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Bellway PLC on Tuesday said it delivered a strong first-half performance despite a challenging market, as it noted the sensitivity of demand to mortgage affordability.
The Newcastle, England-based housebuilder said in the six months to the end of January total housing completions rose 12% to 4,577 homes from 4,092 in the previous year.
The average selling price increased slightly, by 0.4%, to £310,600 from £309,278 as housing revenue climbed 12% to over £1.42 billion from £1.27 billion in the prior year.
The private reservation rate was ahead of the prior year at 0.51 per outlet per week, up by 19% from 0.43 per outlet per week.
The firm noted that there was no typical autumn increase in reservations but said it had been encouraged by a seasonal pick-up in the early weeks of the spring selling season.
The forward order book on January 31 grew 30% from the previous year to £1.31 billion from £1.01 billion.
Bellway said it expects to deliver full-year volume output of at least 8,500 homes, up from 7,654 in the previous year, with output weighted towards the first-half.
Despite encouragement from early spring enquiries, it said it is ‘mindful of the sensitivity of customer demand to mortgage affordability and the evolving economic backdrop’.
It said the ‘long-term fundamentals’ of UK housbuilding are positive, and it is well-placed for volume growth in the years ahead.
The firm contracted to purchased 5,246 owned and controlled plots during the period, up from 1,237 plots in the prior year, with a contract value of £378.2 million, increased from £103.4 million.
Chief Executive Jason Honeyman said: ‘Bellway has delivered a strong first half performance in challenging market conditions. While mortgage interest rates have increased modestly since the autumn, customer demand has remained robust, and the group has a healthy order book to support our targeted growth in volume output for the full year.
‘The group has a strong balance sheet and land bank, and we remain very well-positioned to capitalise on future growth opportunities while continuing to play an important role in meeting the growing need for new homes across the country.’
Bellway shares were down 5.5% to 2,422.00 pence in London on Tuesday morning.
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