Bellway sells record number of homes, confident over outlook

Housebuilder Bellway sold more homes at higher prices in 2015 as it continued to trade well against a backdrop of favourable market conditions and said its order book leaves it in a solid position going forward.

In the year ended 31 July, the company sold a record 7,752 homes, up from 6,851 in 2014, while selling prices rose 5% to around £224,000 from £213,182.

Bellway said it expects the operating margin to increase by around 300 basis points to over 20% from 17.2%.

The company said its order book comprises 4,568 homes, up from 4,363 in 2014, with a value of £1.09bn compared with £924.3m.

Chief executive Ted Ayres said: “We have made a substantial investment in attractive land opportunities and the group has the balance sheet and operational capability to invest further, thereby enabling Bellway to continue delivering additional and much needed new homes.”

Bellway said demand for new homes has remained strong throughout the year, supported by more widely available and increasingly competitive mortgage finance. The company said it contracted to acquire 88 sites during the year and has spent a record £620m on land opportunities.

Numis, which rates the stock at ‘add’, said the update is solid with all metrics slightly outperforming its forecasts.

“We still think there is scope for further upgrades if market conditions remain favourable and we do not think this, or the fact the group's returns are top-quartile when normalising balance sheets across the sector, is factored into Bellway’s relative rating versus peers,” it said.

At 09:52, shares were down 0.3% at 2,446p.