Bellway confident of growth as it increases completions 12%

Bellway has increased its completions in the first half of its reporting year by 12%.

In a trading update, the housebuilder reported 4,577 completions for the six months to the end of January compared to 4,092 for the same period the previous year.

Bellway, which pulled out of a bid for Crest Nicholson last summer, said it is on track to complete 8,500 homes in the full year in line with its previous guidance.

The housebuilder’s housing revenue rose by 12% to £1.42bn and it increased its private reservation rate per outlet per week from 0.43 to 0.51.

Bellway said it expects to open more than 30 new outlets in the second half of the financial year, operating from an average of 245.

Its forward order book as of 31 January comprised 4,726 homes with a value of £1.3bn, up from £1bn last year.

Following the update, Bellway’s share price dropped briefly by 2.1%, before bouncing back to 0.9% below its price when trading opened this morning.

Anthony Codling, managing director equity research at RBC Capital Markets, said Bellway is on track to deliver its full-year guidance of operating profit at around £290m.

He said: “The robust performance of the group is at odds with its subdued share price performance. The underlying housing market appears to us to be stronger than investors think it is.

“Mortgage rates have ticked up since Bellway announced its two-year growth plans, but customer demand has remained firm, and Bellway remains confident about delivering on its growth expectations for the full year.”

Bellway will release its interim results on 25 March.