Record completions for Bellway

A record first half volume output has been achieved by Bellway for the six months ending January 31 2020 with the completion of 5,321 new homes (2019 – 5,007), a rise of 6.3%.

Private homes have been in strong demand, with an 11% rise in the private reservation rate to 151 per week (2019 – 136) and a 6% increase in the overall reservation rate to 194 per week (2019 – 183). The firm reports a “robust” forward sales position, with an order book comprising 4,598 homes (2019 – 4,587 homes) and a value of £1,163.1 million (2019 – £1,171.3 million).

Housing revenue saw a rise by almost 4% to around £1,525 million (2019 – £1,471.2 million), mainly driven by the growth in housing completions.  This was partially offset by a moderation in the average selling price, which decreased by 2.5% to around £286,500 (2019 – £293,832), reflecting mix changes in accordance with previous guidance. The firm saw a 4.6% increase in the average number of active outlets to 274 (2019 – 262).

Profit before tax for the full year is expected to be in line with market estimates (IRO £622 million).

Bellway chairman Paul Hampden Smith said:

“Bellway continues to increase the supply of affordably priced, good value new homes, following another successful trading period in which it has achieved further volume growth.  Constructing quality homes and maintaining high standards of customer service remain a priority for the group.  I am therefore delighted that Bellway continues to maintain its five star home builder rating.  Looking forward, a robust balance sheet, operational capacity for expansion and a strong order book should ensure that the group is well placed to deliver additional, long term volume growth, thereby continuing our disciplined growth strategy.”

Bellway said that despite the political uncertainty in the latter half of 2019, customer interest remained resilient throughout the trading period.  This interest has increased since the start of the calendar year, with renewed consumer optimism benefitting the housing market.

Bellway reports that it has now almost fully traded out of its flagship development, The Residence, at Nine Elms in Battersea, completing the sale of 20 apartments in the period (2019 – 125), at an average selling price of around £761,300 (2019 – £828,528).  The overall average selling price in the period, excluding completions from Nine Elms, was around £284,700 (2019 – £280,142), a rise of 1.6%.

For the full year, Bellway still expects the average selling price to be in excess of £285,000 (July 31 2019 – £291,968), in line with previous guidance.

Looking ahead, Bellway says there remains some cost pressure affecting the wider industry but trading conditions are encouraging and early indications suggest that there will be a return of the usual, traditionally strong spring selling season.  “This, together with the sizeable forward sales position, should facilitate further, yet more moderate volume growth for the full financial year.”