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 2022/23 financial year.

133Bellway p.l.c. Annual Report and Accounts 2023

Governance

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 2023 are set

out below:

Scheme

Beneficially

owned at

31 July 2023

(c)

% basic

salary held

by Executive

Directors in

(a)(b)

Shareholding

target of 200% of

basic salary met?

Beneficially

owned at

31 July 2022

Outstanding

and unvested

PSPawards

Outstanding

and unvested

share options

Share options

exercised in

the year

Jason Honeyman 38,186 108 In progress 34,777 137,122 1,935 –

Keith Adey 80,218 373 Ye s 78,188 81,576 1,161 –

John Tutte 20,000 N/A N/A 20,000 N/A N/A N/A

Sarah Whitney – N/A N/A – 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 2,000 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 FY23 above 90% of salary (after paying tax and national insurance) in Bellway shares.

b. The % shareholding is based on salaries as at 31 July 2023 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 2023 and the date of this report.

The following section of this report is not required to be audited.

Implementation of Remuneration Policy in 2023/24

This section sets out how the Company will implement the Remuneration Policy for the 2023/24 financial year. Full details of

how each element will operate are set out in the Remuneration Policy table later in this report.

The Committee has taken into account the remuneration and related policies for the rest of the workforce generally

and engaged with the workforce through the Employee Listening Groups when setting the 2023/24 targets for the

Executive Directors.

Basic salaries

The Committee has awarded Jason Honeyman and Keith Adey salary increases of 3.5% which are below the level of the

average for the workforce for 2023/24 of 5%. Therefore, from 1 August 2023, Jason’s salary was increased to £765,372 p.a.,

andKeith’s salary was increased to £467,053 p.a.

Annual bonus

For the 2023/24 financial year, the bonus opportunity will continue to be limited to 120% of basic salary. The performance

conditions relate to (i) a stretching target of underlying operating profit, including Bellway’s share of joint ventures (with a

maximum payment of 72% of basic salary achievable), (ii) a stretching target of adjusted capital employed (with a maximum

payment of 12% of basic salary achievable), and (iii) the following strategic performance measures which provide a maximum

bonus opportunity of 36% of basic salary.

Strategic

measure Objectives Score

Land bank This will be in two parts:

• Sales outlet openings to ensure that we have the ability to meet our sales ambitions

and have secured sufficient planning consents.

• Availability of land bank of plots with DPP (available for completion in the following

financial year) to ensure our sales ambitions are not frustrated by land shortages in

future years.

Maximum – 21% of salary

Sustainability

– 5 star

builder

Retaining 5 star

homebuilder status (as measured by the HBF). Maximum – 5% of salary

Sustainability

– Employee

Engagement

Targets relating to the annual employee engagement survey. Maximum – 5% of salary

Sustainability

– Carbon

Reduction

Development of a high quality timber frame proposition to enable investment to be

evaluated in line with our strategic business objectives.

Maximum – 5% of salary

Health and safety performance will be taken into account as part of the Committee’s overall assessment of the bonus payment.

Remuneration Report continued

Governance

134 Bellway p.l.c. Annual Report and Accounts 2023

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.

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 2023 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 to

atwo year holding period.

Regardless of the vesting outcome the Committee may adjust the level of vesting (including to nil) to such extent as it

considers appropriate to ensure the level of vesting is a true reflection of the overall performance of the Company over the

performance period.

Metric Performance condition (25% to 100% straight line vesting) Threshold target Stretch target

25% 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.

25% of

opportunity

Relative TSR against the FTSE 350 (excluding financial services companies and

investment trusts).

Median Upper quartile

10% of

opportunity

Margin protection: ROCE in FY26 10% 13%

10% of

opportunity

Margin protection: Strategic land in DPP land bank in FY26 2,700 plots 3,000 plots

10% of

opportunity

Margin protection: Relative underlying operating margin 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 in FY26. Median is calculated as an average of the median

company and the company above and below it.

Median Median x 1.05

10% of

opportunity

Sustainability: Customer satisfaction score 9-month survey result in FY26 79% 82%

10% of

opportunity

Sustainability: Achieve a meaningful contribution towards reducing scope 1,2

and 3 carbon emissions including through the redesign of Artisan house types

to accommodate timber frame construction. We are stretching management to

go beyond emission reduction requirements under building regulations through

this measure. The Committee will assess performance achieved (including

the level and pace of achievement) during the 3 years and report these

achievements and our expectations at the end of FY26.

Satisfactory

performance

Excellent

performance

Chair and Non-Executive Director fees from 1 August 2023

Director

Fee from

1 August 2022

increase

Fee from

1 August 2023

Non-Executive Chair fee 260,000 3.5 269,100

Non-Executive Director fee 62,500 3.5 64,688

Senior Independent Non-Executive Director 11,750 3.5 12,161

Audit and Remuneration Committee Chair fees 13,500 3.5 13,973

The Company’s Articles of Association specify an annual limit on Non-Executive Director fees of £500,000. This excludes the

fees for the Chair and additional fees payable to the Senior Independent Non-Executive Director and to Committee Chairs.

Shareholder approval is required to amend this limit.

135Bellway p.l.c. Annual Report and Accounts 2023

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 133). 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 2023, of £100 invested in Bellway on 31 July 2013 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)

350

300

250

200

150

100

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

31 July

2023

112

182

144

211

210

206

106

269

194

315

246

238

107

126

125

147

159

151

128

183

163

161

222

238

280

226

185

166

264

251

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).

2014 2015 2016 2017 2018

(a)

2019

(b)

2020 2021 2022 2023

Total remuneration

(£000)

1,450 1,960 2,785 3,468 1,737 1,220 1,110 1,998 1,738 1,089

Annual bonus paid

(as % of maximum)

91.6% 88.8% 95.8% 93.8% 0.0% 76.7% 0.0% 99.5% 98.6% 20.9%

PSP vesting (as a %

of maximum) 50.0% 50.0% 100.0% 100.0% 99.8% 30.6% 47.7% 28.7% 0% 0%

Notes:

a. 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.

b. Jason Honeyman was appointed as Group Chief Executive on 1 August 2018.

Remuneration Report continued

Governance

136 Bellway p.l.c. Annual Report and Accounts 2023

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 FY23 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.

FY22–FY23 FY21–FY22 FY20–FY21 FY19–FY20

Change

in salary

/ fees

(a)

Change in

benefits

Change

in bonus

Change

in salary

/ fees

(a)

Change in

benefits

Change

in bonus

Change

in salary

/ fees

Change in

benefits

Change

inbonus

Change

in salary

/ fees

% Change

in benefits

Change

inbonus

All other employees

(b)

+6.3 +1.6 +4.5 +6.0 +8.4 +83.2 +1.6 +8.3 -79.9 +2.6 +8.7 +17.8

J Honeyman

(Group Chief Executive)

(c)

+4.0 -11.9 -78.0 +3.2 -11.2 +2.6 +3.4 +9.8 +100 +25.6 +38.5 -100

K Adey

(Group Finance Director) +6.5 -13.1 -77.4 +5.6 +3.3 +5 +3.4 +0.3 +100 -1.4 +2.4 -100

J Tutte (Chair)

(d)

+140 n/a n/a +100 n/a n/a n/a n/a n/a n/a n/a n/a

P Hampden Smith

(Chair)

(e)

-100 n/a n/a -31.2 n/a n/a +3.4 n/a n/a +31.4 n/a n/a

D Jagger (INED) -60.7 n/a n/a +3.2 n/a n/a +3.4 n/a n/a +2.3 n/a n/a

S Whitney (INED) +100 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

J Caseberry (INED) +5.9 n/a n/a +3.2 n/a n/a +3.4 n/a n/a -1.4 n/a n/a

I McHoul (INED) +5.9 n/a n/a +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 132.

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 132.

d. John Tutte was appointed as Non Executive Chair during the 2021/22 financial year, having joined Bellway on the 1 March 2022.

e. Paul Hampden Smith resigned as Non Executive Chair on the 31 March 2022.

f. Denise Jagger retired from the Board and as Senior Independent Director on 16 December 2022.

g. Sarah Whitney was appointed to the Board on 1 September 2022 and took over as Senior Independent Director upon Denise’s retirement.

CEO pay ratio

We are publishing our CEO pay ratio figures for the financial years 2018/19, to 2022/23. 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

2022/23 A 15:1 74,421 55,000 22:1 49,903 40,215 34:1 32,422 26,462

The pay ratios have been calculated as at 31 July 2023 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 2022/23 financial year, which is expected

to be paid in November 2023, 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 2021/22 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’s lower bonus payment.

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.

137Bellway p.l.c. Annual Report and Accounts 2023

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 2022 and 31 July 2023.

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.

2023

£m

2022

£m

% change

Employee costs

(a)

191.5 167.0 14.7%

Dividends

(b)

169.2 172.4 (1.9%)

Section 106 and CIL payments

(c)

89.2 117.2 (23.9%)

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 2023 the Trust held 327,202 shares. It is the Company’s

current intention to use market-purchased 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 2023 was:

Limit of 5% in any ten years under all executive share plans Actual 0.99%

Limit of 10% in any ten years under all share plans Actual 0.88%

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 on 6

December 2021)

Remuneration Report

(advisory vote at AGM

on16December 2022)

Number

of votes

% of

votes cast

Number

of votes

% of

votes cast

For 89,540,335 96.95 91,378,412 96.74

Against 2,815,436 3.05 3,081,126 3.26

Total votes cast (excluding votes withheld) 92,355,771 100 94,459,538 100

Votes withheld 206,210 207,611

At the AGM on 15 December 2023, 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

16 October 2023

Remuneration Report continued

Governance

138 Bellway p.l.c. Annual Report and Accounts 2023

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 complexity and their

rationale and operation should be

easy to understand.

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

the policy.

We carefully consider the range of likely performance outcomes for incentive plans

when setting performance target ranges and at the time of assessment would use

discretion where necessary if the formulaic result is considered inappropriate.

Proportionality: the link between

individual awards, the delivery

of strategy and the long-term

performance of the Company

shouldbe clear. Outcomes should

not reward poor performance.

The opportunity under incentive plans is determined based on a proportion of salary

with the quantum determined to ensure that there is an appropriate link between pay

and performance.

The performance conditions applying to the incentives are aligned with the

Company’s strategy and are reviewed on an annual basis to consider whether

theyareworking effectively.

There are provisions to override the formula-driven outcome of incentive plans and

clawback provisions to ensure that there is not reward for poor performance.

Alignment to culture: incentive

schemes should drive behaviours

consistent with Company purpose,

values and strategy.

The annual bonus is based on both financial and non-financial metrics aligned with the

strategy incentivising the profitability of the Company whilst maintaining a focus on our

customers and the quality of our service.

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.

139Bellway p.l.c. Annual Report and Accounts 2023

Governance

Remuneration Report continued

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

linktostrategy Operation Maximum opportunity Framework to assess performance

Salary

To be market

competitive and

therefore assist

in recruiting,

retaining and

motivating high-

qualityexecutives.

Reflects individual

role and

experience.

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

Remuneration Report.

In addition to the reviews by the

Chair, as part of the annual Board

evaluation, the performance of the

executives and the Company is

kept under continuous review by

the Board.

Governance

140 Bellway p.l.c. Annual Report and Accounts 2023

Component and

linktostrategy 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 was 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

a combination

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

Remuneration Report.

141Bellway p.l.c. Annual Report and Accounts 2023

Governance

Remuneration Report continued

Component and

linktostrategy Operation Maximum opportunity Framework to assess performance

Share ownership guideline for Executive Directors

To align Executive

Directors’ interests

with those of

shareholders.

Executive Directors are required to

accumulate a minimum shareholding

equivalent to 200% of basic 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

Remuneration Report.

Governance

142 Bellway p.l.c. Annual Report and Accounts 2023

Component and

linktostrategy Operation Maximum opportunity Framework to assess performance

All-employee share schemes

To encourage

employees to build

a stake in the future

of the Company.

The Executive Directors can

participate in any HMRC approved

all-employee plans operated by

the Company.

Subject to prevailing

HMRC limits.

Not applicable.

Chair and Non-Executive Directors

To set appropriate

fees in light of the

time commitment,

responsibilities,

wider market and

best practice.

The Chair’s fee is determined by

theRemuneration Committee.

The remuneration of the Non-

Executive Directors is determined

by the Board Committee on

Non-Executive Directors’

Remuneration, which comprises the

Executive Directors.

Fee levels are normally reviewed

annually, taking into account the time

commitment and responsibilities of

the roles including membership or

chairing 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 £500,000 p.a.

The performance of the Non-

Executive Directors is assessed

bythe Chair.

The Senior Independent Non-

Executive Director reviews the

performance of the Chair in

conjunction 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 Remuneration Report as they arise.

143Bellway p.l.c. Annual Report and Accounts 2023

Governance

Remuneration Report continued

Approach to recruitment remuneration

In arriving at a total package and in considering the quantum for each element of the package, the Committee will take into

account the skills and experience of the candidate and the market rate for a candidate of that experience, as well as the

importance of securing the preferred candidate.

Element 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,

the award can be delayed until the following year.

Targets would normally be the same as for other directors

and grant levels consistent within the permitted individual

maximum under the rules of the plan and this policy.

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,

expected value and performance conditions.

Service contracts and loss of office payment policy

The details of the Executive Directors’ service contracts are as follows:

Executive Director

First appointed as

aDirector

Current contract

commencement date

Notice period

fromemployer

Notice period

fromexecutive

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

Chair 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 Chair and

Non-Executive Directors provide that no compensation is payable on termination, other than fees accrued and expenses.

Governance

144 Bellway p.l.c. Annual Report and Accounts 2023

Non 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

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, the

Committee may consider payments in

respect of an unfair dismissal award,

outplacement support and 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.

145Bellway p.l.c. Annual Report and Accounts 2023

Governance

Sustainability Committee Report

The Board had determined that it would be appropriate and

beneficial to both the Group and its stakeholders to constitute

Sustainability Committee to oversee ESG matters at Bellway.

The Committee was established and met for the first time in

May 2023.

Membership and meeting attendance

Director Date appointed to theCommittee

Number of

meetings

attended during

theyear

John Tutte

(Chair)

18 May 2023 1/1

Sarah Whitney 18 May 2023 1/1

Jill Caseberry 18 May 2023 1/1

Ian McHoul 18 May 2023 1/1

Keith Adey 18 May 2023 1/1

Focus areas for 2022/23

• To focus on the establishment of the Committee

anddrafting the Committee Terms of Reference.

• Agree the membership of the Committee and number

ofmeetings per annum.

• Monitoring progress of the Better with Bellway strategy.

Focus areas for 2023/24

• To approve the Committee Terms of Reference.

• Approve the Better with Bellway targets and KPIs for FY24.

• Continue to monitor progress of the Better with

Bellway Strategy.

• Meet with key management with responsibility for the

delivery of the Better with Bellway strategy.

Responsibilities and terms of reference

The main areas of the Sustainability Committee’s (the

‘Committee’) responsibilities are:

• Debate, review and scrutinise the Better with Bellway

sustainability strategy and implementation plan and make

recommendations to the Board for approval.

• Monitor and challenge the objectives, KPIs and targets set

in relation to the implementation of the Better with Bellway

strategy, make recommendations for new KPIs and targets

and recommend these to the Board for approval.

• Scrutinise the implementation of major Better with

Bellway initiatives.

• Identify, debate, review and scrutinise the business

response to environment and social risks with specific focus

on climate risks and opportunities.

• Review the ongoing appropriateness of the Group’s

approach to ESG issues in the context of external best

practice and monitor ESG compliance.

• Review the ongoing appropriateness and relevance

ofpolicies relating to ESG matters.

Activities in 2022/23

• The Committee was established and met for the first time

in 2023.

• The Committee Terms of Reference, outlining the

Committee’s purpose, membership and key responsibilities

was drafted during the year and approved by the Board in

September 2023.

• Key management met with the Committee and presented

an update on the Better with Bellway strategy.

Focus in 2023/24

• To approve the Better with Bellway targets and KPIs for

FY24, ensuring they support the delivery of the overall

Better with Bellway strategy.

• Monitor progress of the Better with Bellway strategy,

KPI’sand targets.

• Meet with key management with responsibility

forthedelivery of the Better with Bellway strategy.

• Review relevant policies and determine their

appropriateness in supporting the Groups

sustainability agenda.

• Review industry best practice in respect of ESG compliance.

John Tutte

Chair

16 October 2023

The Board has determined that it

wouldbe… beneficial to both the

Groupand itsstakeholders to establish

aSustainabilityCommittee.”

John Tutte

Chair of the Sustainability Committee

Governance

146 Bellway p.l.c. Annual Report and Accounts 2023

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 cross-referenced here to avoid repetition.

