- Double-digit increase in volumes
- Prices also higher than last year
- Firm ‘well positioned for growth’
For the second time this year, Bellway (BWY) has ridden to the rescue to alleviate some of the gloomy sentiment around the housebuilding sector with positive news on sales and reservations.
The shares, which were trading just shy of £30 in July but have been languishing below the £25 mark more recently, added 60p or 2.5% to £24.99 in early trading.
SOLID FOUNDATIONS
Having delivered an upbeat report on 10 June, Bellway once again injected some sunshine into proceedings with its full-year trading update.
Housing completions for the 12 months to the end of July increased by 14.3% to 8,749 units, at an overall average selling price of around £316,000, £8,000 more than the previous year, with both figures topping the firm’s previous guidance.
Therefore, housing revenue increased by 17% to over £2.76 billion and the underlying operating margin is expected to be around 11% against 10% a year ago.
The private reservation rate, a measure closely watched by investors and analysts as a sign of future sales, was nearly 12% higher than the previous year at 0.57 units per sales outlet per week, including bulk sales, while excluding bulk sales the rate increased by 6% to 0.52 units per outlet per week.
That took the forward order book at the end of July to 5,307 homes against 5,144 a year ago with a value of £1.52 billion against £1.41 billion.
Encouragingly for margins, the firm also said build-cost inflation was in the low single digits throughout the year and there were good levels of building materials and subcontractor availability across the group.
‘Bellway has delivered a solid performance despite ongoing headwinds for our industry,’ said chief executive Jason Honeyman.
‘There was good growth in volume output and an improvement in underlying margin which are set to drive a strong increase in profits for FY25. We have entered the new financial year with a healthy forward order book and outlet opening programme and, if market conditions remain stable, we are well-positioned to deliver further growth in FY26.’
