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Saturday 18 August 2018

Bellway notches up record results after surge in home sales

The housebuilding giant reported a 12.6% rise in pre-tax profits to £560.7 million for the year to July 31.

Housing stock
Housing stock

By Holly Williams, Press Association Deputy City Editor

Housebuilding giant Bellway has posted record annual profits and laid the foundations for another bumper year as it predicted buoyant sales and price rises.

The Newcastle-based group reported a 12.6% rise in pre-tax profits to £560.7 million for the year to July 31 after seeing the number of completions rise by 10.6% to a new all-time high of 9,644 homes.

Earnings jumped 16.2% to £571.6 million.

It dismissed concerns over a property market slowdown amid Brexit uncertainty and a squeeze on household finances, saying it expects sales volumes to grow by at least 5% over the new financial year.

Average prices leapt 3% to just over £260,000 in the past year and are set to surge again to £280,000, it added.

Private sale price growth was even stronger in the year, at 6.3% to £296,018, in part driven by “modest low, single digit house price inflation”.

The group has been benefiting from rock-bottom interest rates as well as Government support for the new homes market through its Help to Buy scheme.

Bellway also thanked a “favourable” planning environment and an “attractive” land market.

Its robust outlook revealed the group’s forward order book had risen by 17.4% to £1.4 billion as of October 1, with 5,034 homes reserved.

Bellway said it had achieved 171 reservations a week in the first nine weeks of the year so far – up 5.6%.

It said: “This strong forward sales position, together with investment in land and work in progress and plans to open a new, twentieth trading division in the north of the country this financial year, should enable Bellway to deliver further growth in volume in the year ahead.”

Thomas Buisson, analyst at Liberum, praised a strong set of results, which he said were better than expected.

He added the current trading figures offer “confidence that the group is well positioned to deliver on its future growth ambitions”.

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