Topic Page number

Directors 102 and 103

Appointment and

replacementof directors 108 and in the Articles

Directors’ interests 134

Future developments 33 of the Strategic Report

Group undertakings 196

Environmental issues 38 to 62 of the Strategic Report

Section 172 statement/

reporting

63 of the Strategic Report

Greenhouse gas emissions 49 to 52 of the Strategic Report

Whistleblowing 124

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 £365.0 million (2022 – £242.6 million).

The Directors have proposed a final ordinary dividend for the

year ended 31 July 2023 of 95.0p per share (2022 – 95.0p).

This has not been included within creditors as it was not

approved by shareholders before the end of the financial

year. The Directors recommend payment of the final dividend

on Wednesday 10 January 2024 to shareholders on the

1 December 2023.

Dividends paid during the year comprise the final dividend

of 95.0p per share in respect of the year ended 31 July 2022,

together with an interim dividend in respect of the year ended

31 July 2023 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 2023 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:

As at 31 July 2023 As at 16 October 2023

Topic

Number of

shares with

voting rights

% total

voting

rights

Number of

shares with

voting rights

% total

voting

rights

BlackRock Inc Below 5% Below 5%

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

FMR LLC Below 5% 6,008,422 5.02

Polaris Capital

Management 4,941,297 4.09 4,941,297 4.09

The Directors have proposed a final

ordinary dividend for the year ended

31July 2023 of 95.0p per share.”

Simon Scougall

Group General Counsel and Company Secretary

147Bellway p.l.c. Annual Report and Accounts 2023

Governance

Post balance sheet events

There were no post balance sheet events.

Information on those third parties with which the

Company has contracts or arrangements essential

to its business.

The Company is party to a number of debt agreements

with major clearing banks. The withdrawal of such facilities

could have a material effect on the financing of the business.

There are no other arrangements that the Group considers to

be critical to the performance of the business.

Takeovers directive and change of control

The Company is party to a number of banking agreements

that may be terminable in the event of a change of control

of the Company. On a change of control, any outstanding

options and awards granted under the Group’s share

schemes would become exercisable, subject to any

performance conditions being met.

Share capital

The Company’s total issued share capital, as at 31 July 2023,

consisted of 120,558,573 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 have 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, 1,107 new ordinary shares were issued to

satisfy awards made under the Company’s employee share

schemes. The Directors have authority to allot shares within

limits agreed by shareholders. Details of the renewal of this

authority, including the resolutions which seek to renew this

authority, are set out in the Notice of Meeting of the AGM,

tobe held on Friday 15 December 2023.

Purchase of the Company’s own shares

The Company was given authority at its Annual General

Meeting on 16 December 2022 to purchase its own

ordinary shares. On 28 March 2023 the Group announced,

‘TheBuyback Programme’, with the Board approving a return

of surplus capital of £100 million to shareholders. An initial

tranche of £50 million (First Tranche) was completed on

16 June 2023, with a further tranche of £50 million (Second

Tranche) commencing on 19 June 2023.

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 and

107 respectively.

The Audit Committee, whose role is detailed on page 114 and

115, has meetings at least twice a year with the Company’s

auditor, Ernst & Young LLP.

People

The important role that our people perform is described

throughout the Strategic Report. In addition supported by the

‘Better with Bellway’ sustainable approach and the ‘Employer

of Choice’ business priority, we aim to be an employer of

choice, with a safe, diverse, and inclusive environment.

More details are included within the Better with Bellway

section on pages 46 and 47.

The following disclosures provide additional information on

how we treat our people and how we engage with them.

We are an equal opportunities employer. It is our policy

to develop and apply, throughout the Group, procedures

and practices which are designed to ensure that equal

opportunities are provided to all of our employees, or

those who seek employment with the Group, irrespective

of their age, colour, disability, ethnic origin, gender, marital

status, nationality, parental status, race, religion, belief, or

sexual orientation.

Directors’ Report continued

Governance

148 Bellway p.l.c. Annual Report and Accounts 2023

All employees, whether part-time, full-time, or temporary,

are treated fairly and equally. Selection for employment,

promotion, training, or other matters affecting their

employment is on the basis of aptitude and ability.

All employees are supported and encouraged to develop

to their full potential and the talents and resources of the

workforce are fully utilised to maximise the efficiency of

the organisation. Training at each division is planned and

monitored through an annual training plan.

It is our policy to give full and fair consideration to the

employment needs of disabled persons (and persons

who become disabled whilst employed by the Group)

and to comply with any current legislation with regard to

disabled persons.

The importance of good communications with employees is

recognised by the Directors and senior management team.

Employee Listening Groups are held on a regular basis to

engage in open communication and a newsletter is issued to

all of our employees. Each division maintains good employee

relations using a variety of means appropriate to its own

particular needs, with guidance, when necessary, from Group

Head Office. The Group HR function also facilitates an annual

employee engagement survey with the results and proposed

action points presented to the Board for approval.

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 further supported by our sustainable approach,

Better with Bellway, and the ‘Building Quality Homes, Safely’

business priority. More details can be found within the Better

with Bellway section pages 53 and 54.

Health and safety issues are considered at each Board

meeting and are addressed in the Strategic Report, and on

our website at www.sustainability.bellwayplc.co.uk/quality-

safety. 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

Seven resolutions will be proposed as special business

at the AGM to be held on Friday 15 December 2023.

Explanatory notes on these resolutions are set out in the

Notice of Meeting of the AGM.

Disclosure of all relevant information to theauditor

The Directors who held office at the date of this report confirm

that, so far as they are each aware, there is no relevant audit

information of which the Company’s auditor is unaware

and that each Director has taken all the steps that he or she

ought to have taken as a Director to make himself or herself

aware of any relevant audit information and to establish

that the Company’s auditor is aware of that information.

This confirmation is given, and should be interpreted

in accordance, with the provisions of section 418 of the

Companies Act 2006.

Statement of Directors’ responsibilities in respect

of the financial statements

The Directors are responsible for preparing the Annual Report

and the Financial Statements in accordance with applicable

United Kingdom law and regulations.

Company law requires the Directors to prepare Financial

Statements for each financial year. Under that law, the Directors

have elected to prepare the Group and parent company

Financial Statements in accordance with international

accounting standards in conformity with the requirements of

the Companies Act 2006. Under company law, the Directors

must not approve the Financial Statements unless they are

satisfied that they give a true and fair view of the state of affairs

of the Group and the company and of the profit or loss of the

Group and the company for that period.

Under the Financial Conduct Authority’s Disclosure Guidance

and Transparency Rules, Group Financial Statements are

required to be prepared in accordance with international

financial reporting standards (IFRS) as adopted by the UK.

In preparing these Financial Statements the Directors are

required to:

• Select suitable accounting policies in accordance with IAS 8

Accounting Policies, Changes in Accounting Estimates and

Errors and then apply them consistently;

• Make judgements and accounting estimates that are

reasonable and prudent;

• Present information, including accounting policies, in a

manner that provides relevant, reliable, comparable and

understandable information;

• Provide additional disclosures, when compliance with

the specific requirements in IFRS is insufficient, to enable

users to understand the impact of particular transactions,

other events and conditions on the Group and Company

financial position and financial performance;

• In respect of the Group Financial Statements, state whether

international accounting standards in conformity with

the requirements of the Companies Act 2006 and IFRSs

as adopted by the UK have been followed, subject to

any material departures disclosed and explained in the

Financial Statements;

149Bellway p.l.c. Annual Report and Accounts 2023

Governance

• 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 model and 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

16 October 2023

Directors’ Report continued

Governance

150 Bellway p.l.c. Annual Report and Accounts 2023

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 2023 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 2023 which comprise:

Group Parent Company

Consolidated income statement

for the year then ended

Statement of changes

in equity for the year

thenended

Consolidated statement of

comprehensive income for

theyear then ended

Balance sheet as at

31July2023

Consolidated statement of

changes in equity for the

yearthen ended

Statement of cash flows

forthe year then ended

Consolidated balance sheet

asat 31 July 2023

Related notes 1 to

28 to the financial

statements, including a

summary of significant

accountingpolicies

Consolidated statement of cash

flows for the year then ended

Related notes 1 to 28 to the

financial statements, including

a summary of significant

accounting policies

The financial reporting framework that has been applied

in their preparation is applicable law and 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 the Parent Company

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, obtaining an understanding

of management’s going concern assessment process

and challenging 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, severe downside case

and reverse stress test cases. The reverse stress test case

had 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.

• Assessing the appropriateness of the duration of the going

concern assessment period to 31 July 2025 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.

• Obtaining management’s going concern assessment,

including the cash forecast, for the going concern

period through to 31 July 2025 and testing these for

arithmetical accuracy.

• Assessing the historical accuracy of forecasting and

challenging the appropriateness of 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.

• Verifying the inputs into the cash flow forecasts, the debt

facility terms, and reconciling the liquidity position as at

31 July 2023. We further reviewed borrowing facilities to

confirm both availability to the Group and the forecast debt

repayments through the going concern assessment period

and to validate the financial covenants in relation to the

available facilities.

151Bellway p.l.c. Annual Report and Accounts 2023

Governance

Independent Auditor’s report to the members of Bellway p.l.c. continued

• Obtaining the reverse stress test and downside scenarios

prepared by management and assessing the plausibility of

these. We did this by challenging the assumptions made

and considering indicators of contradictory evidence.

• Considering any mitigating factors included in the

downside 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.

• Subjecting the reasonable downside model to additional

stress testing to confirm management has considered

a balanced range of outcomes in their assessment of

going concern.

• Assessing management’s consideration of material climate

change impacts in the going concern period, including

incorporation of the expected costs of applying the Future

Homes Standard during the going concern period.

• Reviewing the Group’s going concern disclosures

included in the Annual Report and Accounts in order to

assess whether the disclosures appropriately described

the assessment management performed and the key

judgements taken.

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

comprises a significant investment in land via increasing

land creditors by £950m, followed by a reduction in private

home completions of 50% from 31 January 2024, and

average selling prices on private homes subsequently

reducing by 10%), liquidity headroom is eliminated in

July 2025.

• 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 2025.

Based on the work we have performed, we have not

identified any material uncertainties relating to events or

conditions that, individually or collectively, may cast significant

doubt on the Group and Parent Company’s ability to continue

as a going concern for the period to 31 July 2025.

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 taxation, 99% of revenue and

98% of total assets.

Key audit

matters

• Risk of inappropriate revenue recognition;

• Risk of inappropriate cost of sales

recognition and valuation of work-

in-progress and land on sites under

development; and

• Risk of inappropriate recognition of legacy

building safety improvement provisions.

Materiality • Overall Group materiality of £24.2m which

represents 5% of profit before taxation.

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, the potential impact of climate

change 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 10 reporting components of the Group, we

selected 2 full scope components covering entities which

represent the principal business units within the Group.

Of the 2 full scope components selected, 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% (2022: 99%)

of the Group’s profit before taxation, 100% (2022: 99%) of

the Group’s revenue and 99% (2022: 99%) of the Group’s

total assets.

The remaining 8 components together represent 1% of the

profit before taxation. For these components, we performed

other procedures, including analytical review, testing of

consolidation journals, and intercompany eliminations to

respond to any potential risks of material misstatement

to the Group financial statements. The statutory audits of

these 8 components were performed concurrently with the

Group audit.

Changes from the prior year

There are no changes to our scoping compared to the

prior year.

Governance

152 Bellway p.l.c. Annual Report and Accounts 2023

Involvement with component teams

All audit work performed for the purposes of the audit was

undertaken by the Group audit team.

Climate change

Stakeholders are increasingly interested in how climate

change will impact Bellway p.l.c. The Group has determined

that the most significant future impacts from climate

change on their operations will be from evolving legal

and regulatory requirements (e.g. the Future Homes

Standard and biodiversity net gain requirements set by the

government) and the availability of more efficient products

and technologies to deliver climate-resilient homes. These are

explained on pages 84-90 in the required Task Force for

Climate related Financial Disclosures that form part of

the “Other information” rather than the audited financial

statements. Our procedures on these unaudited 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, in line with our

responsibilities on “Other information”.

In planning and performing our audit we assessed the

potential impacts of climate change on the Group’s

business and any consequential material impact on its

financial statements.

The Group has explained in the Basis of Preparation note

on page 168 how they have considered the impact of

climate change, specifically providing an assessment of

inventories and how they could be affected by measures

taken to address additional requirements included in the

Future Homes Standard and biodiversity net gain objectives.

Management concluded in this assessment that no issues

were identified that would have a material impact on the

carrying value of the Group’s assets or liabilities or have any

other material impact on the financial statements.

Our audit effort in considering the impact of climate change

on the financial statements was focused on understanding

management’s assessment of the impact of climate risk,

physical and transition, and their climate commitments.

We also understood the Group’s strategy to address these

risks that may affect the financial statements and our audit.

As part of this evaluation, we performed our own risk

assessment, supported by our climate change internal

specialists, to determine the risks of material misstatement

in the financial statements from climate change which

needed to be considered in our audit. We identified the

specific impact of climate change relating to the valuation

of inventory, including land and work-in-progress under

development arising from the requirements of the Future

Homes Standard. 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 Future Homes Standard for units without

foundations constructed prior to June 2025.

We also evaluated the Directors’ considerations of climate

change risks in their assessment of going concern and

viability and associated disclosures. Where considerations

of climate change were relevant to our assessment of going

concern, these are described above.

We read the climate related information within the Annual

Report, which included the Group’s Task Force for Climate

related Financial Disclosures and considered consistency with

the financial statements and our audit knowledge.

Based on our work we have considered the impact of climate

change on the financial statements to impact certain key

audit matters. 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.

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.

153Bellway p.l.c. Annual Report and Accounts 2023

Governance

Independent Auditor’s report to the members of Bellway p.l.c. continued

Risk Our response to the risk

Key observations communicated

to the Audit Committee

Inappropriate

revenue recognition

Refer to the Audit Committee

Report (page 118); Accounting

policies and Note 1 and 8 of the

Consolidated Financial Statements

(pages 170, 171 and 178)

The Group has reported:

• Revenues of £3,406.6m

(2022: £3,536.8m)

• Trade receivables of £34.6m

(2022: £47.5m).

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

evaluate 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 revenue

recognised in the year as

a result of inappropriate

revenue recognition,

application of cut-off or

management override.

Governance

154 Bellway p.l.c. Annual Report and Accounts 2023

Risk Our response to the risk

Key observations communicated

to the Audit Committee

Inappropriate cost of sales

recognition and valuation of

work-in-progress and land on

sites under development

Refer to the Audit Committee

Report (pages 118 and 119);

Accounting policies and Notes

3 and 7 of the Consolidated

Financial Statements (pages 173,

177 and 178)

The Group has reported:

• Cost of sales before net legacy

building safety expense of

£2,719.3m (2022: £2,749.8m)

• Land £2,578.8m

(2022: £2,786.4m)

• Work-in-progress of £1,861.6m

(2022: £1,524.8m).

• Showhomes £117.2m

(2022: £107.0m).

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 11

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 performing 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. This was in order to assess for those

sites impacted by the Future Homes Standard, 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

completion, the net impact of this was not material.

• We tested a sample of developments where the last plot was

sold during FY23 and compared the final site margin to the

previous quarterly valuation to assess whether the previous

quarterly valuation was reasonable.

• 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 Chair and the Divisional

Director teams to further understand whether there are any

other specific issues requiring evaluation.

We are satisfied the cost

of sales margin and

valuation of work-in-

progress and land on

sites under development

is appropriate.

155Bellway p.l.c. Annual Report and Accounts 2023

Governance

Independent Auditor’s report to the members of Bellway p.l.c. continued

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 (page 120 and 121);

Accounting policies and Notes

2 and 10 of the Consolidated

Financial Statements (pages 172,

180 and 181).

The Group has reported:

• SRT and associated review

provision of £477.7m

(2022: £441.5m)

• Net legacy building

safety expense of £38.6m

(2022: £346.2m).

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.

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 over monitoring and updating the SRT and

associated review 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. This included 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 accounting paper to

understand management’s rationale which supports the

recognition of a provision. We obtained an understanding

of management’s commitment through signing of the Self-

Remediation Terms with the Department for Levelling Up,

Housing and Communities, to fund, undertake or procure,

atits own cost, all necessary remediation or mitigation work

to address life-critical fire safety. This is in respect of 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 of the

basis of the provision against the requirements of IAS

37, throughunderstanding management’s process

for identification of impacted sites, assessing action

plans arising, and agreeing assumptions to third-party

investigationreports, cost estimates and latest legal advice.

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,

and additional amounts recognised in respect of the

Self-Remediation Terms 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 of the methodology used

within 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.

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

provision is fairly stated.

