Bellway house sales up 3.8% in first half

In a trading update released to the stock exchange today, Bellway said it sold 2,332 houses in the first six months of its financial year, which ended 31 January - an increase of 3.8% on the 2,247 it sold in the same period last year.

Its average selling price increased by 8% compared to last year, ending January 2011 at £168,000. At the end of January 2010 its average selling price was £155,871.

The higher selling prices will lead to higher margins on those houses sold and increase the firm’s profitability. Its margin is set to grow from 6.1% to 7.1% in the first half of its 2011 financial year.

After spending around £130m on land acquisitions, taking advantage of the fact that prices are still low, it will move from a net cash position to a debt of £7m. This is not a major concern for the firm as the statement said: “Around £130 million (2010 - £76 million) has been spent on land in the period and whilst Bellway is no longer in a net cash position, having £7 million of net debt at 31 January, it remains soundly financed, having recently renewed a bilateral facility of £150 million with Barclays, one of its banking partners.

“This new facility expires in a variety of tranches up until December 2015 and currently provides the Group with total facilities of £380 million.”

Trading in early 2011 has been “encouraging” and Bellway has a forward order book of £402m, up from £390m at the same stage last year.