Another robust update from housebuilder Bellway (BWY) sees shares in the £2.2 billion cap adding 2.2% to £18.69 with strong forward sales growth of 24.5% bringing the total value of the order book to £975 million. There was also plenty of good news in the other headline data from the Newcastle-headquartered builder.
Further volume growth – particularly in the North of England – was evidenced by a 15.7% increase in the number of housing completions to 3,754 while operating margin is expected to approach 20% for the period ended 31 January 2015.
The group reported that the average selling price of homes sold has risen by 3% to around £219,000. This improvement, says Bellway, has been driven largely by the strong pricing environment and greater investment in primary locations over recent years.
However while the pricing environment remains favourable, Bellway notes that the rate of house price growth has moderated, particularly in and around London, resulting in only modest but sustainable pricing improvements on certain sites.
Going forward, the builder maintains that plans are well advanced to open a 16th division in the second half of the financial year and this, together with the strong order book and significant, disciplined investment in land should ensure that the group is well-placed to deliver further volume and profit growth in the current financial year.