Newcastle-based house building giant Bellway said its first-half revenue rose 1.6% to a record £1.809 billion as it announced a £100 million share buyback.

Profit before tax slipped 0.6% to £305.9 million for the six months to January 31.

Interim dividend is unchanged at 45p per share and Bellway said it “expects to maintain the total dividend for financial year 2023, in line with the prior year payment of 140.0p per share.”

Bellway reported the completion of 5,695 homes in the first half (2022 – 5,694 homes) and a 1.6% increase in the overall average selling price to £316,929.

However, the firm’s overall reservation rate in the first half fell 31.7% to 138 per week “with weaker private demand partially offset by the group’s programme of accelerating the construction of social homes.”

The firm said: “Elevated mortgage rates, particularly during the autumn, and the end of Help-to-Buy have contributed to a 43.8% decrease in the private reservation rate to 91 per week.”

Reporting on “recent trading and outlook” the company said customer demand has improved in this calendar year “helped by a seasonal uplift and a fall in mortgage rates.”

It said recent reservation rates “are higher than the levels in the quarter to 31 December 2022” although below the very strong comparative in the prior year.  

In the six weeks since the February 1, the overall weekly reservation rate was 192 (2022 – 291) and the private reservation rate was 135 per week (2022 – 239).

Bellway said it has a “healthy” forward sales position, with an order book at March 12 comprising 5,842 homes (13 March 2022 – 7,491 homes) and with a value of £1.602 billion (13 March 2022 – £2,206.5 million).  

“If the reservation rates since the start of calendar year are sustained through the spring, Bellway is well-placed to deliver volume output of around 11,000 homes in the current financial year (31 July 2022 – 11,198 homes) …” said the Newcastle firm.

“In line with previous guidance, the overall average selling price for the full financial year is expected to be around £300,000 (31 July 2022 – £314,399), with the moderation from 2022 primarily reflecting a higher proportion of social housing in the second half of the financial year …

“For the full year, a lower number of completions, together with the effects of build cost inflation and the continued use of targeted sales incentives, will lead to a further modest reduction in the underlying operating margin from the level achieved in the first half …

“The disciplined expansion of our land bank in recent years allows the group to remain highly selective in the land market in the coming months, and overall plots contracted in financial year 2023 are expected to be significantly below volume output …”

Bellway CEO Jason Honeyman said: “Bellway has delivered another strong performance, notwithstanding the challenging operating and trading conditions in the period.  

“We have been encouraged by the moderate, yet sustained improvement in reservations since the start of January 2023, and the group remains on track to deliver volume output of around 11,000 homes in the full financial year (31 July 2022 – 11,198 homes).

“Bellway’s experienced team has a proven ability to adapt to an evolving economic backdrop.  

“The proactive expansion of our land bank in recent years has provided vital strategic flexibility and our disciplined approach to capital allocation is reflected by the £100 million share buyback announced today.  

“The group has a robust balance sheet with strong cash resources and, combined with our strategic land holdings, Bellway has an excellent foundation to deliver long-term returns for shareholders.”