Update: Bellway raises £44.8m through placing

6th Aug 2009 11:44

Housebuilder Bellway raised £44.8m through an accelerated bookbuild process to help fund the acquisition of more land and said it sees no further asset write downs, providing current conditions continue. The group also said today that despite seeing the traditional decline in visitor numbers during the summer season, current sales rate being achieved is ahead of management's expectations. In the last year, although market conditions have been "extremely tough," conditions were more robust in the southern region.Around 60% of its legal completions have been derived from the south, especially in its North London, Essex and Thames Gateway divisions. In the north, its Yorkshire, North West and Midlands divisions have experienced sustained weakness throughout the last twelve months.The group will use the placing - 5m shares at 779p each - to increase work in progress spend on existing developments and increase the number of new developments. During the course of the year, it legally completed the sale of 4,380 homes against 6,556 from last year. The average selling price was around £154,000 (2008 - £169,729)The group said the fall of 9.3% in its average selling price was primarily as a result of incentives offered and a higher percentage of social housing sales. Sales incentives per unit, through discounting, shared equity and part exchange, have been widely used but have not increased over the last few months. It is anticipated that the operating margin will be around 6% - 7%.The order book at 31 July of reservations for future completion stands at £368m (2008 - £37m)."Notwithstanding the extreme market conditions experienced over the last eighteen months, the Group has retained a national coverage and remains in a strong position to grow should markets improve, especially given its robust balance sheet and low gearing," it said.