10th Feb 2015 10:32
LONDON (Alliance News) - Housebuilder Bellway PLC on Tuesday reported a rise in sales in the first half and a strong rise in off-plan sales, adding it is confident on its outlook for the full year.
The FTSE 250-listed company said its housing completions in the first half of its financial year to the end of January rose to 3,754 from 3,245 in the comparable period a year earlier. Its average selling price in the period was up around 3% to GBP219,000 from GBP212,071 last year, with the average selling price of private homes up by around 7% to GBP240,000.
Its forward order book, or off-plan sales, rose to GBP975 million at the end of January, up 25% on the GBP783 million reported at the same time in 2014. Bellway expects its operating margin for the first half to be around 20%, a significant improvement on the 15.6% reported for the first half of the year before, with housing revenue rising by 19% in the half to GBP820 million from GBP688.2 million.
The group said that though the pricing environment is still strong, there has been a moderation of price growth, particularly in and around London, meaning only modest improvements in prices were seen at certain sites.
Bellway said market conditions remain favourable at present, with continued demand for new homes across the UK. It said it has taken an average of 139 reservations per week in the first half, slightly higher than the 137 a year earlier, though it said the rate of private reservations has slowed year-on-year owing to the extraordinary boost provided by the UK government's Help to Buy scheme to the comparative period.
The group performed well in the north of England, with sales rising 24% to 1,822 homes against 1,474 a year earlier across its seven northern divisions. The group said the results for the north were boosted by significant land investment, which pushed up its sales in Scotland and the North East.
Bellway's southern England divisions also performed well, with sales rising 9.1% to 1,932 homes against 1,771 last year, with demand in London remaining strong.
The company spent GBP355 million on land and land creditors in the half, up from GBP240 million the year before. It expects its recent acquisitions in Basingstoke, Guisborough and West Malling to be released for sale in the next twelve months. The group also plans to open a 16th operating division in the current financial year to the end of July.
"The group's strategy of delivering volume growth, with a strong focus on return on capital employed has resulted in a further significant rise in profitability. With advanced plans to open a sixteenth division in the second half of the financial year, Bellway is well positioned to deliver further earnings growth," said Ted Ayres, Chief Executive of Bellway.
Bellway shares were up 2.1% to 1,868.00 pence on Tuesday morning, one of the best performers in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance
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