Governance

156 Bellway p.l.c. Annual Report and Accounts 2023

Risk Our response to the risk

Key observations communicated

to the Audit Committee

Inappropriate recognition

of legacy building

safety improvement

provisions continued

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.

• 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.

Our application of materiality

We apply the concept of materiality in planning and

performing the audit, in evaluating the effect of identified

misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that,

individually or in the aggregate, could reasonably be

expected to influence the economic decisions of the users

of the financial statements. Materiality provides a basis for

determining the nature and extent of our audit procedures.

We determined materiality for the Group to be £24.2m

(2022: £30.7m), which is 5% (2022: 5%) of profit before taxation

(2022: profit before taxation adjusted for the estimated one-

off impact of the £300.0m Building Safety Pledge recorded

in the year). We believe that profit before taxation provides

us with the most relevant performance measures to the

stakeholders of the Group and is therefore an appropriate

basis for materiality.

We determined materiality for the Parent Company to be

£3.0m (2022: £2.2m), which is 0.5% (2022: 0.5%) of total assets.

During the course of our audit, we reassessed initial Group

materiality and modified it to reflect a reduction in actual

trading performance versus the initial forecast.

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%

(2022: 75%) of our planning materiality, namely £18.2m

(2022: £23.0m). We have set performance materiality at this

percentage due to the level of misstatements identified in

prior years being low.

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 £4.3m to £20.2m (2022: £4.6m to £21.9m).

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 £1.2m

(2022: £1.5m), 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.

157Bellway p.l.c. Annual Report and Accounts 2023

Governance

Independent Auditor’s report to the members of Bellway p.l.c. continued

Other information

The other information comprises the information included

in the annual report set out on pages 1 to 150, including the

Strategic Report, Governance Reports, the Directors’ Report

set out on pages 8 to 150, 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 does not cover

the other information and, except to the extent otherwise

explicitly stated in this report, we do not express any form of

assurance conclusion thereon.

Our responsibility is to read the other information and, in

doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge

obtained in the course of the audit, or otherwise appears

to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are

required to determine whether 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

byexception

In the light of the knowledge and understanding of the Group

and the Parent Company and its environment obtained

in the course of the audit, we have not identified material

misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters

in relation to which the Companies Act 2006 requires us to

report to you if, in our opinion:

• adequate accounting records have not been kept by the

Parent Company, or returns adequate for our audit have not

been received from branches not visited by us; or

• the Parent Company financial statements and the part of

the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by

law are not made; or

• we have not received all the information and explanations

we require for our audit.

Corporate Governance Statement

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 149

and 150;

• Directors’ statement on fair, balanced and understandable

set out on page 150;

• Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out on

page 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 pages 122 and 123; and;

• The section describing the work of the audit committee set

out on page 114 to 125.

Responsibilities of directors

As explained more fully in the directors’ responsibilities

statement set out on page 149 and 150, 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

Governance

158 Bellway p.l.c. Annual Report and Accounts 2023

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, and the Self-Remediation

Terms with the Department for Levelling Up, Housing and

Communities in relation to historical fire safety issues.

• 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’s 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 3 years, covering

the years ending 31 July 2021 to 31 July 2023.

• The audit opinion is consistent with the additional report to

the Audit Committee.

Use of our report

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken

so that we might state to the Company’s members those

matters we are required to state to them in an auditor’s report

and for no other purpose. To the fullest extent permitted by

law, we do not accept or assume responsibility to anyone

other than the Company and the Company’s members as a

body, for our audit work, for this report, or for the opinions we

have formed.

Mark Morritt (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

Newcastle-upon-Tyne

16 October 2023

159Bellway p.l.c. Annual Report and Accounts 2023

Governance

Disciplined

financial

management

We will maintain financial discipline and as previously

demonstrated, our balance sheet strength provides the

Group with the flexibility to respond to changes in the market,

increaseinvestment and capitalise on growth opportunities

whenthey arise.

The Oakmont

showhome at

Summerville

Gardens, Dalkeith.

Street scene from our

Sherwood Gate development,

Nottingham.

Couple outside their new

home at our Cherry Meadow

development, Derbyshire.

Accounts

160 Bellway p.l.c. Annual Report and Accounts 2023

Primary statements

Group Income Statement 162

Group Statement of Comprehensive Income 163

Statements of Changes in Equity 164

Balance Sheets 166

Parent Company Income Statement 166

Cash Flow Statements 167

Accounting Policies

Basis of preparation 168

Going concern 168

Effect of new standards and interpretations effective

for the first time 169

Standards and interpretations in issue but not yet effective 169

Notes to the Financial Statements

Notes to the Financial Statements 170

Performance for the year

1. Revenue 170

2. Net legacy building safety expense 171

3. Cost of sales recognition 173

4. Operating profit 173

4a. Part-exchange properties 173

4b. Operating profit is stated after charging 173

4c. Auditor’s remuneration 173

5. Earnings per ordinary share 174

Taxation

6. Taxation 174

6a. Income tax recognised in the income statement 175

6b. Tax recognised in equity and other

comprehensive income 175

6c. Deferred taxation 176

Working capital

7. Inventories 177

8. Trade and other receivables 178

9. Trade and other payables 179

10. Provisions and reimbursement assets 180

Investingactivities

11. Property, plant and equipment 181

12. Financial assets and equity accounted joint

arrangements, and investments in subsidiaries 182

13. Joint arrangements 183

14. Commitments 183

Financing

15. Net cash 184

15a. Reconciliation of net cash flow to net cash 184

15b. Analysis of net cash 184

16. Finance income and expenses 185

17. Financial instruments 185

Shareholder capital

18. Issued capital 188

19. Reserves 188

20. Dividends on equity shares 189

Directors and employees

21. Employee information 189

22. Retirement benefit asset 190

23. Share-based payments 192

Contingencies, related parties andsubsidiaries

24. Contingent liabilities 195

25. Related party transactions 195

26. Group undertakings 196

27. Resident management companies 197

Other information

28. Alternative performance measures 205

Five year record 209

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.

Accounts

161Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Group Income Statement

for the year ended 31 July 2023

Note

2023

£m

2022

£m

Revenue 1 3,406.6 3,536.8

Cost of sales 3 (2,757.9) (3,094.0)

Analysed as:

Underlying cost of sales (2,719.3) (2,749.8)

Adjusting item: net legacy building safety expense 2 (38.6) (344.2)

Gross profit 648.7 442.8

Other operating income 4 29.1 25.3

Other operating expenses 4 (30.3) (25.1)

Administrative expenses (142.2) (134.0)

Operating profit 4 505.3 309.0

Finance income 16 9.9 1.6

Finance expenses 16 (30.8) (15.7)

Analysed as:

Underlying finance expenses (19.8) (13.7)

Adjusting item: net legacy building safety expense 2 (11.0) (2.0)

Share of result of joint ventures 13 (1.4) 9.3

Profit before taxation 483.0 304.2

Income tax expense 6 (118.0) (61.6)

Profit for the year

365.0 242.6

Earnings per ordinary share – Basic 5 297.7p 196.9p

Earnings per ordinary share – Diluted 5 296.3p 196.2p

* All attributable to equity holders of the parent.

Adjusting items

Note

2023

£m

2022

£m

Gross profit

Gross profit per the Group Income Statement 648.7 442.8

Adjusting item: net legacy building safety expense 2 38.6 344.2

Underlying gross profit 687.3 787.0

Operating profit

Operating profit per the Group Income Statement 505.3 309.0

Adjusting item: net legacy building safety expense 2 38.6 344.2

Underlying operating profit 543.9 653.2

Profit before taxation

Profit before taxation per the Group Income Statement 483.0 304.2

Adjusting item: net legacy building safety expense 2 49.6 346.2

Underlying profit before taxation 532.6 650.4

Profit for the year

Profit for the year per the Group Income Statement 365.0 242.6

Adjusting item: net legacy building safety expense 2 49.6 346.2

Adjusting item: income tax on net legacy building safety expense 2 (12.4) (70.3)

Underlying profit for the year 402.2 518.5

Accounts

162 Bellway p.l.c. Annual Report and Accounts 2023

Group Statement of Comprehensive Income

for the year ended 31 July 2023

 Note

2023

£m

2022

£m

Profit for the year 365.0 242.6

Other comprehensive expense

Items that will not be recycled to the income statement:

Remeasurement losses on defined benefit pension plans 22 (4.9) (3.5)

Income tax on other comprehensive expense 6 1.4 0.5

Other comprehensive expense for the year, net of income tax (3.5) (3.0)

Total comprehensive income for the year

361.5 239.6

* All attributable to equity holders of the parent.

163Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Statements of Changes in Equity

at 31 July 2023

Group Note

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Other

reserves

£m

Retained

earnings

£m

Total

equity

£m

Balance at 1 August 2021 15.4 179.8 20.0 1.5 3,071.1 3,287.8

Total comprehensive income

forthe year

Profit for the year – – – – 242.6 242.6

Other comprehensive expense

– – – – (3.0) (3.0)

Total comprehensive income

forthe year – – – – 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

optionsand tax thereon 6, 23 – – – – 2.8 2.8

Total contributions by and

distributions to shareholders – 2.2 – – (161.8) (159.6)

Balance at 31 July 2022 15.4 182.0 20.0 1.5 3,148.9 3,367.8

Total comprehensive income for

the year

Profit for the year – – – – 365.0 365.0

Other comprehensive expense

– – – – (3.5) (3.5)

Total comprehensive income

forthe year – – – – 361.5 361.5

Transactions with shareholders

recorded directly in equity:

Dividends on equity shares 20 – – – – (171.7) (171.7)

Credit in relation to share

optionsand tax thereon 6, 23 – – – – 4.5 4.5

Share buyback programme

andcancellation of shares 18, 19 (0.4) – 0.4 – (100.5) (100.5)

Total contributions by and

distributions to shareholders (0.4) – 0.4 – (267.7) (267.7)

Balance at 31 July 2023 15.0 182.0 20.4 1.5 3,242.7 3,461.6

* An additional breakdown is provided in the Group Statement of Comprehensive Income.

Accounts

164 Bellway p.l.c. Annual Report and Accounts 2023

Company Note

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Other

reserves

£m

Retained

earnings

£m

Total

equity

£m

Balance at 1 August 2021 15.4 179.8 20.0 2.1 388.0 605.3

Total comprehensive income

forthe year

Profit for the year – – – – 159.9 159.9

Other comprehensive income – – – – – –

Total comprehensive income

forthe year – – – – 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

Total comprehensive income for

the year

Profit for the year – – – – 171.5 171.5

Other comprehensive income – – – – – –

Total comprehensive income

forthe year – – – – 171.5 171.5

Transactions with shareholders

recorded directly in equity:

Dividends on equity shares 20 – – – – (171.7) (171.7)

Credit in relation to share options 23 – – – – 4.5 4.5

Share buyback programme and

cancellation of shares 18 ,19 (0.4) – 0.4 – (100.5) (100.5)

Total contributions by and

distributions to shareholders (0.4) – 0.4 – (267.7) (267.7)

Balance at 31 July 2023 15.0 182.0 20.4 2.1 290.2 509.7

165Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Balance Sheets

at 31 July 2023

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 £171.5 million (2022 – £159.9 million).

Note

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

ASSETS

Non-current assets

Property, plant and equipment 11 31.7 34.2 – –

Investments in subsidiaries 12 – – 48.0 43.5

Financial assets 12 38.6 20.9 – –

Equity accounted joint arrangements 12 4.9 9.3 – –

Deferred tax assets 6 1.7 0.1 – –

Retirement benefit assets 22 2.5 7.1 – –

79.4 71.6 48.0 43.5

Current assets

Inventories 7 4,575.6 4,423.6 – –

Trade and other receivables 8 88.3 114.6 443.8 509.7

Corporation tax receivable 8.8 – – –

Cash and cash equivalents 15 362.0 375.3 52.9 52.8

5,034.7 4,913.5 496.7 562.5

Total assets 5,114.1 4,985.1 544.7 606.0

LIABILITIES

Non-current liabilities

Interest-bearing loans and borrowings 15 130.0 130.0 – –

Trade and other payables 9 107.3 106.6 – –

Deferred tax liabilities 6 6.2 8.9 – –

Provisions 10 403.5 400.8 – –

647.0 646.3 – –

Current liabilities

Corporation tax payable – 0.1 0.4 –

Trade and other payables 9 900.8 930.2 34.6 0.1

Provisions 10 104.7 40.7 – –

1,005.5 971.0 35.0 0.1

Total liabilities 1,652.5 1,617.3 35.0 0.1

Net assets 3,461.6 3,367.8 509.7 605.9

EQUITY

Issued capital 18 15.0 15.4 15.0 15.4

Share premium 19 182.0 182.0 182.0 182.0

Capital redemption reserve 19 20.4 20.0 20.4 20.0

Other reserves 1.5 1.5 2.1 2.1

Retained earnings 3,242.7 3,148.9 290.2 386.4

Total equity 3,461.6 3,367.8 509.7 605.9

Approved by the Board of Directors on 16 October 2023 and signed on its behalf by:

John Tutte Keith Adey

Director Director

Registered number 1372603

Accounts

166 Bellway p.l.c. Annual Report and Accounts 2023

Cash Flow Statements

for the year ended 31 July 2023

Note

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Cash flows from operating activities

Profit for the year 365.0 242.6 171.5 159.9

Depreciation charge 11 6.0 6.1 – –

Finance income 16 (9.9) (1.6) (1.9) –

Finance expenses 16 30.8 15.7 – –

Share-based payment expense 23 4.5 3.1 – –

Share of post tax result of joint ventures 13 1.4 (9.3) – –

Income tax expense 6 118.0 61.6 0.4 –

Increase in inventories (152.0) (391.4) – –

Decrease/(increase) in trade and other receivables 28.7 (33.2) 66.5 2.6

Decrease in trade and other payables (75.3) (104.5) – (0.1)

Increase in provisions 55.7 325.5 – –

Cash from operations 372.9 114.6 236.5 162.4

Interest paid (6.9) (5.8) – –

Income tax paid (129.8) (63.8) – –

Net cash inflow from operating activities 236.2 45.0 236.5 162.4

Cash flows from investing activities

Acquisition of property, plant and equipment (2.7) (0.5) – –

Proceeds from sale of property, plant and equipment 0.1 0.1 – –

Increase in loans to joint ventures 12 (15.6) (2.1) – –

Repayment of loans by joint ventures 12 – 21.6 – –

Dividends from joint ventures 12 3.0 15.7 – –

Interest received 6.9 0.5 1.3 –

Net cash (outflow)/inflow from investing activities (8.3) 35.3 1.3 –

Cash flows from financing activities

Payment of lease liabilities 17 (3.5) (2.9) – –

Proceeds from the issue of share capital on exercise of

shareoptions – 2.2 – 2.2

Purchase of own shares – (7.4) – (7.4)

Share buyback programme 19 (66.0) – (66.0) –

Dividends paid 20 (171.7) (157.2) (171.7) (157.2)

Net cash outflow from financing activities (241.2) (165.3) (237.7) (162.4)

Net (decrease)/increase in cash and cash equivalents (13.3) (85.0) 0.1 –

Cash and cash equivalents at beginning of year 375.3 460.3 52.8 52.8

Cash and cash equivalents at end of year 15 362.0 375.3 52.9 52.8

167Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Accounting Policies

Basis of preparation

Bellway p.l.c. (the ‘Company’) is a company incorporated in England and Wales.

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 16 October 2023, 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.

Other financial statement considerations

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, and 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 either the Group’s or Company’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, except as noted below, been applied

consistently to all periods presented in these consolidated financial statements.

The Group recently acquired a number of contractual arrangements with landowners in order to promote their

land through the planning process to obtain detailed planning permission, and to subsequently market the sites for

residential property development on behalf of the landowner. These agreements are accounted for in inventory and

the amended inventories policy of the Group is included in note 7.

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 30 to 33. 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 34 to 37 and the Directors’ Report on pages 147 to 150. 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 2023, Bellway had net cash of £232.0 million

(note 15), having utilised cash of £13.3 million (note 15) during

the year, including £372.9 million of cash generated from operations.

Accounts

168 Bellway p.l.c. Annual Report and Accounts 2023

Going concern continued

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 2023,

expiring in tranches up to December 2027. 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 2023.

Including committed debt lines and cash, Bellway had access to total funds of £762.0 million, along with net current

assets (excluding cash) of £3,667.2 million at 31 July 2023, providing the Group with appropriate liquidity to meet its

current liabilities as they fall due.

The Group’s internal forecasts have been regularly updated, incorporating our actual experience along with our

expected future outturn. The latest available base forecast has been sensitised, setting out the Group’s resilience to

the principal risks and uncertainties in the most severe but plausible scenario. The sensitivity includes a recession due

to economic uncertainty and a deterioration in customer confidence. This could lead to a reduction in both the total

number of legal completions and private average selling price, with overheads, land spend and construction spend

reducing accordingly.

