Strong demand boosts Bellway in Yorkshire

The group currently has a single office in Wetherby, but the plan is to build up the business and open a second office in south Yorkshire.

Bellway’s chief executive Ted Ayres said: “We have high hopes for Yorkshire.

“We want to open a second office and we’re looking at Sheffield, Barnsley and up towards Wakefield. It’s too early to say where we’ll open yet. We are now building 300 homes a year in the region and we’d like to build 500 to 600.”

Mr Ayres said the group has done particularly well with its site in Crossgates in Leeds, where it is building two, three and four bedroom two storey houses.

It has also seen a strong performance at three other sites in Pudsey, Sheffield and Hull, where it has been building on the old Princess Royal Hospital site.

Announcing half year results, Bellway said growth in the north of the country was particularly strong, with the sale of 1,822 homes across its seven northern divisions.

This represents an increase of 24 per cent on last year, with significant land investment resulting in a strong performance in the North East.

Average house prices rose three per cent year on year to around £219,000 as the company has focused more on prime locations.

Bellway said it has forward sold more than 4,200 homes in the first half of its financial year, worth £975m and 25 per cent higher than the same time last year.

As part of its plans to expand its Yorkshire operation, Bellway said it has been awarded planning permission at Spofforth Hill in Wetherby, Elloughton-cum-Brough near Hull and Cottingham in east Yorkshire.

Bellway reported a 16 per cent jump in house sales in the six months to January 31.

The company completed the sale of 3,754 homes.

In contrast to its strong performance in the north, its southern divisions reported an increase of 9.1 per cent to 1,932 homes.

The group said that whilst the pricing environment remains favourable, the rate of house price growth has moderated, particularly in and around London, resulting in only modest but sustainable pricing improvements on certain sites.

Analysts at Numis expect Bellway’s annual pre-tax profit will increase 36 per cent to £335.4m in the current financial year.

They said that the group has the potential to achieve “material volume growth” over the foreseeable future.

Analyst Robin Hardy at Shore Capital said: “House sales are more biased to the first half than usual this year due to the skew of new sites and social housing contracts so the 15.7 per cent rise in sales is consistent with the previous full year guidance of plus 10 per cent.

“The strong rise in the forward sales position at 24.5 per cent is also, therefore, reflecting the unusual seasonal bias.”

Analysts at Liberum said in a note: “Profit margin guidance is around 20 per cent for the first half, which is better than guidance, which was 20 per cent for full year, suggesting first half operating profit of £164m versus £160m.”