Bellway achieves 'record' sales amid Brexit uncertainty

Bellway Homes on Thursday reported record interim sales and an increase in house completions, expressing optimism despite remaining "cautious" on Brexit.

For the six months ended 31 January the housebuilder reported that it expected revenue to come in at £1.5bn, up 12% from the year before, as average selling price increased by 7% to £293,800 and the weekly reservation rate rose by 3% to 183, as government schemes such as 'Help to Buy' bolstered demand for affordable homes.

In total, the London-listed company said it sold a record of 10,307 new homes during the period, although its cancellation rate rose from 11% to 13%.

Paul Hampden Smith, chairman of Bellway, said: "Bellway has delivered another strong trading performance, achieving growth in both volume and average selling price in the six month period. Further, disciplined investment in high quality land, together with a sizeable forward order book, ensure that the group is well placed, over the longer term, to continue increasing its contribution to the supply of much needed new homes."

Bellway said its order book fell to £1,171.3m at the end of the first half, down from £1,297.4m at the same point last year, with full year volumes expected to exceed last year’s record of 10,307 new homes.

Meanwhile, net bank debt was cut from £131.4m to £26.6m as the company temporarily slowed the rate of investment on a number of site acquisitions, pending the outcome of the UK’s exit from the EU.

"While the forthcoming exit from the EU is providing a degree of wider economic uncertainty, Bellway’s balance sheet is solid and the group retains its ability to respond positively to opportunities in the land market as they arise," said Hampden Smith.

A statement from Bellway said that, in the long term, the underlying requirement for affordably priced new-build homes remains strong, with the company well positioned to capture this demand with its strong balance sheet, flexible capital structure and operational capacity to continue its strategy of disciplined volume growth.

A note from Canaccord said: "At this stage, we think consensus is unlikely to move materially with slower growth in H2 expected as the group builds its order book after a strong first half; margins edging back is already in consensus estimates. While we see attractive medium-term value, after a strong bounce recently the near-term upside is likely to be limited given the macro and political context, but the update reads relatively reassuringly."

Bellway Homes' shares were down 2.86% at 2,846.00p at 0918 GMT.