Bellway cheers housing market strength as revenues look set to jump
The housebuilder said customer appetite ‘remained strong’ despite the Bank of England’s November interest rate rise.
Housebuilder Bellway is lining up a double-digit rise in housing revenues thanks to higher selling prices and a robust demand for new homes.
The FTSE 250 firm expects half-year housing revenues to jump 14% to £1.3 billion, as customer appetite “remained strong” despite the Bank of England’s November interest rate rise to 0.5%.
Bellway said the number of housing completions lifted 6% to 4,741 for the six months ending in January, with the average selling price enjoying a near 8% climb to a record £276,000.
Executive chairman John Watson said: “Bellway is continuing to make a sizeable contribution to the supply of much-needed new homes and has delivered a further increase in both volume and average selling price in the six-month trading period.
“Significant investment in land, together with ongoing plans to expand the divisional structure, should lead to a further increase in output and hence result in additional value creation for our shareholders.”
The firm’s forward order book surged 16% to £1.3 billion – or 4,629 homes – as its weekly reservation rate lifted 7% over the period.
It also made “significant investment” in land, snapping up 6,736 plots in line with its “continued growth ambitions”.
The group expects the average selling price to notch up to £280,000 by the end of the financial year.
Mr Watson added: “Whilst growth this financial year will in part be determined by the outcome of the spring selling season, given the strength of the forward order book, the board expects that the group will be able to replicate the rate of volume growth achieved in the first half and, in doing so, complete the sale of around an additional 600 homes for the year ending 31 July 2018.”
Shares were up just shy of 1% shortly after the London Stock Exchange opened for trading.