Bellway’s results are boosted by ‘robust’ housing market

Bellway has enjoyed a healthy rise in profits
Bellway has enjoyed a healthy rise in profits
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Housebuilder Bellway has cheered a double-digit rise in profits as Britain’s “robust” housing market helped it sell more homes at a higher price.

Pre-tax profits jumped 17% to £288.7 million for the half-year, as the number of homes sold ticked 6% higher to 4,741.

Revenues were also bright, climbing 15% to £1.3 billion for the six months ending in January thanks to 7% growth in the average selling price at £275,945.

Bellway, which employs around 2,000 people across the UK, hiked its interim dividend by 28% to 48p per share.

The FTSE 250 firm said it expected volumes to pick up by around 600 homes at year-end, helping it reach an all-time high of 10,000 new homes per year.

The update comes after Berkeley Group saw its share price take a hammering on Friday after the FTSE 100 rival spooked investors by failing to ramp up production.

Berkeley, one of Britain’s biggest housebuilders, said “prevailing economic uncertainty” were factors that meant it was “unable to increase production beyond the business plan levels”.

Prime Minister Theresa May moved to tackle Britain’s housing crisis in major speech earlier this month when she laid blame on some housebuilders for sitting on land that is ripe for development.

John Watson, Bellway executive chairman, said it was a “strong” half-year performance for the Newcastle-based group.

He said: “The group has invested significantly in land to achieve future growth, in a market place in which customer demand is robust and mortgage availability remains good.

“This positive trading environment, together with a substantial order book, bodes well for the full year and should enable the group to complete in excess of 10,000 new homes.”

The firm said operating margins improved to 22.2% for the six-month period, with forward order books up 7% to £1.5 billion.

Bellway said the Government’s Help to Buy scheme, coupled with stamp duty relief for first-time buyers, was keeping the housing market active.

It also shrugged off Brexit, saying customer confidence was “seemingly unaffected by the ongoing uncertainty surrounding the forthcoming exit from the EU”.

While the London housing market has proved a sticking point for some developers, Bellway sold 259 more homes at 560 for the half-year.

It said: “Demand in the capital is most pronounced at and around this affordable price point, where Bellway focuses its operations.”