This sensitivity includes the following principal assumptions:

• Private completions in H1 FY24 are supported by the forward order book, but still fall to 55% of that achieved in H1 of

FY23. In the 12 months to 31 January 2025, 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 FY24 remains in line with internal forecasts due to the order book position. In the

12 months to 31 January 2025, 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 2025 for the going concern assessment, but extended

to the 31 July 2027 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 2025, 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

The Group adopted and applied the following amendments in the year, none of which had a material effect on the

financial statements:

• Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16.

• Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37.

• Annual Improvements to IFRS Standards 2018–2020.

• Reference to the Conceptual Framework – Amendments to IFRS 3.

• Pillar 2 minimum tax – Amendments to IAS 12 .

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.

169Bellway p.l.c. Annual Report and Accounts 2023

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 in to one reporting segment on the basis

that they share similar economic characteristics including:

• National supply agreements are in place for key inputs including materials.

• Debt is raised centrally and the cost of capital is the same at each division.

• Sales demand at each division is subject to the same macroeconomic factors, such as mortgage availability and

government policy.

Additional information on average selling prices and the unit sales split between north, south, private and social has

been included in the Group Finance Director’s Review on pages 34 to 37. The Board does not, however, consider these

categories to be separate reportable segments as they review the entire operations at a consolidated and divisional

level when assessing performance and making decisions about the allocation of resources.

Accounts

170 Bellway p.l.c. Annual Report and Accounts 2023

1. Revenue continued

Revenue from contracts with customers

An analysis of the Group’s revenue is as follows:

2023

£m

2022

£m

Housing revenue 3,396.3 3,520.6

Non-housing revenue 10.3 16.2

Total revenue 3,406.6 3,536.8

The Group’s housing revenue can be analysed as follows:

(a) Private/social

2023

£m

2022

£m

Private 2,931.3 3,190.9

Social 465.0 329.7

Total housing revenue 3,396.3 3,520.6

(b) North/South

2023

£m

2022

£m

North 1,608.8 1,543.9

South 1,787.5 1,976.7

Total housing revenue 3,396.3 3,520.6

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 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 2023 and 31 July 2022, 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 2023 and 31 July 2022 has been arrived at after recognising the following items

in the income statement:

2023

SRT and

associated

review

£m

2023

Structural

defects

£m

2023

Total

£m

2022

SRT and

associated

review

£m

2022

Structural

defects

£m

2022

Total

£m

Provisions (note 10) 58.1 30.5 88.6 347.0 – 347.0

Reimbursement assets (note 10) (50.0) – (50.0) (2.8) – (2.8)

Net cost of sales 8.1 30.5 38.6 344.2 – 344.2

Finance expenses (notes 10, 16) 11.0 – 11.0 2.0 – 2.0

Total net legacy building safety expense 19.1 30.5 49.6 346.2 – 346.2

The net legacy building safety expense has been expanded in the current financial year to include structural defects relating to

a legacy building, as explained below. In previous years, the net legacy building safety expense only included items related to

the SRT and associated review.

The income tax rate applied to the total net legacy building safety expense in the income statement is the Group’s standard rate

of income tax, including both corporation tax and Residential Property Developer Tax (‘RPDT’), of 25.0% (2022 – 20.3%).

171Bellway p.l.c. Annual Report and Accounts 2023

Accounts

2. Net legacy building safety expense continued

SRT and associated review

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.

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 Funds in accordance with the principles set out in the Pledge. The Group signed the Self-Remediation Terms

(‘SRT’) on 13 March 2023 which converted the principles of the Pledge into a binding agreement for the housebuilding industry.

On 25 May 2023, the Group also contractually committed to remediate its legacy buildings in Wales by signing the Pact with

The Welsh Ministers (the ‘Pact’).

In total, for the year ended 31 July 2023 Bellway set aside a net exceptional pre-tax expense of £19.1 million (2022 – £346.2 million),

in relation to the SRT and associated review. Of this expense, a net £8.1 million (2022 – £344.2 million) is recognised in cost of

sales and an adjusting finance expense of £11.0 million (2022 – £2.0 million) in relation to the unwinding of the discount of the

provision to present value. The net amount recognised in cost of sales includes £129.7 million (2022 – £349.5 million) relating to

cost estimate increases, which are in part offset by both provision releases of £38.6 million (2022 – £2.5 million) and £33.0 million

(2022 – £nil) following an increase in discount rates during the year (note 10).

While the SRT and the Pact relates to developments in England and Wales, 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, where remediation

is required. Taking this into consideration, the total amount Bellway has set aside in relation to the SRT and associated review since

2017 is £582.8 million (2022 – £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.

The provision 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 four 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 Publicly Available Specification (‘PAS’) 9980:2022, liaison and negotiations

with building owners, and appointment of contractors.

Notwithstanding these complexities the Group has made good progress with work now completed on 9 developments,

underway on 12 developments and works due to commence on a further 2 developments in first half of the new financial year.

The net exceptional cost of sales expense includes one-off cost recoveries of £50.0 million, across several sites, which have

been pursued for several years.

Total recoveries recognised since 2017 are £80.0 million (2022 – £30.0 million). Reimbursement assets of £nil (2022 – £nil)

remained outstanding at the year end.

Structural defects

During the year a structural defect relating to the reinforced concrete frame was identified at a historical high-rise apartment

scheme in Greenwich, London with the remediation work expected to cost £30.5 million. This cost estimate is based on an

expert third-party report and reflects management’s expected scope of works. A provision has been recognised as Bellway

has a legal obligation to undertake the remedial work.

The provision calculation uses the expected timings of cash outflows which are adjusted for future estimated cost inflation in

accordance with the BCIS index. 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 Group is carrying out a review of other buildings constructed by, or on behalf of Bellway, where the same third parties

responsible for the design of the frame in the Greenwich development have been involved. To date, no other similar design

issues with reinforced concrete frames have been identified.

We are actively seeking recoveries in relation to the structural defect identified, but as these are not virtually certain at the

balance sheet date, no reimbursement assets have been recognised.

The cash outflow is expected to be over the next two financial years.

Notes to the Financial Statements continued

Accounts

172 Bellway p.l.c. Annual Report and Accounts 2023

3. Cost of sales recognition

Cost of sales recognition

Cost of sales is recognised for completed house sales as an allocation of the latest whole site/phase gross margin

which is an output of the site/phase valuation. These valuations, which are updated at frequent intervals throughout

the life of the site/phase, use actual and forecast selling prices, land costs and construction costs and are sensitive

to future movements in both the estimated cost to complete and expected selling prices. Forecast selling prices are

inherently uncertain due to changes in market conditions. This is a key estimate made in the financial statements.

To determine the amount of cost of sales that the Group should recognise on its sites/phases in the year, the Group

needs to allocate site/phase wide costs between all plots, both those already sold, and those plots to be sold in

future periods. The Group generally allocates site/phase wide costs based on expected total revenue unless this

does not reflect an appropriate apportionment of the costs. It is also necessary to estimate costs to complete on such

sites/phases. In addition, the Group makes estimates in relation to future sales prices on the site/phase. The Group

has a number of internal controls to assess and review the reasonableness of estimates made. If housing gross

margin decreased by 200 basis points, it is estimated that the quantum of housing cost of sales would increase by

around 2.5%.

4. Operating profit

4a. Part-exchange properties

Part-exchange properties

The purchase and subsequent sale of part-exchange properties is an activity undertaken in order to achieve the

sale of a new property. The original sale of private housing is recognised 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

2023

£m

2022

£m

Staff costs (note 21) 223.2 193.1

Depreciation of property, plant and equipment (note 11) 6.0 6.1

Hire of plant and machinery 17.6 17.1

4c. Auditor’s remuneration

2023

£000

2022

£000

Audit of these financial statements 84 64

Amounts receivable by the auditor and its associates in respect of:

Audit of financial statements of subsidiaries pursuant to legislation 408 370

Pension scheme audit 20 17

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 £0.021 million

(2022 – £0.020 million).

173Bellway p.l.c. Annual Report and Accounts 2023

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 Company or 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

2023

£m

Weighted

average

number of

ordinary

2023

Number

Earnings

per share

2023

Earnings

2022

£m

Weighted

average

number of

ordinary

2022

Number

Earnings per

2022

For basic earnings per ordinary share 365.0 122,593,350 297.7 242.6 123,227,544 196.9

Dilutive effect of options and awards 600,864 (1.4) 416,029 (0.7)

For diluted earnings per ordinary share 365.0 123,194,214 296.3 242.6 123,643,573 196.2

Underlying basic and underlying diluted earnings per share exclude the effect of adjusting items and any associated net tax

amounts. Reconciliations of these are outlined below:

Underlying

earnings

2023

£m

Weighted

average

number of

ordinary

2023

Number

Underlying

earnings per

2023

Underlying

earnings

2022

£m

Weighted

average

number of

ordinary

2022

Number

Underlying

earnings per

2022

For basic underlying earnings per

ordinary share 402.2 122,593,350 328.1 518.5 123,227,544 420.8

Dilutive effect of options and awards 600,864 (1.6) 416,029 (1.4)

For diluted underlying earnings per

ordinary share 402.2 123,194,214 326.5 518.5 123,643,573 419.4

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.

Notes to the Financial Statements continued

Accounts

174 Bellway p.l.c. Annual Report and Accounts 2023

6. Taxation continued

6a. Income tax recognised in the income statement

2023

£m

2022

£m

Current tax expense/(income):

UK corporation tax 101.8 56.8

Residential property developer tax 18.6 3.5

Adjustments in respect of prior years 0.5 (0.4)

120.9 59.9

Deferred tax (income)/expense:

Origination and reversal of temporary differences (1.6) 0.8

Effect of introduction of residential property developer tax – 0.8

Adjustments in respect of prior years (1.3) 0.1

(2.9) 1.7

Total income tax expense in income statement 118.0 61.6

2023

£m

2022

£m

Reconciliation of effective tax rate

Profit before taxation 483.0 304.2

Tax calculated at UK income tax rate 25.0 120.8 20.3 61.8

Non-taxable income and enhanced deductions (0.4) (2.0) (0.2) (0.7)

Adjustments in respect of prior years – current tax 0.1 0.5 (0.1) (0.4)

– deferred tax (0.3) (1.3) – 0.1

Effect of residential property developer tax – deferred tax – – 0.2 0.8

Effective tax rate and tax expense for the year 24.4 118.0 20.2 61.6

The effective tax expense is 24.4% of profit before taxation (2022 – 20.2%). Both the standard tax rate and effective tax rate

include RPDT.

As part of the UK adoption of the Organisation for Economic Cooperation and Development (‘OECD’) Pillar Two rules, the UK

government announced two new taxes, the Multinational Top-up Tax and the Domestic Top-up Tax which are designed to

ensure corporations pay tax at a rate of at least 15%. The Domestic Top-up Tax will apply to the Group from 1 August 2024.

As the Group’s current effective tax rate is in excess of 15%, it is expected the introduction of this tax will not affect Bellway.

The Multinational Top-up Tax is not expected to affect Bellway.

It is currently expected that the Group’s standard rate of tax, including RPDT, for the year ending 31 July 2024 will be 29%.

6b. Tax recognised in equity and other comprehensive income

2023

£m

2022

£m

Deferred tax recognised directly in equity and other comprehensive income:

Credit relating to remeasurements on the defined benefit pension scheme 1.4 0.5

Charge relating to equity-settled transactions – (0.3)

175Bellway p.l.c. Annual Report and Accounts 2023

Accounts

6. Taxation continued

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

Unutilised tax

losses

£m

Total

£m

At 1 August 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 comprehensive income – 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)

Income statement credit 0.2 – 0.2 1.1 1.4 2.9

Credit to equity – 1.4 – – – 1.4

At 31 July 2023 (1.4) (0.7) 0.3 (4.1) 1.4 (4.5)

The following is an analysis of the deferred tax balances for financial reporting purposes:

2023

£m

2022

£m

Share-based payments 0.3 0.1

Unutilised tax losses 1.4 –

Deferred tax assets 1.7 0.1

Capital allowances (1.4) (1.6)

Retirement benefit assets (0.7) (2.1)

Inventory (4.1) (5.2)

Deferred tax liabilities (6.2) (8.9)

Net deferred tax liability (4.5) (8.8)

The carrying amount of the gross deferred tax assets are reviewed at each balance sheet date and are 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 comparative year were revalued at the substantively

enacted corporation tax rate that will be effective when they are expected to be realised. The deferred tax assets/(liabilities)

were 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.

There are no deferred tax balances in respect of the Company.

Notes to the Financial Statements continued

Accounts

176 Bellway p.l.c. Annual Report and Accounts 2023

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 comprises: land held for development; options purchased in respect of land; investments in land without the

benefit of planning consent; and, promotion agreements in respect of land without the benefit of planning consent.

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.

Promotion agreements in respect of land without the benefit of planning consent comprise initial costs of entering

into the agreements. These costs are capitalised initially at cost. Regular reviews are carried out for impairment in

the values of these costs incurred and provisions made accordingly to reflect loss of value. The impairment reviews

consider the likelihood of securing planning permission, the successful marketing of the site and the remaining life of

the promotion agreement.

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 2023 and 31 July 2022, 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.

177Bellway p.l.c. Annual Report and Accounts 2023

Accounts

7. Inventories continued

Group

2023

£m

2022

£m

Land 2,578.8 2,786.4

Work-in-progress 1,861.6 1,524.8

Showhomes 117.2 107.0

Part-exchange properties 18.0 5.4

4,575.6 4,423.6

Inventories of £2,662.0 million were expensed in the year (2022 – £2,693.7 million).

In the ordinary course of business, inventories have been written down by a net £18.4 million in the year (2022 – £4.8 million).

Land with a carrying value of £212.0 million (2022 – £295.6 million) was used as security for land payables (note 9).

Land includes £1,913.3 million (2022 – £1,812.3 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 and work-

in-progress interests of £25.4 million. During the prior year, the Group acquired 100% of the share capital of a private limited

company to access land interests of £8.4 million. These acquisitions did not satisfy the requirements of a business combination,

therefore the inventory relating to these amounts is included in ‘land’ and ‘work-in-progress’ in the above table.

The anticipated costs relating to the adoption of the Future Homes Standard in 2025, and the interim standard in 2023,

are included within the carrying value of inventories as at 31 July 2023, where appropriate.

The Directors consider all inventories to be essentially current in nature although the Group’s operational cycle is such that

a proportion of inventories will not be realised within 12 months. It is not possible to determine with accuracy when specific

inventory will be realised as this is subject to a number of factors including consumer demand and planning permission delays.

The Company has no inventory.

8. Trade and other receivables

Trade and other receivables

Trade and other receivables are stated at their fair value at the date of initial recognition and subsequently at

amortised cost less allowances for impairment. Amounts recoverable on certain social housing contracts where

revenue is recognised over time are included in trade receivables to the extent that they have been invoiced,

or if not they are included within prepayments and accrued income, and are stated as the amount due less any

foreseeable losses.

The loss allowance for amounts owed by Group undertakings is equal to the 12-month expected credit losses unless

there has been a significant increase in credit risk since the date of initial recognition, in which case the loss allowance

is equal to the lifetime expected credit loss. A significant increase in credit risk is deemed to have occurred if a review

of available information indicates an increased probability of default.

Current receivables

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Trade receivables 34.6 47.5 – –

Other receivables 36.5 59.2 – –

Amounts owed by Group undertakings – – 443.2 509.7

Prepayments and accrued income 17.2 7.9 0.6 –

88.3 114.6 443.8 509.7

The Group assesses the ageing of trade receivables in accordance with the policy on page 76. None of the trade receivables

are past their due dates (2022 – £nil), and are therefore all rated as low risk.

Other receivables includes £26.1 million (2022 – £43.7 million) in relation to VAT recoverable.

Included within prepayments and accrued income are non-current prepayments of £0.4 million (2022 – £0.5 million).

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 and other

receivables as immaterial.

Notes to the Financial Statements continued

Accounts

178 Bellway p.l.c. Annual Report and Accounts 2023

9. Trade and other payables

Trade and other payables

Trade and other payables on normal terms are not interest-bearing and are stated at their nominal value.

Trade payables on deferred terms, most notably in relation to land purchases, are recorded initially at the fair value of

all expected future payments. The discount to nominal value is amortised over the period to settlement and charged

to finance expenses.

