2:49 PM, June 14 2017
Bellway Plc surged by over 5% post the company announced its trading update. As per the trading update, sales demand was pretty strong, with a 13% increase in the reservation rate to 221 per week versus 196 per week in the year 2016. The financial year 2017 was another year of significant volume growth with the increase in housing completions for the full year to 31 July 2017 is expected to approach 10%. Also, the robust trading performance should result in an operating margin slightly in excess of 22%.
As per the management guidance, the housing market remains positive continues to be supported by low unemployment, good availability of affordable mortgage finance and the continued provision of Help to Buy. Customer demand for new homes remains strong across all regions and has increased throughout Spring. However, on account of strong sales performance along with substantial investment in work in progress, the management is confident of 10% volume growth for the year ending 31st July 2017, which is ahead of company’s original target. The management maintained its guidance in line with the previous guidance that the group would achieve the average selling price of around £260,000 in the current financial year.
The CEO of the company,Ted Ayres commented on the same, “Robust market conditions, together with a clear operational focus, is enabling Bellway to continue increasing its contribution to the supply of much needed new homes. We have made a significant investment in land and work in progress over a number of years and this, together with a strong balance sheet and substantial operational capacity for expansion, should ensure that Bellway is well positioned to deliver further volume growth, this year and beyond. This successful implementation of our disciplined growth strategy is leading to ongoing enhancements in shareholder value”