Alan Robson, finance director, said the supply of good land was increasing as sellers sensed the end of the recession. However, finding land on acceptable terms remained difficult and the group continued to apply its strict purchase criteria.
Despite the purchases - some of which have still to be paid for - the group has more than pounds 40m in the bank, compared with pounds 16m when it launched the rights issue. 'If the current rate of purchases continues, we may be back into borrowings in the next financial year,' Mr Robson said.
Bellway made pounds 5.8m pre-tax profit in the six months to January, up from pounds 5.5m last time, on sales 7 per cent ahead at pounds 56.1m. Earnings per share rose to 7.8p from 7.5p.
The interim dividend was held at 4p, but it is forecasting an increase in the final payment from 7.5p to 8p - at the time of the rights issue, it merely promised a maintained payment. It also reiterated its forecast of not less than pounds 16m pre-tax profits, based on the sale of at least 2,200 houses, for the full year.
The recovery in the housing market evident at the start of the year has continued and reservations are running about 30 per cent ahead of last year. But Mr Robson said business remained patchy. House prices are firming, however, and the group is managing to cut incentives to purchasers at some of its developments.
Bellway aims to increase sales to 4,000 a year eventually. 'If the market continues to improve, that aim will get closer,' Mr Robson said.
The group sold 833 houses in the six months up from 698 the previous year. However, average prices fell by pounds 9,000 to pounds 63,000, partly due to an increase in sales to housing associations which generally attract lower margins.
Interest receipts fell from pounds 1.4m to pounds 792m as the group used up the proceeds of the previous pounds 25m rights issue, launched in 1991.
The shares closed 1p higher at 399p - 79p above the rights price.