Newcastle-based house builder Bellway said in a trading update it expects its housing revenue to increase by more than 13% to £2.5 billion for the year to July 31, 2017.
Bellway completed the sale of 9,644 new homes, 923 more than last year.
Bellway completed the sale of 9,644 new homes, an increase of 10.6%.
It said it enjoyed 16% growth in the value of its forward order book to £1.29 billion.
Bellway CEO Ted Ayres said: “A focus on delivering growth, set against a backdrop of favourable market conditions, has helped Bellway to surpass last year’s record in respect of both volume and operating margin and further increase the group’s contribution to the supply of much needed new homes.
“This excellent trading performance, together with additional investment in attractive land opportunities, ensures that Bellway is well placed to continue its disciplined growth strategy.”
Bellway said that throughout the year, robust consumer demand for new homes has been supported by the ongoing availability of cost effective mortgage finance and the continued provision of Help to Buy.
“This has contributed to the rate of sale, enabling the group to record an average of 187 reservations per week, an increase of almost 11% compared to last year,” said the company.
“The private sales rate gathered pace in the second half of the financial year as a result of new site openings and ongoing investment in work in progress.
“Demand since the General Election has remained strong, with customers’ appetite to purchase a new home so far unaffected by any uncertainty in the wider economy.”
Bellway’s average selling price of homes sold rose 2.9% to a record £260,000 “with this diluted by a higher proportion of lower value social housing completions, which represented almost 22% of the total (2016 – 16%).”
Bellway’s operating margin for the full financial year is expected to rise to slightly in excess of 22%.
“The land market remains attractive and our land teams continue to identify value enhancing opportunities to support the growth strategy in the future,” added the company.
“Bellway contracted to acquire 11,613 plots (2016 – 9,555) on sites that meet or exceed our minimum acquisition criteria in respect of gross margin and return on capital employed.
“As a result of this investment, all of the land required is in place to meet the board’s growth aspirations in respect of the financial year ending 31 July 2018.
“Notwithstanding significant investment in both land and work in progress, Bellway ended the year with net cash of £16 million (2016 – £26.5 million).”