Bellway set for revenue bump despite Brexit jitters

Sebastian McCarthy
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Bellway's development in Nine Elms saw increased demand in the last six months (Source: Getty)

Bellway said this morning that it was expecting a rise is sales over the year ahead, despite echoing the cautious sentiment over Brexit from many of its peers within the property industry.

Buoyed by demand for affordable homes and government schemes such as Help-to-Buy, Bellway said in a trading update this morning that it expected total revenue in the six months to the end of January to have risen more than 12 per cent to just under £1.5bn.

The FTSE 250 firm also said that the average selling price has risen by 6.5 per cent to £293,800 during the same period, largely influenced by a rise in the number of completions from the firm’s flagship development at Nine Elms in Battersea.

However, the firm added: "Early signs suggest that customer demand and reservations will follow their usual seasonal trend, however, the Board remains cautious given the uncertainty regarding the UK’s forthcoming exit from the EU and the extent to which this will affect wider customer confidence."

Bellway also said it had sold a record of 10,307 new homes, although the firm’s cancellation rate rose from 11 per cent to 13 per cent.

“Housebuilder Bellway’s trading update showed solid performance with only a small minus being higher cancellations, which the company said was driven by Brexit fears,” according to Ed Monk, associate director from Fidelity Personal Investing’s share dealing service.

Monk added: “The cancellation rate rose from 11 per cent to 13 per cent, but on most other metrics performance was strong. Average selling prices rose 6.5 per cent and the company again cited the importance of the Help-to-Buy scheme for bolstering demand. Even the troubled Nine Elms development saw increased demand and jump in selling prices.”

The news comes several months Bellway embarked on a cost savings programme in a bid to boost margins amid growing caution in Britain’s housing market.

Paul Hampden Smith, chairman, said: “Bellway has delivered another strong trading performance, achieving growth in both volume and average selling price in the six month period. Further, disciplined investment in high quality land, together with a sizeable forward order book, ensure that the Group is well placed, over the longer term, to continue increasing its contribution to the supply of much needed new homes.”

He added: “While the forthcoming exit from the EU is providing a degree of wider economic uncertainty, Bellway’s balance sheet is solid and the Group retains its ability to respond positively to opportunities in the land market as they arise.”

Yesterday leading UK housebuilders Redrow and Barratt both posted a rise in profits, with rising demand from first-time buyers giving the developers a much-needed boost.

Read more: Redrow hails record profit as founder bows out on a high