Leases

The lease liability is initially measured at the present value of the remaining lease payments, discounted using

the Group’s incremental borrowing rate. The lease term comprises the non-cancellable period of the contract,

together with periods covered by an option to extend the lease where the Group is reasonably certain to exercise

that option. Subsequently, the lease liability is measured by increasing the carrying amount to reflect interest on the

lease liability, and reducing it by the lease payments made. The lease liability is remeasured when the Group changes

its assessment of whether it will exercise an extension or termination option.

Right-of-use assets are initially measured at cost, comprising the initial measurement of the lease liability, plus any

initial direct costs and an estimate of asset retirement obligations, less any lease incentives. Subsequently, right-of-use

assets are measured at cost, less any accumulated depreciation and any accumulated impairment losses, and are

adjusted for certain remeasurements of the lease liability. Depreciation is calculated on a straight-line basis over the

length of the lease.

The Group has elected to apply exemptions for short-term leases and leases for which the underlying asset is of low

value. For these leases, payments are charged to the income statement on a straight-line basis over the term of the

relevant lease.

Right-of-use assets are presented in property, plant and equipment on the balance sheet and lease liabilities are

shown on the balance sheet in trade and other payables in current liabilities and non-current liabilities.

Payments on account

Payments on account, measured at amortised cost, are recorded as a liability on receipt and are released to the

income statement when revenue is recognised in accordance with the Group’s revenue recognition policy.

Non-current liabilities

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Land payables 95.4 92.3 – –

Lease liabilities 11.9 14.3 – –

107.3 106.6 – –

Land payables of £68.8 million (2022 – £60.8 million) are secured on the land to which they relate.

The carrying value of the land used for security is £65.4 million (2022 – £59.9 million).

Current liabilities

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Trade payables 306.2 284.0 – –

Land payables 273.4 301.1 – –

Social security and other taxes 7.7 7.2 – –

Other payables 5.0 9.2 0.1 0.1

Lease liabilities 3.1 2.9 – –

Accrued expenses 147.0 147.6 – –

Payments on account 123.9 178.2 – –

Share buyback obligation 34.5 – 34.5 –

900.8 930.2 34.6 0.1

Land payables of £151.7 million (2022 – £240.1 million) are secured on the land to which they relate.

The carrying value of the land used for security is £146.6 million (2022 – £235.7 million).

179Bellway p.l.c. Annual Report and Accounts 2023

Accounts

9. Trade and other payables continued

Payments on account comprises deposits received in advance which are contract liabilities. Deposits received in advance

are typically held for up to 18 months before the associated performance obligations are satisfied and the revenue is

recognised. The majority of these contract liabilities as at 31 July 2022 have been recognised as revenue in the current year.

The approximate transaction value allocated to the performance obligations that are unsatisfied at 31 July 2023 is £1,193.5 million

(2022 – £2,114.3 million), the majority of which is expected to be recognised as revenue during the next financial year.

On 19 June 2023, the Group entered into an irrevocable non-discretionary share buyback programme to purchase up to

£50.0 million of shares as part of Tranche 2 of our share buyback programme. The remaining share buyback of £34.5 million

outstanding at 31 July 2023 was recognised as a financial liability.

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.

SRT and associated review

The Directors consider that their assessment and judgement of the SRT and associated review 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,

have 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

SRT and associated review provision, the scope of the works and the provision could be extended should the scope of

the SRT or latest interpretation of government guidance further evolve (note 24).

SRT and associated review

The SRT and associated review 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 SRT or fire safety regulations further evolve. If:

• cost estimates increase by 5%, the provision at 31 July 2023 would increase by around £24 million.

• the discount rate increases by 100 bps, the provision at 31 July 2023 would decrease by around £11 million.

Notes to the Financial Statements continued

Accounts

180 Bellway p.l.c. Annual Report and Accounts 2023

10. Provisions and reimbursement assets continued

SRT and associated review Structural defects Total legacy building safety improvements

Provision

£m

Reimbursement

assets

£m

Total

£m

Provision

£m

Reimbursement

assets

£m

Total

£m

Provision

£m

Reimbursement

assets

£m

Total

£m

At 1 August 2022 (441.5) – (441.5) – – – (441.5) – (441.5)

Adjusting item – cost of sales

(note 2) (58.1) 50.0 (8.1) (30.5) – (30.5) (88.6) 50.0 (38.6)

Analysed as:

Additions (129.7) 50.0 (79.7) (30.5) – (30.5) (160.2) 50.0 (110.2)

Released 38.6 – 38.6 – – – 38.6 – 38.6

Change in discount rate 33.0 – 33.0 – – – 33.0 – 33.0

Utilised/(received) 32.9 (50.0) (17.1) – – – 32.9 (50.0) (17.1)

Unwinding of discount

(notes 2, 16) (11.0) – (11.0) – – – (11.0) – (11.0)

At 31 July 2023 (477.7) – (477.7) (30.5) – (30.5) (508.2) – (508.2)

The provision is classified as follows:

SRT and

associated

review

£m

Structural

defects

£m

Total legacy

building safety

improvements

£m

Current (99.6) (5.1) (104.7)

Non-current (378.1) (25.4) (403.5)

Total (477.7) (30.5) (508.2)

The Group has established a provision for the cost of performing fire remedial works on a number of legacy developments and

a structural defect relating to a historical high rise apartment scheme (note 2).

The Company has no provisions.

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.

181Bellway p.l.c. Annual Report and Accounts 2023

Accounts

11. Property, plant and equipment continued

Group

Land and

property

£m

Plant,

fixtures

and fittings

£m

Right-of-use

assets

£m

Total

£m

Cost

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 1 August 2022 16.9 16.0 25.2 58.1

Additions 1.3 1.4 1.0 3.7

Disposals – (1.3) (1.5) (2.8)

At 31 July 2023 18.2 16.1 24.7 59.0

Depreciation

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 1 August 2022 3.3 10.7 9.9 23.9

Charge for year 0.4 2.3 3.3 6.0

On disposals – (1.2) (1.4) (2.6)

At 31 July 2023 3.7 11.8 11.8 27.3

Net book value

At 31 July 2023 14.5 4.3 12.9 31.7

At 31 July 2022 13.6 5.3 15.3 34.2

At 31 July 2021 13.7 6.6 15.4 35.7

The Company has no property, plant and equipment.

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 2023, the Group was made up of 24 subsidiaries and

8 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 arrangements at 31 July:

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Subsidiary undertakings

Interest in subsidiary undertakings’ shares at cost – – 48.0 43.5

Financial assets and equity accounted joint arrangements

Financial assets – loan to joint ventures 38.6 20.9 – –

Interest in joint ventures – equity 4.9 9.3 – –

43.5 30.2 – –

43.5 30.2 48.0 43.5

Notes to the Financial Statements continued

Accounts

182 Bellway p.l.c. Annual Report and Accounts 2023

12. Financial assets and equity accounted joint arrangements, and investments in subsidiaries continued

The movement on both the equity accounted joint ventures and related financial assets during the year is as follows:

2023

£m

2022

£m

At the start of the year 30.2 55.3

Increase in loans 17.7 2.9

Repayment of loans – (21.6)

Dividends received from equity accounted joint ventures (3.0) (15.7)

Share of result (1.4) 9.3

At the end of the year 43.5 30.2

13. Joint arrangements

DFE TW Residential Limited, Cramlington Developments Limited, Leebell Developments Limited and Langley Sustainable Urban

Extension 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:

2023 2022

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 0.7 16.3 43.8 4.7 65.5 4.7 15.9 36.9 2.8 60.3

Current liabilities (0.9) (1.7) (42.9) (4.7) (50.2) (2.4) (1.8) (26.6) (2.8) (33.6)

Non-current liabilities – (4.6) (5.8) – (10.4) – (5.4) (12.0) – (17.4)

Share of net assets/

(liabilities) of joint

ventures (0.2) 10.0 (4.9) – 4.9 2.3 8.7 (1.7) – 9.3

Revenue 3.9 6.7 – – 10.6 49.0 9.2 – – 58.2

Costs (3.5) (5.4) (0.6) – (9.5) (40.2) (7.2) – – (47.4)

Operating profit 0.4 1.3 (0.6) – 1.1 8.8 2.0 – – 10.8

Interest 0.1 – (2.6) – (2.5) – (0.1) (1.4) – (1.5)

Share of result of

joint ventures 0.5 1.3 (3.2) – (1.4) 8.8 1.9 (1.4) – 9.3

Share of dividends paid to

joint venture partners (3.0) – – – (3.0) (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

2023

£m

2022

£m

Contracted not provided – –

Authorised not contracted – 1.5

Company

The commitments of the Company were £nil (2022 – £nil).

183Bellway p.l.c. Annual Report and Accounts 2023

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.

Where bank agreements include a legal right of offset for in hand and overdraft balances, and the Group intends to

settle the net outstanding position, the related balances are offset to record the net position in the balance sheet.

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

2023

£m

2022

£m

Decrease in net cash and cash equivalents (13.3) (85.0)

Decrease in net cash from cash flows (13.3) (85.0)

Net cash at 1 August 245.3 330.3

Net cash at 31 July 232.0 245.3

Company

2023

£m

2022

£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 52.8

Net cash at 31 July 52.9 52.8

The Group is party to banking agreements that include a legal right of offset, which enables the overdraft balances within

subsidiary entities of £7.8 million (2022: £7.6 million) to be settled net with in hand cash balances.

15b. Analysis of net cash

Group

At 1 August

2022

£m

Cash

flows

£m

At 31 July

2023

£m

Cash and cash equivalents 375.3 (13.3) 362.0

Fixed rate sterling USPP notes (130.0) – (130.0)

Net cash 245.3 (13.3) 232.0

Company

At 1 August

2022

£m

Cash

flows

£m

At 31 July

2023

£m

Cash and cash equivalents 52.8 0.1 52.9

Net cash 52.8 0.1 52.9

Notes to the Financial Statements continued

Accounts

184 Bellway p.l.c. Annual Report and Accounts 2023

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.

2023

£m

2022

£m

Interest receivable on bank deposits 7.2 0.5

Net interest on defined benefit asset 0.3 0.1

Other interest receivable 2.4 1.0

Finance income 9.9 1.6

2023

£m

2022

£m

Interest payable on bank loans and overdrafts 2.8 2.5

Interest payable on fixed rate sterling USPP notes 3.4 3.4

Interest on deferred term land payables 13.1 7.3

Unwinding of the discount on the SRT and associated review provision 11.0 2.0

Interest payable on leases 0.5 0.5

Finance expenses 30.8 15.7

The unwinding of the discount on the SRT and associated review 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.

Financial guarantee contracts

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 in accordance with IFRS 9 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.

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 2023 368.8 381.1 276.0 61.6 26.0 17.5

At 31 July 2022 393.4 401.5 304.6 72.2 18.7 6 .0

185Bellway p.l.c. Annual Report and Accounts 2023

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)

311.2 311.2 311.2 – – –

Fixed rate sterling USPP notes 130.0 149.8 3.4 3.4 89.4 53.6

Lease liabilities 15.0 17.5 3.6 3.6 6.5 3.8

Share buyback obligation 34.5 34.5 34.5 – – –

At 31 July 2023 490.7 513.0 352.7 7.0 95.9 57.4

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

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 £400.0 million (2022 – £400.0 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 2023 and 31 July 2022 for both the Group and the

Company are shown in note 15.

The average interest rate earned on the cash and cash equivalents balance as at 31 July 2023, excluding joint ventures,

was 4.16% (2022 – 0.43%).

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

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Loans and receivables 109.7 127.6 443.2 509.7

Cash and cash equivalents 362.0 375.3 52.9 52.8

Financial liabilities at amortised cost (859.5) (833.8) (34.6) (0.1)

(387.8) (330.9) 461.5 562.4

Reconciliation of liabilities arising from financing activities

Group

At 1 August

£m

Net

cash flows

£m

New leases

£m

Share buyback

programme

£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 (3.5) 1.0 – (0.2) 0.5 15.0

Share buyback obligation – (66.0) – 100.5 – – 34.5

At 31 July 2023 147.2 (72.9) 1.0 100.5 (0.2) 3.9 179.5

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

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

186 Bellway p.l.c. Annual Report and Accounts 2023

17. Financial instruments continued

Bank facilities

The Group had bank facilities of £400.0 million as at 31 July 2023 (2022 – £400.0 million) which expire during the course of the

following financial years:

Group

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

By 31 July 2023 – 50.0 – –

By 31 July 2024 – 245.0 – –

By 31 July 2025 50.0 30.0 – –

By 31 July 2026 100.0 75.0 – –

By 31 July 2027 100.0 – – –

By 31 July 2028 150.0 – – –

400.0 400.0 – –

Fixed rate sterling USPP notes

During 2021, 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

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£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

2023

£m

Group

2022

£m

Company

2023

£m

Company

2022

£m

Equity 3,461.6 3,367.8 509.7 605.9

Net debt – – – –

Capital employed 3,461.6 3,367.8 509.7 605.9

Risks

Details of the risks relating to financial instruments are set out in the Risk Management section on page 76.

Company

Relating to subsidiaries

The Company is a guarantor to bank and USPP indebtedness of other companies within the Group. Based on the liquidity and

expected cash generation of these other companies, the expected credit loss in respect of these financial guarantees, as at

31 July, is not expected to be significant. As a result, no liability has been recognised in these financial statements (2022 – nil).

A potential liability may arise if one of the companies that is part of the cross-guarantee defaults. Each guarantor, including the

Company, would be liable to cover any outstanding amounts.

Relating to joint arrangements

The Company has guaranteed the overdrafts of joint arrangements up to a maximum of £0.3 million (2022 – £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.

187Bellway p.l.c. Annual Report and Accounts 2023

Accounts

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.

Group and Company

2023

Number

000

2023

£m

2022

Number

000

2022

£m

Allotted, called up and fully paid 12.5p ordinary shares

At start of year 123,486 15.4 123,396 15.4

Issued on exercise of options 2 – 90 –

Cancellation of shares (2,929) (0.4) – –

At end of year 120,559 15.0 123,486 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.

During the year, the Company purchased 2,928,794 of its own ordinary shares for a total consideration of £66.0 million,

including transaction costs of £0.5 million. All shares purchased were for cancellation, as part of the £100.0 million share buyback

programme entered into on 28 March 2023. During the year 2,928,794 shares were cancelled and nil were held in treasury by

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 nil

(2022 – 268,240) shares were purchased by the Trust and the Trust transferred 3,913 (2022 – 38,978) shares to employees and

Directors. The number of shares held within the Trust and on which dividends have been waived, at 31 July 2023 was 327,202

(2022 – 331,115). These shares are held within the financial statements at a cost of £8.8 million (2022 – £8.9 million). The market

value of these shares at 31 July 2023 was £7.3 million (2022 – £8.1 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.

During the year, the Company purchased 2,928,794 of its own shares which it cancelled. On cancellation of the shares,

the aggregate nominal value of £0.4 million was transferred from share capital to the capital redemption reserve.

This reserve is not distributable.

Notes to the Financial Statements continued

Accounts

188 Bellway p.l.c. Annual Report and Accounts 2023

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.

2 023

£m

2022

£m

Amounts recognised as distributions to equity holders in the year:

Final dividend for the year ended 31 July 2022 of 95.0p per share (2021 – 82.5p) 117.0 101.8

Interim dividend for the year ended 31 July 2023 of 45.0p per share (2022 – 45.0p) 54.7 55.4

171.7 157.2

Proposed final dividend for the year ended 31 July 2023 of 95.0p per share (2022 – 95.0p) 114.5 117.0

The 2023 proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 15 December

2023 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 2022, 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.

Directors and employees

21. Employee information

Group employment costs, including directors, comprised:

2023

£m

2022

£m

Wages and salaries 191.5 167.0

Social security 18.4 16.2

Pension costs (note 22) 8.8 6.8

Share-based payments (note 23) 4.5 3.1

223.2 193.1

The average number of persons employed by the Group during the year was 3,130 (2022 – 2,978) comprising 1,170 (2022 – 1,116)

administrative and 1,960 (2022 – 1,862) 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 126

to 138.

Key management personnel remuneration, including directors, comprised:

2023

£m

2022

£m

Salaries and fees 3.3 3.1

Taxable benefits 0.2 0.2

Annual cash bonus 0.6 2.7

Pension costs 0.1 0.1

Share-based payments 1.7 1.6

5.9 7.7

Key management personnel, as disclosed under IAS 24 ‘Related party disclosures’, comprises the Directors and other senior

operational management.

189Bellway p.l.c. Annual Report and Accounts 2023

Accounts

22. Retirement benefit assets

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 £8.8 million (2022 – £6.8 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.

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 2023.

With regard to the Scheme, regular contributions made by the employer over the financial year were £nil (2022 – £nil).

The employer paid no special contributions (2022 – £nil) and reimbursed the pension fund £nil (2022 – £0.3 million) for expenses

incurred by the fund.

