8th Aug 2014 06:48
LONDON (Alliance News) - House builder Bellway PLC Friday said it's continuing to complete and sell more houses at higher average prices and its forward order book is also up, as the strong recovery in the UK housing market continues.
In a trading update, the company said housing completions rose to 6,851 in the year to end-July, from 5,652 the previous year, and average selling prices were up to GBP213,000, from GBP193,025. Its forward order book is up to GBP924.3 million, from GBP679.5 million at the end of fiscal 2013, which the company said is a record. That represents 4,363 plots, up from 3,525.
The UK's housebuilders suffered in the financial crisis and ensuing economic downturn, with house building almost coming to a complete standstill. However, the recovery in the UK housing market, particularly over the last 18 months, has been rapid and strong, and all the UK's listed housebuilders have been reporting surging sales and profits.
Bellway said it had spent about GBP460 million in securing land in its last financial year, up from GBP300 million in fiscal 2013. It also said it has significant capacity for further investment, as it swung to a net cash position of GBP5 million, compared with the GBP5.8 million of net bank debt it had at the end of fiscal 2013.
"The group has reacted positively to the continued strength of the UK housing market, significantly increasing output to satisfy customer demand. The favourable trading environment, together with the group's national presence and strong balance sheet, ensures that Bellway is well positioned to continue its growth strategy and this, together with a strong focus on return on capital employed, should lead to further enhancements to shareholder value," Chief Executive Ted Ayres said in a statement.
The company said it had taken an average of 148 reservations a week in the last 12 months, up from 128 a week in fiscal 2103.
There have been fears that the Bank of England's recent move to slow the rapid growth in the housing market by tightening mortgage lending criteria could hurt housebuilders. However, Bellway welcomed the move, saying it should "help ensure a long-term sustainable supply of mortgage
finance".
"There have been minor delays in processing some mortgage applications but the Mortgage Market Review has not had a material effect on the reservation rate," it said.
Bellway will release its full results for the financial year to July 31 on October 14.
By Steve McGrath; [email protected]; @stevemcgrath1
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