Newcastle’s Bellway sees order book top £1.9bn

Newcastle-based house building giant Bellway said on Tuesday its order book has grown to 6,628 homes with a value of £1.94 billion and that it remains on target to deliver volume growth of around 10% to over 11,100 homes in its current financial year.

In a trading update for the six months ended January 31, 2022, Bellway said its average selling price rose by 2.8% to £311,800 and is now expected to be over £300,000 for the full financial year.

The company said: “Bellway has delivered a good first half trading performance, with housing revenue expected to grow by more than 3% to around £1,775 million (2021 – £1,714.9 million).

“The number of completions rose slightly to 5,694 (2021 – 5,656), a new record for the group, and slightly ahead of the prior half year, which benefitted from pent-up demand and elevated construction progress …

“We remain active in the land market and have contracted to purchase 8,660 plots (2021 – 8,848 plots) across 45 sites (2021 – 54 sites), with a contract value of £567.8 million (2021 – £452.8 million).

“This strong level of investment will help Bellway to achieve its future growth ambitions and further strengthens the land bank following the front-footed approach to investment throughout financial year 2021.

“The anticipated average gross margin on the newly acquired land, based upon revenue and costs at the time of acquisition, is around 23%.”

Bellway CEO Jason Honeyman said: “Bellway has delivered a strong first half performance, achieving record volume output and housing revenue, notwithstanding the wider economic challenges presented by labour, material and fuel shortages and COVID-19 related absenteeism.

“We have continued our disciplined investment in land and enter the second half of the financial year with a strong order book and a backdrop of ongoing, positive trading conditions.

“Going forward, Bellway is on track to deliver its target volume growth of around 10% this financial year and further growth to around 12,200 homes in financial year 2023.

“Thereafter, our strong balance sheet and capacity to invest positions the group well to continue its long-term and disciplined growth strategy.”