Housebuilder Bellway (BWY) said it expected annual home completions to rise by a quarter amid pent-up demand but noted a slowing reservation rate in November. The mixed update saw its shares dip 2% to £27.06.

Housing completions for the full year to 31 July 2021 are forecast to increase by around 25% from the 7,522 seen in the previous financial year.

Bellway said it expected first-half home sales - for the six-month period ended 31 January 2021 - to be similar to the 5,321 homes sold in the same period last year.

The company added, however, that the reservation rate slowed during November to an average of 164 per week, compared with 233 per week seen in the period from 28 October 2019 to 24 November 2019, as a result of the reintroduction of more widespread lockdown measures.

For the 17 weeks from 1 August to 29 November, the forward order book rose 18.7% to £1.77 billion. The company’s balance sheet position is strong with net cash of £242.9 million. This gives it the capacity to invest in land at an opportune moment in the cycle when valuations are depressed.

And with a final dividend set to be paid in January (for the July 2020 financial year), management expressed its confidence in an ability to boost future dividends in line with earnings.

‘The robust forward sales position, together with the higher number of completions already achieved in the period and our focussed investment in work-in-progress, will result in volume output in the current financial year being weighted towards the first half trading period,’ the company said.

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Issue Date: 11 Dec 2020