Bellway profits on recovery in northern areas

BELLWAY delivered a jump in first half profits yesterday helped by a rise in its average selling price and improving performance in its north England sales outlets.

The Newcastle-based housebuilder said pre-tax profits rose by 47.5 per cent to £59.9m in the six months to the end of January, while revenues rose 9.6 per cent to £502.5m.

It has sold 2,597 homes over the period, up 5.8 per cent from the previous year, while the average selling price rose 2.6 per cent to £187,426.

“The group has delivered another strong set of results, having achieved further growth in volume, average selling price and operating margin and this has contributed to an improvement in return on capital employed,” Bellway’s chairman John Watson said.

Bellway said reservations for the six weeks since 1 February had been boosted by a rise in visitors to sites and that it has so far has reserved or legally completed 94 per cent of its current full year volume target.

Its housebuilding peers have in recent weeks said they are optimistic that the housing sector is on a path to recovery.

Most have defied a sluggish market to post robust profits by buying land cheaply during the recession and focusing on the economically-stronger south of England, and were given a further boost last week after chancellor George Osborne unveiled a scheme to provide and guarantee new mortgage loans.

Bellway said it welcomed the measures and that it was hopeful that they would make it easier for buyers to access mortgages.

It also raised its interim dividend by 50 per cent to nine pence per share.