The Group is expected to make no regular contributions during the year ending 31 July 2024.

(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.

Notes to the Financial Statements continued

Accounts

190 Bellway p.l.c. Annual Report and Accounts 2023

22. Retirement benefit asset continued

Movements in net defined benefit assets

Defined benefit obligation Fair value of Scheme assets Net defined benefit asset

2023

£m

2022

£m

2023

£m

2022

£m

2023

£m

2022

£m

Balance at 1 August (48.9) (63.6) 56.0 73.8 7.1 10.2

Included in the income statement

Interest (expense)/income (1.7) (1.1) 2.0 1.2 0.3 0.1

(1.7) (1.1) 2.0 1.2 0.3 0.1

Included in other comprehensive

income/(expense)

Remeasurement gain arising from:

– Change in demographic and

financial assumptions 8.8 14.5 – – 8.8 14.5

– Experience adjustments (2.1) (0.6) – – (2.1) (0.6)

Return on plan assets excluding

interest income – – (11.6) (17.4) (11.6) (17.4)

6.7 13.9 (11.6) (17.4) (4.9) (3.5)

Other

Contributions paid by the employer – – – 0.3 – 0.3

Benefits paid 2.4 1.9 (2.4) (1.9) – –

2.4 1.9 (2.4) (1.6) – 0.3

Balance at 31 July (41.5) (48.9) 44.0 56.0 2.5 7.1

The weighted average duration of the defined benefit obligation at the end of the reporting period is 12 years (2022 – 14 years).

Scheme assets

The fair value of the Scheme assets is:

2023

£m

2022

£m

Diversified growth fund 14.7 21.5

Government bonds – 8.9

Corporate bonds 5.2 7.8

Liability driven instruments 18.7 11.3

Insurance policies annuities 5.2 6.0

Cash and cash equivalents 0.2 0.5

Total 44.0 56.0

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:

2023

% per annum

2022

% per annum

Discount rate 5.10 3.50

Future salary increases 3.60 3.50

Allowance for pension in payment increases of RPI or 5% p.a. if less 2.90 2.80

Allowance for deferred pension increases of CPI or 3% p.a. if less 2.10 2.00

Allowance for commutation of pension for cash at retirement

15% of

pension

15% of

pension

191Bellway p.l.c. Annual Report and Accounts 2023

Accounts

22. Retirement benefit asset continued

The mortality assumptions adopted at 31 July 2023 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 2023 22.3 years

Female retiring in 2023 24.2 years

Male retiring in 2043 23.6 years

Female retiring in 2043 25.6 years

The mortality assumptions adopted at 31 July 2022 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 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

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 1.1%

Inflation – RPI +0.10% p.a. Increase by 1.0%

Mortality +1 year life expectancy Increase by 3.2%

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.

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 does not take place due to non-market conditions not being met. Various option pricing models are used

according to the terms of the option scheme under which the options were granted. The fair value is spread over

the period during which the employees become unconditionally entitled to the options. At the balance sheet date,

if it is expected that non-market conditions will not be satisfied, the cumulative expense recognised in relation to the

relevant options is reversed.

With respect to share-based payments, a deferred tax asset is recognised on the relevant tax base. The tax base is

then compared to the cumulative share-based payment expense recognised in the income statement. Deferred tax

arising on the excess of the tax base over the cumulative share-based payment expense recognised in the income

statement has been recognised directly in equity outside the SOCI as share-based payments are considered to be

transactions with shareholders.

Where the Company grants options over its own shares to employees of its subsidiaries it recognises, in its individual

financial statements, an increase in the cost of investment in its subsidiaries equivalent to the equity settled share-

based payment charge recognised in its consolidated financial statements, with the corresponding credit being

recognised in equity.

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 2023 no options had been granted under this scheme.

Notes to the Financial Statements continued

Accounts

192 Bellway p.l.c. Annual Report and Accounts 2023

23. Share-based payments continued

Options issued under the SRSOS are offered to all employees including the Executive Directors.

An outline of the performance conditions in relation to the LTIP is detailed under the long-term incentive scheme section on

pages 131 to 135 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

2023

Weighted

average

exercise price

2023

Number of

options

No.

2022

Weighted

average

exercise price

2022

Number of

options

No.

Outstanding at the beginning of the year – 329,279 – 316,427

Granted during the year – 222,974 – 121,569

Lapsed during the year – (88,717) – (69,742)

Exercised during the year – (3,913) – (38,975)

Outstanding at the end of the year – 459,623 – 329,279

Exercisable at the end of the year – 88 – 451

The options outstanding at 31 July 2023 have a weighted average contractual life of 1.5 years (2022 – 1.4 years). The weighted

average share price at the date of exercise for share options exercised during the year was 1,906.6p (2022 – 3,148.4p).

SRSOS

2023

Weighted

average

exercise price

2023

Number of

options

No.

2022

Weighted

average

exercise price

2022

Number of

options

No.

Outstanding at the beginning of the year 2,445.4 442,082 2,404.8 525,421

Granted during the year 1,550.0 684,517 2,535.0 158,154

Forfeited during the year 2,337.5 (371,508) 2,450.3 (151,655)

Exercised during the year 1,892.8 (1,107) 2,357.3 (89,838)

Outstanding at the end of the year 1,686.5 753,984 2,445.4 442,082

Exercisable at the end of the year 2,528.0 356 2,185.5 2,522

The options outstanding at 31 July 2023 have an exercise price in the range of 1,550.0p to 2,535.0p (2022 – 1,892.8p to 2,934.4p)

and have a weighted average contractual life of 3.3 years (2022 – 2.4 years). The weighted average share price at the date of

exercise for share options exercised during the year was 2,445.7p (2022 – 2,825.1p).

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 in 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).

For LTIP options granted from October 2022, 20% of the performance criteria is based on TSR against comparator companies,

20% is based on TSR measured against the FTSE 250 Index (excluding investment trusts and financial service companies),

20% is based on EPS, 20% is based on ROCE, with the final 20% split evenly between ESG targets on Scope 1 and 2 emissions

and waste per unit.

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.

193Bellway p.l.c. Annual Report and Accounts 2023

Accounts

23. Share-based payments continued

The fair value of services received in return for share options granted is measured by reference to the fair value of the share

options granted. The inputs into the models for the various grants in the current and previous year were as follows:

2023

November

2022

November

2022

November

2022

November

2022

December

2022

December

2022

Scheme description

LTIP LTIP DBP DBP 3 Year

SRSOS

5 Year

SRSOS

Grant date 11-Nov-22 28-Nov-22 28-Nov-22 28-Nov-22 07-Dec-22 07-Dec-22

Risk free interest rate 0.0% 0.0% 0.0% 0.0% 3.3% 3.2%

Exercise price – – – – 1,550.0p 1,550.0p

Share price at date of grant 2,093.0p 1,996.0p 1,996.0p 1,996.0p 1,940.0p 1,940.0p

Expected dividend yield 0.0% 5.0% 5.0% 5.0% 5.0% 5.0%

Expected life 3 years 3 years 3 years 4 years

3 years

2 months

5 years

2 months

Vesting date 11-Nov-25 28-Nov-25 28-Nov-25 28-Nov-26 01-Feb-26 01-Feb-28

Expected volatility 40% 40% 40% 40% 40% 35%

Fair value of option 1,560.6p 1,412.6p 1,508.0p 1,432.0p 574.0p 537.0p

2022

October

2021

November

2021

November

2021

November

2021

December

2021

December

2021

Scheme description

LTIP LTIP DBP 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

Risk free interest rate 0.0% 0.0% 0.0% 0.0% 0.5% 0.6%

Exercise price – – – – 2,535.0p 2,535.0p

Share price at date of grant 3,319.0p 3,220.0p 3,220.0p 3,220.0p 3,130.0p 3,130.0p

Expected dividend yield 0.0% 5.0% 5.0% 5.0% 5.0% 5.0%

Expected life 3 years 3 years 3 years 4 years

3 years

2 months

5 years

2 months

Vesting date 26-Oct-24 11-Nov-24 11-Nov-24 11-Nov-25 01-Feb-25 01-Feb-27

Expected volatility 35% 35% 35% 35% 35% 30%

Fair value of option 2,124.3p 1,867.0p 2,474.0p 2,350.0p 734.0p 638.0p

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 £4.5 million (2022 – £3.1 million) in relation to equity-settled share-based payment transactions.

Notes to the Financial Statements continued

Accounts

194 Bellway p.l.c. Annual Report and Accounts 2023

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.

Group

SRT and associated review

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 SRT. 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.

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 pages 126 to 138.

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:

2023

£m

2022

£m

Invoiced to joint arrangements in respect of accounting, management fees, interest on loans,

land purchases and infrastructure works 22.4 31.6

Amounts owed to joint arrangements in respect of land purchases and management fees at the

year end (4.3) (4.5)

Amounts owed by joint arrangements in respect of accounting, management fees, interest,

land purchases and infrastructure works 45.4 27.0

Company

During the year the Company entered into the following related party transactions with its subsidiaries and joint arrangements:

2023

£m

2022

£m

Amounts received in the year from subsidiaries for share options exercised by subsidiary company

employees, dividends received and finance income 171.2 162.1

Amounts paid in the year by subsidiaries on behalf of the Company in respect of dividends, finance

expenses and share purchases, and receivable from subsidiaries on disposal of investments (237.7) (164.7)

Amounts owed by subsidiaries in respect of dividends and shares issued net of amounts paid on

behalf of the Company 443.2 509.7

Investments in subsidiaries and joint ventures 48.0 43.5

195Bellway p.l.c. Annual Report and Accounts 2023

Accounts

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 2023. 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

Woolsington One Limited

Rosconn Strategic Land 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, year end of 29 June)

^^ c

Langley Sustainable Urban Extension Limited (33% owned, year end of 30 April)

^^ e

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

MI New Home Insurance PCC Limited

Artex Insurance (Guernsey) PCC Limited

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

e Registered address is One Eleven, Edmund Street, Birmingham, B3 2HJ

Notes to the Financial Statements continued

Accounts

196 Bellway p.l.c. Annual Report and Accounts 2023

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 2023.

Control is exercised by the Group’s power to appoint directors and the Group’s voting rights in these companies. All the resident

management companies listed below are limited by guarantee, unless otherwise indicated, without share capital and are

incorporated in the UK.

The capital, reserves and profit or loss for the year have not been stated for the resident management companies listed below

as the beneficial interest in any assets or liabilities of these companies is held by the residents. The Group does not have

exposure, or rights to variable returns from these companies and therefore they are not included in the consolidated financial

statements. They are temporary members of the Group and will be handed over to residents in due course.

Company Name Registered Office

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

Abingworth Meadows Management Company Limited Suite No. 1 Stubbings House, Henley Road, Maidenhead, Berkshire, England, SL6 6QL

Admiral Park (Tongham) Management Company Limited 1st Floor Regent House, 1–3 Queensway, Redhill, England, RH1 1QT

Alkerden Heights (Parcel 5a) Management Company Limited C/O Trinity Estates Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire,

United Kingdom, HP2 7DN

Amen Corner (Binfield) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, SP2 7QY

Area F1 (Kings Hill) Management Company Limited Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, United Kingdom, 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, England, 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, United Kingdom, HP2 7DN

Astley Management Company Limited Bellway Homes Limited (West Midlands) 1 Centurion Court, Centurion Way, Wilnecote,

Tamworth, Staffordshire, United Kingdom, B77 5PN

Avondale (Cressing) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Azalea (Medstead) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Badbury Reach Management Company Limited Trinity, Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

Barley Fields (Tamworth) Management Company Limited 11 Little Park Farm Road, Fareham, Hampshire, United Kingdom, PO15 5SN

Bartley Square Management Company Limited PO Box 4385, 12471695 – Companies House Default Address, Cardiff, CF14 8LH

Barleycorn Way Residents Management Company Limited C/O Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Barleywoods Residential Management Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way,

Borehamwood, United Kingdom, WD6 1JH

Barton Manor (Barton) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH

Barton Meadows Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER

Barton Quarter (Horwich) Residents Management Company Limited C/O Rmg House, Essex Road, Hoddesdon, United Kingdom, EN11 0DR

Bassingbourne Fields Management Company Limited C/O Michael Laurie Magar Ltd, Elstree Way, Borehamwood, England, WD6 1JH

Baswich Grange Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY

Beckton Parkside Management Company Limited C/O Pinnacle Housing Ltd As Agent For Beckton Parkside Management Company

Limited, 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL

Bellway at Rosewood Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY

Bellway Whitehouse Farm Management Company Limited Marlborough House, 298 Regents Park Road, London, United Kingdom, N3 2UU

Belmont Park (Maidenhead) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Bentall Place (Heybridge) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Berwick Green Bristol Managemet Company Limited

1st Floor 2540 The Quadrant, Aztec West, Almondsbury, Bristol, United Kingdom, BS32 4AQ

Bicknor Wood Ltd C/O Djc Secretarial And Maintenance Limited Woodland Place, Hurricane Way,

Wickford, Essex, England, SS11 8YB

Blenheim Green Management Company Limited C/O Trustmgt Ltd Unit 7, Portal Business Park, Eaton Lane, Tarporley, Cheshire,

United Kingdom, CW6 9DL

Bluebell Walk (Harrietsham) Management Company Ltd C/O Gateway Property Management Limited Gateway House, 10 Coopers Way,

Southend-On-Sea, Essex, United Kingdom, SS2 5TE

Bluebells (Witham) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Bluecoats Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,

SY1 3BF

Bluenote Apartments Management Company Limited 395 Centennial Park, Centennial Avenue, Elstree, Borehamwood, England, WD6 3TJ

Boorley Gardens Residents Management Company Limited 2 Centro Place, Pride Park, Derby, Derbyshire, United Kingdom, DE24 8RF*

Bourne View (Ipswich) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Bower Place Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU

Bowood View (Melksham) Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN

197Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Company Name Registered Office

Brambleside Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Brampton Gate Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU

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

Brook View (Wixams) Residents Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Brookvale Management Company Limited Trinity Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

Buckland Rise (Peters Village) Management Company Ltd Woodland Place, Hurricane Way, Wickford, United Kingdom, SS11 8YB

Buckthorn Grange Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

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, 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 Remus Management Limited Fisherton House, 84 Fisherton Street, Salisbury,

United Kingdom, SP2 7QY

Cecilly Mills Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Chailey Gardens Management Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Chalfont Drive Residents Management Company Limited 406a Birmingham Road, Sutton Coldfield, England, B72 1YJ

Chamberlains Bridge Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Charters Hill Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Cherry Orchard (Bevere) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Chestnut Vale Residents Management Company Limited C/O Crabtree Pm Limited Head Office, Marlborough House, 298 Regents Park Road,

London, United Kingdom, N3 2UU

Clarence Gate Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle–upon Tyne, NE3 2ER

Clifford Gardens (Skipton) Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom, SY1 3BF

Coed Derw Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Cooper Square (Maidenhead) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Copperfields Resident Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY

Copperhouse Green Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Copthorne Keep Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Corallian Heights Management Company Limited Bellway House Embankment Way, Castleman Business Centre, Ringwood, Hampshire,

United Kingdom, BH24 1EU

Cornelia Gardens Management Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Cornfield’s Residents Management Company Limited Romulus Court Meridian East, Meridian Business Park, Leicester, Leicestershire,

United Kingdom, LE19 1YG

Cortlands Management Company Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way,

Borehamwood, United Kingdom, WD6 1JH

Cotton Woods (Preston) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL

Crossways Quarter Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

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, West Midlands, B3 2HJ

Cuttle Brook Management Company Ltd One Eleven, Edmund Street, Birmingham, B3 2HJ

Dacres Wood Court Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United

Kingdom, SS11 8YB

Dalesway (Harrogate) Management Company Limited RMG House, Essex Road, Hoddesdon, Hertfordshire, United Kingdom, EN11 0DR

De Havilland Place (Kings Hill) Management Company Limited C/O 30 Tower View, Kings Hill, West Malling, Kent, United Kingdom, ME19 4UY

Devonshire Place (Grays) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

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, 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, England, SP2 7QY

East Middle Callerton Residents Management Company Limited Kingston Property Services Limited Cheviot House, Beaminster Way East, Newcastle

Upon Tyne, United Kingdom, NE3 2ER

Notes to the Financial Statements continued

27. Resident management companies continued

Accounts

198 Bellway p.l.c. Annual Report and Accounts 2023

Company Name Registered Office

Eastbrook Village East Phase 1 (Site H) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, United Kingdom, WC1V 6PL

Eastbrook Village East Phase 2 (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, Essex,

United Kingdom, SS11 8YB

Ebbsfleet Cross (Phase 2) Management Company Limited Woodland Place Wickford Business Park Hurricane Way, Wickford, Essex, United

