Bellway PLC (LSE:BWY) shares surged over 6% on Tuesday after the company reassured trading was improving thanks to a recovery within the housing market.
Though the FTSE 250-listed housebuilder reported a 62% slump in profit for 2023, lower mortgage rates were said to have boosted demand more recently.
Weekly private reservations had jumped 48.5% since August to 147 as a result, leaving Bellway anticipating 85,000 completions this year, against 7,654 in 2023.
“The stars are finally aligning for the housebuilding sector,” AJ Bell analyst Russ Mould commented following the results, citing government pledges for building reform, falling interest rates and growing house prices.
“It’s no wonder that Bellway is so optimistic despite reporting a drop in profits.”
He noted Bellway’s land bank of 95,292 plots meant it was ready to press ahead with new building, while year-end debt of £10.5 million left the firm in a “relatively strong financial state”.
Bellway had also welcomed government promises of building reforms, with eToro analyst Adam Vettese noting the move would “make more sites available for development”.
He added Bellway’s access to £530 million worth of committed debt finance left it well positioned to further facilitate a growing order book.
Shares jumped 6.7% to 3,255p following the update.