8th Feb 2022 10:25
(Alliance News) - Bellway PLC on Tuesday said it expects interim revenue to grow due to high customer demand and strong customer confidence and volume output.
The residential property developer and housebuilder said it delivered a "good" trading performance in the six months to January 31.
Housing revenue for the half-year period is expected to grow by 4.1% to GBP1.78 billion from GBP1.71 billion the year before.
The Newcastle Upon Tyne-based company said the number of completions increased marginally to 5,694 from 5,656 a year before. This represents a new record for the company and Bellway attributed this to pent-up demand and elevated construction progress.
The company said its current order book is "substantial" compromising 6,628 homes, up 13% from 5,889 homes a year before. This represents a value increase of 19% to GBP1.94 billion from GBP1.63 billion.
Bellway's average selling price also grew, rising 2.8% to GBP311,800 from GBP303,206 a year ago. The firm explained that a greater proportion of private completions and positive pricing momentum contributed to the rise.
The average selling price for the full year is expected to rise above previous expectations to over GBP300,000.
Altogether, Bellway put this strong performance down to high customer demand and strong customer confidence and good volume output due to its record completion rate.
Its overall reservation rate increased 5.8% to 202 per week from 191 in the comparable period a year before.
Private reservations were up by 3.8% to 162 per week from 156.
The firm said its balance sheet remains "strong" despite a 43% fall to net cash of GBP196 million from GBP346.4 million.
Nonetheless, Bellway stated that this balance sheet still "provides significant financial resilience and capacity to invest for further growth."
The housebuilder expects its underlying operating margin for the full year to be above 18%, due to "strong commercial disciplines," together with some inflationary pricing benefit.
It remains on track to increase output by around 10% this year.
It expects to grow further in financial 2023 to around 12,200 homes.
"Bellway has delivered a strong first-half performance, achieving record volume output and housing revenue, notwithstanding the wider economic challenges presented by labour, material and fuel shortages and Covid-19 related absenteeism," Chief Executive Jason Honeyman said.
"Going forward, Bellway is on track to deliver its target volume growth of around 10% this financial year and further growth to around 12,200 homes in financial year 2023. Thereafter, our strong balance sheet and capacity to invest positions the Group well to continue its long-term and disciplined growth strategy."
Bellway shares were trading 2.6% higher in London on Tuesday morning at 2,913.00 pence each.
By Abby Amoakuh; [email protected]
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