The group is seeking pounds 33.6m through a two-for-seven rights issue at 320p a share. Its shares closed down 2p at 394p yesterday. In March 1991, it raised pounds 25m through a five-for-eleven issue at 220p, although almost 48 per cent was left with the underwriters.
Alan Robson, Bellway's finance director, said the group was not embarrassed to return to the market so soon. 'We feel it is the right time to raise fresh cash. The housing market has been in recession for three years, but we have been expanding our profits and production, even in these difficult times.'
The group has spent pounds 60m on housing land since the last rights issue and now owns 7,000 plots. It has expanded its coverage into North Yorkshire, the East Midlands and the West Country.
Bellway aims to increase its housing sales to 4,000 a year 'within a few years', compared with expected sales of 2,200 in the year to July. That means it will have to spend pounds 75m a year to maintain its land bank at about two and a half years' supply.
View from City Road, page 29Reuse content