Bellway shares soar as house sales jump

Pre-tax profits jumped 73% to £103.8 million in the first half

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The Independent Online

Shares of Bellway climbed 5 per cent in early London trading as the housebuilder announced it expects to sell 20 per cent more homes in the year to 31 July.

Chief executive Ted Ayres said:  “People are sitting around the dining-room table and talking about buying houses again. Our construction levels are increasing to meet demand.”

Bellway’s sales for the six months to  January 31 rose 40% to an all-time high of £701.1 million, buoyed by returning confidence and the extension of Help to Buy. As of March 9,  forward orders are up 64% on last year to £829.5 million, representing 3,944 new homes. 

The stellar sales figures will eventually fall back as Bellway begins to lap the introduction of Help to Buy last year, but analysts were impressed by the evidence of growth when industry rivals are more cautious and returning cash to shareholders through special dividends.

“Bellway’s strategy of sustained volume growth should allow it to fill a gap left by the industry majors’ reluctance to chase volumes and the minors’ lack of finance,” Liberum Capital’s Charlie Campbell said.

Bellway’s push into the South has helped boost average selling prices by more than 13% to £212,071, aided by the sale of pricey flats at its Chelsea Wharf scheme in Fulham Road. 

The South now accounts for 62% of sales compared with 58% last year.

In London, with 34 sites, average selling prices are 5% ahead of expectations. Outside the capital, pricing  pressures are lower but Bellway is far less reliant on sales incentives to tempt buyers on to the ladder.  Pre-tax profits were up 73% to £103.8 million, and the first-half dividend up 78% to 16p.