Kingdom SS11 8YB

Ebbsfleet Cross Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Elder brook Residents Management Company Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way, Borehamwood,

Hertfordshire, United Kingdom, WD6 1JH

Elements Residents Management Company Limited One Eleven, Edmund Street, Birmingham, West Midlands, B3 2HJ

Essendene Residential Management Company Limited Cheviot House, Beaminster Way East, Newcastle upon Tyne, United Kingdom, NE3 2ER

Eve Meadows (Haughley) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Fairfields (Calcot) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Farriers Court Residents Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Fellows Gardens Management Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Fielders Crescent Management Company Limited C/O Pinnacle Housing Ltd As Agent For Fielders Crescent Management Company

Limited, 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, United Kingdom, WC1V 6PL

Fielders Quarter Phase 4 (209B) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, United Kingdom, WC1V 6PL

Fielders Quarter Phase 5 (208A) Management Company Limited 8th Floor Holborn Tower, 137–144 High Holborn, London, United Kingdom, WC1V 6PL

Forest Chase Management Company Ltd Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Forest Oak Management Company Limited Faulkner & Company 1a, George Street, Hinckley, Leicestershire, England, LE10 0AL

Four Oaks (Oxted) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

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

Foxmill Gardens (Willand) Management Company Limited C/O Principle Estate Management, 137 Newhall Street, Birmingham, United Kingdom, B3 1SF

Frobisher Court (Finningley) Management Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom, SY1 3BF

Furlong Park Residents Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,

SY1 3BF

Fusion (Harlow) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Gloster Chase Management Company Limited C/O 30 Tower View, Kings Hill, West Malling, Kent, United Kingdom, ME19 4UY

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, United Kingdom, 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

Halewood Oaks Resident Management Company Limited C/O Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Hall Road (Rochford) Management Company Limited C/O Pod Group Services 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, HP2 7DN

Hampden Gardens (Thame) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, 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

Harbour Village (Ebbsfleet) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, England, SS11 8YB

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, United Kingdom, HP2 7DN

Hartshorne Residents Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Hartside View (Hartlepool) Residents Management Company Limited 2 Centro Place, Pride Park, Derby, Derbyshire, DE24 8RF*

Harvard Place (Earls Colne) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Harvino Residents Management Company Limited Trustmgt (Rfs) Limited 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom,

CW6 9DL

Hatfield Grove (Hatfield Peveral) Management Company Limited C/O Pod Group Services Limited First Floor, Unit 1, Elstree Gate, Elstree Way,

Borehamwood, Hertfordshire, United Kingdom, WD6 1JD

Hathaway Gardens Management Limited Alexander Faulkner Partnership Limited, 11 Little Park Farm Road, Fareham, England,

PO15 5SN

27. Resident management companies continued

199Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Company Name Registered Office

Hathaway Gardens Ph2 Residents Management Company Limited 100 Avebury Boulevard, Milton Keynes, United Kingdom, MK9 1FH

Hawthorne Rise Management Company Limited Trinity, Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

Hazel Fold Residents Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY

Hazelrigg Residents Management Company Limited 2 Centro Place, Pride Park, Derby, Derbyshire, DE24 8RF*

Heatherley Wood Residents Management Company Limited Rmg House, Essex Road, Hoddesdon, England, EN11 0DR

Heathlands Rmc Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Helios Park Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Helliers Lane (Cheddar) Management Company Limited 1st Floor 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom, BS32 4AQ

Hellingly (Hailsham) Management Company Ltd C/O Djc Secretarial And Maintenance 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, United Kingdom, HP2 7DN

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, United Kingdom, HP2 7DN

Holmwood Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Hugglescote Grange Management Company Limited Bellway Homes Limited (East Midlands) Romulus Court, Meridian East, Leicester,

United Kingdom, LE19 1YG

Huntercombe Walk (Taplow) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY

Ikon (Croydon) Management Company Limited Aquarium, Suite 7b Mayor Cuttle & Co., 101 Lower Anchor Street, Chelmsford, England,

CM2 0AU

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, United Kingdom, SS2 5TE

Indigo Park (Chichester) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Ivy Hill Residential Management Company Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way,

Borehamwood, United Kingdom, WD6 1JH

Jameson Manor Residents Management Company Limited Kingston Property Services Limited Cheviot House, Beaminster Way East, Newcastle

upon Tyne, United Kingdom, NE3 2ER

Jellicoe Gardens (Moreton) Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, England, CW6 9DL

Jubilee Green Management Company Limited Bellway Homes Limited (South Midlands) Oak House, Eastwood Business Village, Harry

Weston Road, Binley, Coventry, United Kingdom, CV3 2UB

Jubilee Park Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, UK, SY1 3BF

Keephatch Chase Management Limited Pacific House, Imperial Way, Reading, Berkshire, United Kingdom, RG2 0TD

Keephatch Gardens (Wokingham) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

Kingfisher Green (Rainham) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex,

United Kingdom, SS11 8YB

Kingsland Gate Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Kingsreach (Slough) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, SP2 7QY

Kingswood (High Wycombe) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, 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

2nd Floor 2540 The Quadrant, Aztec West, Almondsbury, Bristol, United Kingdom,

BS32 4AQ

Lakeside Park Management Company Limited 137 Newhall Street, Birmingham, England, B3 1SF

Langford Park Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Latitude Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Latitude Residents No 3 Limited New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, United Kingdom,

SO53 3LG

Legacy Wharf (Phase 2) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

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

Linkside (Burton) Management Company Limited Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, England, CM20 2BN

Linmere Gateway Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Linmere Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

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, SP2 7QY

27. Resident management companies continued

Notes to the Financial Statements continued

Accounts

200 Bellway p.l.c. Annual Report and Accounts 2023

Company Name Registered Office

Little Meadows (Cranleigh) Management Company Limited C/O A W Associates Regus, Building 2, Guildford Business Park Road, Guildford, Surrey,

GU2 8XG

Littlebrook (Cutbush Lane) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Lockharts Rmc Limited 7 Astra Centre, Edinburgh Way, Harlow, Essex, England, CM20 2BN

Lockwood Place (Bramford) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Long Acre (Shinfield) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Long Lane (Beverley) Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom,

SY1 3BF

Longfield Place (Sherfield) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Longholme Park Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, England, SY1 3BF

Longwood Copse Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Lucas Green Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Lydiate Gate Residents Management Company Limited C/O Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Lysander Fields Management Company Limited C/O Djc Property Management Woodland Place, Wickford Business Park, Hurricane

Way, Wickford, United Kingdom, SS11 8YB

Maes 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 11 Little Park Farm Road, Fareham, England, PO15 5SN

Malvern Chase (Tewkesbury) Management Company Limited Bellway Homes 2540 The Quadrant, Aztec West, Bristol, BS32 4AQ

Maple Creek Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Marconi (Chelmsford) Management Company Limited C/O Pinnacle Housing Ltd As Agent For Marconi (Chelmsford) Management Company

Limited, 8th Floor Holborn Tower, 137–144 High Holborn, London, England, WC1V 6PL

Marlborough Road Wroughton (Swindon) Management

Company Limited

1st Floor 2540 The Quadrant, Aztec West, Almondsbury, Bristol, United Kingdom,

BS32 4AQ

Maybrey Works Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Mead Fields (Phase 2) Weston Parklands Management Company Limited 1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, England, BS32 4AQ

Mead Fields Phase 2 (Leasehold Apartments) Management

Company Limited

1st Floor 2540 The Quadrant, Aztec West, Almondsbury, Bristol, United Kingdom,

BS32 4AQ

Meadow Rise (Heighington) Management Company Limited Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER

Meadow View (Romsey) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, 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 C/O Trust Green Management Company 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, HP2 7DN

Millstone Park Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom, CW6 9DL

Millworks, K Langley Management Company Limited 395 Centennial Park, Centennial Avenue, Elstree, Borehamwood, England, WD6 3TJ

Montague Green (Rowland’s Castle) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Mousley Park Hilton Management Company Limited One Eleven, Edmund Street, Birmingham, United Kingdom, 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, England, EN11 0DR

New Cardington Hangars Block Residents Management

Company Limited

C/O Crabtree Pm Limited Head Office, Marlborough House, 298 Regents Park Road,

London, United Kingdom, N3 2UU

New Cardington Hangars Estate Residents Management

Company Limited

C/O Crabtree Pm Limited Head Office, Marlborough House, 298 Regents Park Road,

London, United Kingdom, N3 2UU

New Gimsons Place (Witham) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Nightingale Rise (Hoo) Management Company Limited Woodland Place, Hurricane Way, Wickford, Essex, England, SS11 8YB

Northdene Residents Management Company Limited Unit 7 Portal Business Park Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Novello Management Company Limited C/O Pod Group Services 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, United Kingdom,

HP2 7DN

Oakfields Park (Halstead) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

Oakley Park (Edenbridge) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, England, SS11 8YB

Old Forest Road (Winnersh) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Old School Gardens Residents Management Company Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER

Oxenden Park (Thornden Wood) Management Company Limited Unit 7, Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Oxlease Residents Limited New Kings Court Tollgate, Chandler’s Ford, Eastleigh, Hampshire, England, SO53 3LG

27. Resident management companies continued

201Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Notes to the Financial Statements continued

Company Name Registered Office

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

Parsonage Place (Otham) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, Essex, United

Kingdom, SS11 8YB

Parsons Croft Management Company Limited Unit 7 Portal Business Park, Tarporley, United Kingdom, 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, United Kingdom,

NG1 6HH

Phase 1A Parc Mawr (Penllergaer) Management Company Limited Building 1 Eastern Business Park, St Mellons, Cardiff, United Kingdom, CF3 5EA

Phoenix Park (Thame) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Pinchbeck Fields Management Company Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way,

Borehamwood, United Kingdom, 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 Second Floor, Premier House, Elstree Way, Borehamwood, Hertfordshire, United

Kingdom, WD6 1JH

Pipits Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Pirton Fields (Churchdown) Management Company Limited Unit 7 Eaton Lane, Tarporley, England, CW6 9DL

Platts Meadow (Winsford) Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom, CW6 9DL

Plummers Meadow (Halewood) Residents Management Company

Limited

Unit 7 Portal Business Park, Tarporley, England, CW6 9DL

Poppy Field Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom, SY1 3BF

Poppy Fields (Cholsey) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Poppy View (Saffron Walden) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Porters Grove (St. Leonards) Management Company Limited C/O 30 Tower View, Kings Hill, West Malling, Kent, United Kingdom, ME19 4UY

Portland Gardens (Wouldham) Management Company Ltd Gateway House, 10 Coopers Way, Southend On Sea, Essex, United Kingdom, SS2 5TE

Priory Grange (Hatfield Peverel) Management Company Limited C/O Pod Group Services Limited First Floor, Unit 1, Elstree Gate, Elstree Way,

Borehamwood, Hertfordshire, United Kingdom, WD6 1JD

Qe2 (Welwyn Garden City) Management Company Limited Aquarium, Suite 7b Mayor Cuttle & Co., 101 Lower Anchor Street, Chelmsford, England,

CM2 0AU

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, Almondsbury, Bristol, England, 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

Redlands Grove Management Limited 13a, Building Two, Canonbury Yard, 190 New North Road, London, England, N1 7BJ

Reflections Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Renaissance (Reading) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, England, SP2 7QY

Renovo (West Thurrock) Management Company Limited 8 Hemmells, C/O Accordant Estates Company Ltd., Hemmells, Basildon, England, SS15 6ED

Ridleys Orchard (Whitton) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Riverbrook Place (Crawley) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Rolleston Manor Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Roman Fields (Corbridge) Management Company Limited 2 Centro Place, Pride Park, Derby, Derbyshire, United Kingdom, DE24 8RF

Roman Gate (Melton Mowbray) Management Company Limited 80 Mount Street, Nottingham, Nottinghamshire, England, NG1 6HH

Roman Walk Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Rookerey Park Management Company Limited Remus Management 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, England, SP2 7QY

Rowley Fields Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, England, SY1 3BF

Royal Bowland Park Residents Management Company Limited C/O Rmg House, Essex Road, Hoddesdon, United Kingdom, EN11 0DR

Sandstone Brook Residents Management Company Limited One Eleven, Edmund Street, Birmingham, West Midlands, 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, England, SP2 7QY

Saxon Heath (Marham Park) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Scholars Place Management Company Limited Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, CM20 2BN

Seaford Grange (Newlands) Management Company Limited Woodland Place Wickford Business Park, Hurricane Way, Wickford, England, SS11 8YB

27. Resident management companies continued

Accounts

202 Bellway p.l.c. Annual Report and Accounts 2023

Company Name Registered Office

Sheasby Park Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

Silkmakers Court Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

Sixty Three Management Company Limited Gateway House, 10 Coopers Way, Southend-On-Sea, Essex, SS2 5TE

Sky Plaza (Farnborough) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, United Kingdom, SP2 7QY

Snelsmoor Village Management Company Limited Bellway Homes East Midlands 3 Romulus Court, Meridian Business Park, Braunstone

Town, Leicester, United Kingdom, LE19 1YG

Solomon’s Seal (Horsham) Management Company Limited 25 Carfax, Horsham, West Sussex, RH12 1EE

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 C/O 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 George’s Park (Phase 2) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

St George’s Walk Residential Management Company Limited North Point, Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, England,

SY1 3BF

St James Park (Parcels B and C) Management Company Limited Bellway House, Bury Street, Ruislip, Middlesex, United Kingdom, HA4 7SD

St John’s View (Menston) Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom, SY1 3BF

St Lythans Park (Culverhouse Cross) Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN

St Mary’s Hill (Blandford) Management Company Limited C/O Remus Management 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, England, NE3 2ER

****

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 Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

St. James Mews (Charfield) Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN

Staverton Lodge Residents Management Company Limited Bellway Homes South Midlands, Oak House, Binley Business Park, Harry Weston Road,

Binley, Coventry, Warwickshire, CV3 2U

Steeds Farm (Fern Hill Gardens) Management Co Limited Bellway Homes 2540 The Quadrant, Aztec West, Bristol, BS32 4AQ

Steeple Chase (Frisby) Management Company Limited 7 Astra Centre, Edinburgh Way, Harlow, Essex, England, CM20 2BN

Stilton Gate Management Company Limited Premiere House, Elstree Way, Borehamwood, England, WD6 1JH

Stonebridge View Residents Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, Shropshire, UK, SY1 3BF

Stoughton Park Management Company Limited One Eleven, Edmund Street, Birmingham, West Midlands, United Kingdom, B3 2HJ

Summerhill View Management Company Limited Unit 7 Portal Business Park Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL

Summers Bridge (SAB) Management Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, Cheshire, United Kingdom, CW6 9DL*

Summers Bridge Residents 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

Tattenhoe Park (Parcel 4) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, United Kingdom,

NG1 6HH

The Abbey Fields Grange Management Company Limited 80 Mount Street, Nottingham, Nottinghamshire, England, NG1 6HH

The Alders (Wolverhampton) Management Company Limited Cumberland Court, 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH

The Avenue (Medburn) Residents Management Company Limited Kingston Property Services 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 R M G House, Essex Road, Hoddesdon, England, EN11 0DR

The Bridles Residential Management Company Limited Bellway Homes 2540 The Quadrant, Aztec West, Bristol, BS32 4AQ

The Chase Residents Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom,

HP2 7DN

The Cherry Meadow & Hatton Court Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN

The Coppice Heights & Amber Rise Management Company Limited 80 Mount Street, Nottingham, Nottinghamshire, England, NG1 6HH

The Fairways (Basingstoke) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, 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, United Kingdom, HP2 7DN

The Furrows (Warboys) Residents Management Company Limited Marlborough House, 298 Regents Park Road, London, N3 2UU

The Gateford Quarter Management Company Limited 80 Mount Street, Nottingham, Nottinghamshire, England, NG1 6HH

The Grange (Fenham) Resident Management Company Limited

Cheviot House, Beaminster Way East, Newcastle, Tyne and Wear, United Kingdom,

NE3 2ER

The Haven (Emsworth) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

The Long Shoot Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN

The Mount Prestwich Residents Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, United Kingdom, SP2 7QY

27. Resident management companies continued

203Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Company Name Registered Office

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, England, HP2 7DN

The Pastures (Telford) Management Company Limited 80 Mount Street, Nottingham, Nottinghamshire, NG1 6HH

The Printworks (Reading) Residents Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

The Residence (Nine Elms) Management Company Limited C/O Pinnacle Housing Ltd As Agent For The Residence (Nine Elms) Management

Company Ltd, 8th Floor Holborn Tower, 137–144 High Holborn, London, England,

WC1V 6PL

The Residence (Phase 2) Management Park Company Limited C/O Pinnacle Housing Ltd As Agent For 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, United Kingdom,

