Bellway expects a 25% increase in housing completions in full year

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Bellway PLC (LON:BWY) has seen demand for its houses remain strong in the first four months of its new financial year, though it has been unable to keep up the breakneck pace from the early weeks.

In the 17 weeks since the start of August, the housebuilder has enjoyed a reservation rate of 210 houses per week, which is down from the 239-per-week rate in the first nine weeks of the period but still 6% ahead of where it was a year ago.

Pricing was said to be firm and in-line with expectations, with the order book of 6,186 homes worth £1.77bn, which is down from the £1.87bn in mid-October although up from £1.49bn this time last year.

For the year to end-July 2021, Bellway’s management expects a 25% increase in housing completions from the 7,522 seen last year.

Net cash stood at £242.9mln as of November 29, 2020, versus a net debt position of £45.7mln a year earlier, with what the FTSE 250-listed housebuilder said was “substantial capacity to invest further in land”. 

During the past 17 weeks, there has been “disciplined investment in high quality land to drive volume and margin recovery in the years ahead”, it added, securing contracts on 4,163 plots across 24 sites compared to 3,229 across 20 sites in the same period a year ago.

After announcing a final dividend of 50p per share for the past financial year, the group’s board said it “expects to increase future dividend payments, commensurate with the recovery in earnings”.

Broker Peel Hunt said: “Like the rest of the sector, the shares have been caught up in the ‘No-deal crosshairs’ in the past week or so.”

The shares were down 3% to 2,687p in early trading on Friday.

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