HOUSEBUILDER Bellway reported uplifted sales and selling prices in the six months to January 31, today.
It sold 2,597 homes, an increase of 5.8% on the same period last year, and the average selling price rose 2.3% to £187,000. The board expects prices to continue their upward trend for the remainder of the financial year.
The group has bank facilities of £300m which it has used to target land acquisitions, with £145m being spent in the six month period compared with £105m a year ago, leaving it with “modest net bank debt” of £75m.
It said the demand for new homes remains resilient and is recording an average of 97 reservations a week, since August 1, compared with 89 the previous year, a rise of 9%.
The order book stands at 2,467 homes, compared with 2,359 last year, representing a value of £453m, up from £423m previously.
Today’s statement said: “The group is, therefore, well placed to deliver further growth in profit and shareholder return through its continuing strategy of growth in volume, average selling price and operating margin.”
Mark Hughes and Rachael Applegate, analysts with Liverpool stockbroker Panmure Gordon, retained their ‘hold’ call on Bellway’s shares after the update.
They said: “The group continues to see solid growth in units, price and margin against the backdrop of relatively stagnant market conditions – but this is the case throughout the sector.
“We, therefore, maintain our hold recommendation, with Bovis as our preferred sector pick.”