Bellway order book soars 27% to £2.4bn

Newcastle-based house building giant Bellway said on Tuesday its order book rose 27.3% to £2.404 billion, comprising 8,152 homes, during the period from February 1 to June 5, 2022.

In a trading update for the period, Bellway said housing completions for the full year are still expected to grow by around 10% to more than 11,100 homes at an anticipated average selling price in excess of £305,000.

Bellway said it still expects to deliver further volume growth in financial year 2023 to an annual output of around 12,200 homes.

Bellway CEO Jason Honeyman said: “Bellway has delivered another strong trading performance and despite the wider macroeconomic uncertainty, the group continues to perform well.

“Demand is strong, reservations are ahead of last year and our order book remains substantial …

“The positive sales market and the further investment we have made in land provides a strong platform to enable the group to continue its growth strategy in the years ahead.”

Andy Murphy, director at investment research and consultancy firm Edison Group, said: “In H2TD, sales demand has been strong with average reservations of 253 plots/week, up from 239 last year and 158/week in 2020.

“Price inflation has remained positive offsetting build cost inflation. Therefore Bellway has been active in the land market, contracting on 13,496 plots since August, down from 16,582 last year and up from 10,079 in 2020.

“Bellway ended the period to 5 June with net cash of £160m, from which the 45p interim dividend will be paid on 1 July.

“Bellway was awarded 5* homebuilder status by the HBF for the 6th year in a row highlighting the focus on its Customer First approach which has been augmented by the appointment of a new Customer Experience Director

“The forward order book is strong having grown 27.3% to £2,404m and comprising 8,152 homes.

“This will contribute to the unchanged FY guidance of 10% volume growth to 11,100 homes at an anticipated average selling price of over £305,000.

“The underlying operating margin is expected to be c18.5%, 150bp higher than last year. Bellway trades on a PER of 5.4x and yields 6.2% which are both undemanding ratings.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.