7th Jun 2024 09:24
(Alliance News) - Bellway PLC on Friday said it was "encouraged" by the recent period of relative stability in trading, with the housebuilder now fully sold for the current financial year, and volume and margin guidance in line with previous forecasts.
In a trading update for the four months to June 2, the Newcastle Upon Tyne, England-based company reported stronger trading through the spring selling season, with improved reservation rates compared to the first half of the financial year.
Bellway said the private reservation rate per outlet per week of 0.62 increased by 6.9% compared to a year prior from 0.58.
The forward order book is at 5,346, down from 6,172 a year prior but up from 4,411 at the start of the financial year, Bellway added.
Bellway said it is on track to deliver around 7,500 homes this year, down from 10,945 the year prior, and continues to expect a reduction in the underlying operating margin of at least 600 basis points from 16% a year ago.
"The group is now fully sold for the current financial year and given our strong outlet opening programme and healthy forward order book, Bellway is well-positioned to return to growth in financial year 2025," the company stated.
Bellway noted good levels of building material and subcontractor availability across the group, with limited overall cost inflation on new tenders.
But it explained that "while underlying cost pressures are currently far less pronounced than the prior year, the higher levels of inflation experienced on costs incurred in earlier periods, and carried in our work-in-progress, will be realised through the income statement for legal completions in the months ahead."
Chief Executive Jason Honeyman said: "We reiterate our confidence that the group's robust balance sheet and operational strength, combined with the depth of our land bank, will enable Bellway to successfully capitalise on future growth opportunities."
Bellway said the next scheduled trading update, covering the financial year ending July, is on August 9.
Shares in Bellway rose 1.4% to 2,822.00 pence in London on Friday morning.
By Jeremy Cutler, Alliance News reporter
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