A bullish trading update from housebuilder Bellway (BWY) appeared to have been largely priced in by the market as its shares remained unchanged at £34.81.

For the period from 1 February to 6 June 2021, reservations per week increased 51.3% to 239 from 158 last year.

Looking ahead, the company forecasts housing completions around 10,000 homes, up from 7,522 homes last year, but down from 10,892 homes in 2019.

The company also announced record investment in land, with 15,982 plots contracted since 1 August 2020 at ‘an attractive rate of return’, with this activity backed by a strong balance sheet.

The value of the forward order book rose by 20.5% to £1.89 billion from £1.57 billion in 2020, and was also up from £1.64 billion seen in 2019.

The average selling price was now expected to rise further, to in excess of £300,000, up from £293,054 in 2020 and £291,968 in 2019.

‘This has been supported by the extended stamp duty land tax holiday and more broadly, ongoing customer aspirations for more home-working space,’ the company said.

Noting the big land purchases Numis analyst Chris Millington commented: ‘In our view, this highlights that Bellway was one of the first housebuilders to return to the land market post the lockdown and also signals management’s intent to grow the business materially.

‘Bellway looks very well-placed for FY22, with an order book that stands up 20.5% year-on-year at £1.9 billion (and up 15% vs 2019) and a net cash position of £408 million (2019 net debt £261 million) – this is expected to reduce to c.£100 million by year end given heightened landbuying.’

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Issue Date: 15 Jun 2021