Bellway PLC (LON:BWY) has seen demand for its houses remain strong in the first four months of its new financial year, though it has been unable to keep up the breakneck pace from the early weeks.

In the 17 weeks since the start of August, the housebuilder has enjoyed a reservation rate of 210 houses per week, which it 6% ahead of where it was a year ago, but suggests a 30% year-on-year decline in November, after a 239-per-week sales rate in the first nine weeks of the period.

Pricing was said to be firm and in-line with expectations, with the order book of 6,186 homes worth GBP1.77bn, which is down from the GBP1.87bn in mid-October although up from GBP1.49bn this time last year.

For the year to end-July 2021, Bellway’s management expects a 25% increase in housing completions from the 7,522 seen last year.

Net cash stood at GBP242.9mln as of November 29, 2020, versus a net debt position of GBP45.7mln a year earlier, with what the FTSE 250-listed housebuilder said was “substantial capacity to invest further in land”.

During the past 17 weeks, there has been “disciplined investment in high quality land to drive volume and margin recovery in the years ahead”, it added, securing contracts on 4,163 plots across 24 sites compared to 3,229 across 20 sites in the same period a year ago.

After announcing a final dividend of 50p per share for the past financial year, the group’s board said it “expects to increase future dividend payments, commensurate with the recovery in earnings”.

The shares were down 2% to 2,701p in Friday morning trading.

Analysts at UBS said the guidance for completions suggests a modest upgrade to consensus forecasts of 22% growth, which was felt to be encouraging considering the wider risks around a hard Brexit.

The fall in the sales rate in November was thought to reflect the impact of the second lockdown, limited new Helpt to Buy sales as the new scheme starts on December 16 and the existing scheme is constrained by product availability, plus a high base of comparison this time last year.

Broker Peel Hunt said: “Like the rest of the sector, the shares have been caught up in the ‘No-deal crosshairs’ in the past week or so.”

–Adds broker comment–

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