Bellway expects full year volume growth, increased profit



LONDON (ShareCast) - Housebuilder Bellway (LSE: BWY.L - news) reported an increase in completed home sales and average selling price and said it is well placed to deliver further growth in profit.

The group completed the sale of 2,597 homes the six months ended January 31st 2013 compared to 2,455 the same time a year earlier. The average selling price of homes sold increased by 2.3% to £187,000, following changes in product and geographic mix.

Bellway said it expects that the average selling price will continue its upward trend for the remainder of this financial year.

Operating margins continue to improve, mostly due to the increasing proportion of completions from higher margin land, acquired since the downturn.

As a result, operating margins are expected to exceed 12.5% for the first six months of the year versus 10.1% before and will continue to improve throughout the rest of the financial year.

The house builder said demand for new homes remains resilient, with an average of 97 reservations per week since August 1st, up from 89 in 2012.

The order book at January 31st 2013 stood at 2,467 units compared to 2,359 in 2012, representing a value of £453m.

"With 82% of the full year target now secure, the board expects to achieve volume growth of around 5% in the current financial year, assuming reservations over the spring selling season follow their usual upward trend," said Bellway.

"The group is therefore well placed to deliver further growth in profit and shareholder return through its continuing strategy of growth in volume, average selling price and operating margin."