HP2 7DN

The Rosehips (Lower Howsell Road) Residents Management

Company Limited

11 Queensway House Queensway, New Milton, Hampshire, England, BH25 5NR

The Spinney (Oteley Road) Management Company Limited Fisher House, 84 Fisherton Street, Salisbury, Wiltshire, England, SP2 7QY

The Vale (Bottesford) Management Company Limited One Eleven, Edmund Street, Birmingham, United Kingdom, B3 2HJ

The Vickers (Witchford) Residents Management Company Limited C/O Michael Laurie Magar Ltd, Elstree Way, Borehamwood, England, WD6 1JH

The Willows (Swallowfield) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

The Willows Residents Management Company Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way,

Borehamwood, United Kingdom, WD6 1JH

The Withers (Netherton Residents Management Company Limited Unit 7 Portal Business Park, Tarporley, England, CW6 9DL

The Woodlands (Adel) Management Company Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, UK, SY1 3BF

The Woodlands (Watnall) Management Company Limited Unit 7, Astra Centre, Edinburgh Way, Harlow, Essex, England, CM20 2BN

Thomas Road Management Company Limited C/O Pinnacle Housing Ltd As Agent For 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, United Kingdom,

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

Tylman Place (Faversham) Management Company Limited Woodland Place, Hurricane Way, Wickford, Essex, England, SS11 8YB

Vicarage Gardens (South Marston Swindon) Management

Company Limited

1st Floor 2540 The Quadrant Aztec West, Almondsbury, Bristol, England, BS32 4AQ

Victoria Gardens (Peters Village) Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Waltham Heights Resident’s Management Company Limited 100 Avebury Boulevard, Milton Keynes, United Kingdom, MK9 1FH

Walton Park Management Company Limited Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Waterhouse Mill Residents Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ

Waterside At Riverwell (Block E) Management Company Limited 395 Centennial Avenue, Elstree, Borehamwood, England, WD6 3TJ

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 C/O Unit 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom, CW6 9DL

Weavers Meadow (Trowbridge) Management Company Limited 1st Floor, 2540 The Quadrant Aztec West, Almondsbury, Bristol, United Kingdom, BS32 4AQ

Wellfield Rise Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle upon Tyne, NE3 2ER

Wellington Gardens (Aldershot) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Wellington Grange (Pocklington) Management Limited North Point Stafford Drive, Battlefield Enterprise Park, Shrewsbury, United Kingdom, SY1 3BF

West End Quarter (Folkestone) Management Company Limited C/O Gateway Property Management Limited Gateway House, 10 Coopers Way,

Southend-On-Sea, Essex, United Kingdom, SS2 5TE

Westbrook Moorings Management Company Limited 395 Centennial Park, Centennial Avenue, Elstree, Borehamwood, England, WD6 3TJ

Westland Place Management Company Limited C/O 30 Tower View, Kings Hill, West Malling, Kent, United Kingdom, ME19 4UY

Westminster Road Management Company Limited One Eleven, Edmund Street, Birmingham, B3 2HJ

Wharf Farm (Rugby) Residents Management Company Limited Unit 7 Portal Business Park, Eaton Lane, Tarporley, United Kingdom, CW6 9DL

Whitehill Gardens Residential Management Company Limited C/O Mlm Property Management 2nd Floor, Premiere House, Elstree Way,

Borehamwood, United Kingdom, WD6 1JH

Whitehouse Park Residents Management Company Limited C/O Trinity (Estates) Property Management Limited Vantage Point, 23 Mark Road,

Hemel Hempstead, United Kingdom, HP2 7DN

Wickfields (Longwick) Management Company Limited Aquarium, Suite 7b Mayor Cuttle & Co., 101 Lower Anchor Street, Chelmsford, England,

CM2 0AU

Wildflower Meadow Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, England, HP2 7DN

Willow Park (Halstead) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

Willow Rise Management Company Limited Bellway Homes Limited (East Midlands) Romulus Court, Meridian East, Leicester,

United Kingdom, LE19 1YG

Notes to the Financial Statements continued

27. Resident management companies continued

Accounts

204 Bellway p.l.c. Annual Report and Accounts 2023

Company Name Registered Office

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 Queensway House, 11 Queensway, New Milton, Hampshire, England, BH25 5NR

Woodgreen (Blyth) Residents Management Company Limited Cheviot House, Beaminster Way East, Newcastle upon Tyne, Tyne And Wear, England,

NE3 2ER

Wyvern Grange Management Company Limited 11 Little Park Farm Road, Fareham, England, PO15 5SN

Yellowfields Phase 3B Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, United Kingdom, HP2 7DN

Yew Tree Gardens (Cholsey) Management Company Limited Vantage Point, 23 Mark Road, Hemel Hempstead, Hertfordshire, United Kingdom, HP2 7DN

* Company is a 50/50 Joint venture

** Company limited by shares wholly owned by Bellway Homes Limited

*** 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 profit margin – This is operating profit before net legacy building safety expense and exceptional items

divided by total revenue. The Directors consider this to be an important indicator of the operating performance of the Group.

• Net underlying finance expense – This is the net finance expense before any directly attributable finance expense or

finance income relating to the net legacy building safety expense and exceptional items. The Directors consider this to be an

important measure when assessing whether the Group is using the most cost effective source of finance.

• 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 Company

or Trust which are treated as cancelled).

• 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.

• 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.

27. Resident management companies continued

205Bellway p.l.c. Annual Report and Accounts 2023

Accounts

28. Alternative performance measures continued

• Capital invested in land, net of land creditors, and work-in-progress – This is calculated as shown in the table below.

The Directors consider this as an indicator of the net investment by the Group in the period to achieve future growth.

Per balance sheet

2023

£m

2022

£m

Mvt

£m

2022

£m

2021

£m

Mvt

£m

Land 2,578.8 2,786.4 (207.6) 2,786.4 2,483.9 302.5

Work-in-progress 1,861.6 1,524.8 336.8 1,524.8 1,431.4 93.4

Increase in capital invested in land

and work-in-progress in the year

129.2

395.9

Land creditors (368.8) (393.4) 24.6 (393.4) (455.8) 62.4

Increase in capital invested in land,

net of land creditors, and work-in-

progress in the year 153.8 458.3

• 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.

2023

Capital

employed

£m

2023

Land

creditors

£m

2023

Capital

employed

including land

creditors

£m

2022

Capital

employed

£m

2022

Land

creditors

£m

2022

Capital

employed

including land

creditors

£m

Underlying operating profit 543.9 543.9 653.2 653.2

Capital employed/land creditors:

Opening 3,367.8 393.4 3,761.2 3,287.8 455.8 3,743.6

Half year 3,481.4 372.4 3,853.8 3,429.8 349.0 3,778.8

Closing 3,461.6 368.8 3,830.4 3,367.8 393.4 3,761.2

Average

3,436.9 378.2 3,815.1 3,361.8 399.4 3,761.2

Underlying return on capital employed 15.8% 14.3% 19.4% 17.4%

• 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.

2023

Capital

employed

£m

2023

Land

creditors

£m

2023

Capital

employed

including land

creditors

£m

2022

Capital

employed

£m

2022

Land

creditors

£m

2022

Capital

employed

including land

creditors

£m

Operating profit 505.3 505.3 309.0 309.0

Capital employed/land creditors:

Opening 3,367.8 393.4 3,761.2 3,287.8 455.8 3,743.6

Half year 3,481.4 372.4 3,853.8 3,429.8 349.0 3,778.8

Closing 3,461.6 368.8 3,830.4 3,367.8 393.4 3,761.2

Average

3,436.9 378.2 3,815.1 3,361.8 399.4 3,761.2

Return on capital employed 14.7% 13.2% 9.2% 8.2%

Notes to the Financial Statements continued

Accounts

206 Bellway p.l.c. Annual Report and Accounts 2023

28. Alternative performance measures continued

• 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.

2023

£m

2022

£m

Underlying profit for the year 402.2 518.5

Net assets:

Opening 3,367.8 3,287.8

Half year 3,481.4 3,429.8

Closing 3,461.6 3,367.8

Average 3,436.9 3,361.8

Underlying post tax return on equity 11.7% 15.4%

• 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.

2023

£m

2022

£m

Profit for the year 365.0 242.6

Net assets:

Opening 3,367.8 3,287.8

Half year 3,481.4 3,429.8

Closing 3,461.6 3,367.8

Average 3,436.9 3,361.8

Post tax return on equity 10.6% 7.2%

• Total growth in value per ordinary share – The Directors use this as a proxy for the increase in shareholder value since 31 July

2020. A period of 3 years is used to reflect medium-term growth.

Net asset value per ordinary share:

At 31 July 2023 2,871p

At 31 July 2020 2,427p

Net asset value growth per ordinary share 444p

Dividend paid per ordinary share:

Year ended 31 July 2023 140.0p

Year ended 31 July 2022 127.5p

Year ended 31 July 2021 85.0p

Cumulative dividends paid per ordinary share 352.5p

Total growth in value per ordinary share 796.5p

• Annualised accounting return in NAV and dividends paid since 31 July 2020 – 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 2020 (as detailed

above) divided by the net asset value per ordinary share at 31 July 2020. The Directors use this as a proxy for the increase in

shareholder value since 31 July 2020.

Net asset value growth per ordinary share 444p

Cumulative dividends paid per ordinary share 352.5p

Total growth in value per ordinary share 796.5p

Net asset value per ordinary share at 31 July 2020 2,427p

Total value per ordinary share 3,223.5p

Annualised accounting return =

3,223.5

2,427.0

^(1/3) –1

9.9%

207Bellway p.l.c. Annual Report and Accounts 2023

Accounts

28. Alternative performance measures continued

• 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 284.0p

Net legacy building safety expense per share 30.9p

Underlying capital growth in the period 314.9p

Net asset value at 31 July 2022 2,727p

Underlying capital growth

314.9p

2,727p

11.5%

• 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 2023 2,871p

At 31 July 2022 2,727p

Net asset value growth per ordinary share 144p

Dividend paid per ordinary share:

Year ended 31 July 2023 140.0p

Capital growth in the period 284.0p

• Net cash/(debt) – This is the cash and cash equivalents less bank debt and fixed rate sterling USPP notes. Net cash/(debt)

does 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 cash/(debt) 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.

2023

£m

2022

£m

Cash from operations 372.9 114.6

Add: increase in capital invested in land, net of land creditors, and work-in-progress

(as described above) 153.8 458.3

Cash generated from operations before investment in land, net of land creditors,

and work-in-progress 526.7 572.9

• Adjusted gearing – This is calculated as the total of net cash/(debt) 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.

• 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.

• 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.

Notes to the Financial Statements continued

Accounts

208 Bellway p.l.c. Annual Report and Accounts 2023

2019

£m

2020

£m

2021

£m

2022

£m

2023

£m

Income statement

Revenue 3,213.2 2,225.4 3,122.5 3,536.8 3,406.6

Operating profit 674.9 321.7

531.5

653.2

543.9

Net finance expenses (14.4) (13.4) (11.1) (12.1)

(9.9)

Share of results of joint ventures 2.1 1.0 10.4 9.3 (1.4)

Profit before taxation 662.6 309.3

530.8

650.4

532.6

Income tax expense (124.0) (57.6)

(98.1)

(131.9)

(130.4)

Profit for the year (all attributable to equity holders

ofthe parent) 538.6 251.7

432.7

518.5

402.2

Balance sheet

ASSETS

Non-current assets 83.2 99.3 102.1 71.6 79.4

Current assets 3,806.7 3,984.3 4,574.7 4,913.5 5,034.7

LIABILITIES

Non-current liabilities (99.4) (133.8) (316.9) (646.3) (647.0)

Current liabilities (869.3) (955.8) (1,072.1) (971.0) (1,005.5)

EQUITY

Total equity 2,921.2 2,994.0 3,287.8 3,367.8 3,461.6

Statistics

Number of homes sold 10,892 7,522 10,138 11,198 10,945

Average price of new homes £292.0k £293.1k £306.5k £314.4k £310.3k

Underlying gross margin

24.6% 19.0%

20.9%

22.3%

20.2%

Gross margin 24.6% 15.7% 19.2% 12.5% 19.0%

Underlying operating margin

21.0% 14.5%

17.0%

18.5%

16.0%

Operating margin 21.0% 11.2% 15.4% 8.7% 14.8%

Basic earnings per ordinary share 437.8p 156.6p 316.9p 196.9p 297.7p

Dividend per ordinary share 150.4p 50.0p 117.5p 140.0p 140.0p

Underlying return on capital employed

24.7% 10.8%

16.9%

19.4%

15.8%

Return on capital employed

24.7% 8.3% 15.2% 9.2% 14.7%

Gearing

– – – – –

Net asset value per ordinary share

2,372p 2,427p 2,664p 2,727p 2,871p

Land portfolio – plots with implementable DPP 26,421 28,289 30,933 32,344 32,229

Weighted average number of ordinary shares 123,012,723 123,205,211 123,306,035 123,227,544 122,593,350

Number of ordinary shares in issue at end of year 123,167,828 123,345,834 123,396,422 123,486,260 120,558,573

Notes:

2 APM.

3 Stated before net legacy building safety expense and exceptional item.

Five Year Record

209Bellway p.l.c. Annual Report and Accounts 2023

Accounts

Other

Information

Glossary 211

Advisors and Group General

Counsel and Company Secretary

213

Shareholder Analysis

and Financial Calendar

214

210 Bellway p.l.c. Annual Report and Accounts 2023

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.

Landbank

The landbank 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.

Land with DPP

Plots owned or unconditionally contracted by the Group where

there is an implementable detailed planning permission.

Legacy Building Safety Provision

Included within this provision, there are two components (i)

SRT and associated review, and (ii) Structural defects provision.

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.

Net Legacy Building Safety Expense

This contains the income statement movements in relation

to the legacy building safety provision and any associated

reimbursement assets.

New Homes Bonus (‘NHB’)

The NHB was introduced in 2011 by the coalition government

with the aim of encouraging local authorities in England

211Bellway p.l.c. Annual Report and Accounts 2023

Other Information

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.

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.

Self-Remediation Terms (‘SRT’)

Is a commitment to remediate buildings over 11 metres in

height with identified life critical fire safety issues, which were

constructed in England and Wales since 5 April 1992.

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.

SONIA

SONIA is the Sterling Overnight Index Average, and is an

important interest rate benchmark. It is calculated and

published by the Bank of England.

Strategic Plots

Longer-plots which are typically held option.

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

205 to 208.

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

212 Bellway p.l.c. Annual Report and Accounts 2023

Advisers and Group General Counsel and Company Secretary

Group General Counsel and Company Secretary

and Registered Office

Simon Scougall

Bellway p.l.c.

Woolsington House

Woolsington

Newcastle Upon Tyne

NE13 8BF

Registered number 1372603

Registrars, Transfer Office and

ShareholderQueries

Link Group

Central Square

29 Wellington Street

Leeds

LS1 4DL

E-mail: enquiries@linkgroup.co.uk

Tel +44 (0) 371 664 0300 Calls are charged at the standard

geographic rate and will vary by provider. Calls outside the United

Kingdom are charged at the applicable international rate. Lines are

open 9.00am – 5.30pm Monday to Friday excluding bank holidays

in England and Wales

Financial Adviser

Citigroup Global Markets Limited

Stockbrokers

Citigroup Global Markets Limited

Numis Securities Limited

Bankers

Barclays Bank PLC

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

213Bellway p.l.c. Annual Report and Accounts 2023

Other Information

Shareholder Analysis and Financial Calendar

Financial Calendar

Shareholders by size of holding at 31 July 2023 Holdings Shares

Number % Holding %

0 – 2,000 1,577 70 832,292 1

2,001 – 10,000 323 14 1,403,978 1

10,001 – 50,000 161 7 4,099,094 4

50,001 and over 210 9 114,223,209 94

Total 2,271 100 120,558,573 100

Shareholders by type at 31 July 2023 Holdings Shares

Number % Holding %

Private shareholders 1,567 69 2,473,486 2

Investment trusts 8 <1 620 <1

Deceased Accounts 24 1 20,653 <1

Nominee companies 580 26 102,083,551 85

Limited companies 36 1 128,543 <1

Bank and bank nominees 28 1 14,016,698 12

Other institutions 28 1 1,835,122 1

Total 2,271 100 120,558,753 100

Final 2022/23 dividend – ex-dividend date 30 November 2023

Final 2022/23 dividend – record date 01 December 2023

AGM 15 December 2023

DRIP election date for final 2022/23 dividend 15 December 2023

Final 2022/23 dividend – payment date 10 January 2024

Trading update 09 February 2024

Announcement of 2023/24 interim results 26 March 2024

Other Information

214 Bellway p.l.c. Annual Report and Accounts 2023

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Bellway p.l.c.

Woolsington House, Woolsington

Newcastle upon Tyne, NE13 8BF

Tel: (0191) 217 0717