Yahoo Finance Housebuilder Bellway expects average selling price to surpass £305,000
Property developer Bellway (BWY.L) expects its average selling price to be more than £305,000 ($399,526), as higher house prices helped the company stave off cost inflation.
The housing developer said the revised higher average selling price for the full financial year (April to March) was driven by mix and pricing benefits. In July 2020, the average selling price stood at £293,054, while it was £306,479 a year ago.
Bellway completed 5,694 new homes in the first half compared with 5,656 a year earlier.
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Demand for new homes was strong as the company reported a 5.8% increase in its overall reservation rate to 202 per week, and a 3.8% increase in the private reservation rate to 162 per week.
Revenue in the six months to 31 January 2021 rose by 3.5% year-on-year to £1.78bn and underlying profit before taxation was up 8.9% at £327.2m.
"Costs pressures persist across the wider sector, but overall, cost inflation has been offset by house price gains," said chief executive Jason Honeyman.
Bellway was down 4.1% during trading on Tuesday.
Despite challenges in the supply chain where materials shortages, rising fuel prices and wage costs are expected to result in continued inflationary pressures in the year ahead, Bellway said it was confident it could “deliver strong volume growth of around 10% to over 11,100 homes this financial year.”
The north east-based developer set aside another £22.1m for fire safety works on potentially dangerous cladding on its tall buildings following the Grenfell Tower tragedy. In total, since 2017, the developer has provided some £186.8m towards fixing historical fire safety issues.
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“This is a highly complex area with judgements and estimates in respect of the cost of remedial works, and the extent of those properties within the scope of the applicable government guidance and legislation, which continue to evolve," Honeyman said.
“Going forward, we are engaging positively with government to establish a workable, sector-wide solution towards more widespread fire remediation issues and are in ongoing discussions in that regard.
The board declared an interim dividend of 45 pence a share, up from 35 pence a share a year prior.
