Election uncertainty has failed to rattle Bellway

 
Emma Haslett
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BRITAIN-ECONOMY-HOUSING
Bellway said sales weren't hit by the election (Source: Getty)

Shares in housebuilder Bellway edged higher today as it reported a 16 per cent rise in its order book and higher revenue expectations.

The figures

Housing revenues will increase more than 13 per cent to £2.5bn this year, from £2.2bn last year, FTSE 350-listed Bellway said in a trading update today.

That's thanks to 16 per cent growth in its forward order book, which is now worth £1.3bn, up from £1.1bn last year, and a 10.6 per cent rise in housing completions, which hit 9,644, up from 8,721 last year.

Meanwhile, operating margin is expected to rise to "in excess of" 22 per cent.

Shares rose as high as 3,225p in the first minutes of trading, before dropping to 3,194p, 0.7 per cent above yesterday's closing price.

Read more: Housebuilders are hooked on help to buy

Why it's interesting

UK house prices may have been dented by uncertainty in the run-up to the General Election, but Bellway was comfortably immune, it said today: "Customers' appetite to purchase a new home [is] so far unaffected by any uncertainty in the wider economy."

The housebuilder's outlook is strong, it said, with "significant capacity for further volume growth", and a strong balance sheet.

But despite its customers' immunity to the political situation, there is one threat looming over housebuilders: Help to Buy, which will end in 2021. On Friday we found out what would happen if the government withdrew its support earlier than that: Bellway shares closed more than four per cent lower after a story in the trade press suggested the government was reviewing its options.

It's worth pointing out, though, that in such a circumstance, Bellway would be one of the less badly-affected housebuilders: while 65 per cent of Gleeson's transactions come under the scheme, just 35 per cent of of Bellway's sales are under Help to Buy. The average is just under 40 per cent.

What Bellway said

Chief executive Ted Ayres said:

A focus on delivering growth, set against a backdrop of favourable market conditions, has helped Bellway to surpass last year’s record in respect of both volume and operating margin and further increase the group’s contribution to the supply of much needed new homes.

This excellent trading performance, together with additional investment in attractive land opportunities, ensures that Bellway is well placed to continue its disciplined growth strategy.

Read more: The housing market will remain robust, says top housebuilder

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