Bellway celebrates nine per cent profit boost

Helen Cahill
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Zac Goldsmith And David Cameron Visit A Housing Construction Site
The UK housebuilder has benefited from the Help to Buy scheme (Source: Getty)

Bellway's share price edged up at the open after the housebuilder posted a steady increase in profits for the first half.

The figures

Bellway's revenue for the half-year ending 31 January grew 5.9 per cent, up from £1.08bn to £1.15bn. Gross profit was up nine per cent to £296.7m, as compared to £272.4m for the same period the year before.

Operating profit grew 8.6 per cent, increasing from £232.5m to £252.6m.

At time of writing, Bellway's share price was up 0.5 per cent.

Why it's interesting

Bellway said this morning that Help to Buy has been boosting new build home sales but that house price growth has "moderated...particularly in London". This slowing in house price growth has hit many housebuilders, with developers such as Barratt being forced to cut prices in the capital.

However, Bellway was keen to point out that its reservations have increased by six per cent, growing from 156 reservations per week to 166 reservations per week.

What Bellway said

Bellway's chairman, John Watson, said: "Bellway's strong operational focus and consistent execution of its growth strategy has resulted in a record number of legal completions in a first half year and another excellent financial performance.

"Bellway is achieving this growth whilst retaining a focus on return on capital employed and maintaining an appropriate and conservative use of bank debt and land creditors."

What analysts said

Anthony Codling, analyst at Jefferies Bank, said: "Whilst some have experienced growing pains, Bellway has delivered growth in volumes alongside improving customer service, and we expect to see more, in both, to come.

"Help to Buy remains a key feature of the results accounting for almost 35 per cent of completions, up from 29 per cent in the previous period, but even excluding Help to Buy the use of selling incentives remains low."

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