The north-east based builder Bellway (LON:BWY) sold a record number of homes in the first half, buoyed by the “increasingly competitive mortgage finance”.
In the six months to July 31, it completed 7,752 sales – a 13% increase on the previous year – at an average price of £224,000, up 5% on 12 months ago.
The forward order book is healthy at 4,568 houses valued at almost £1.1bn, which bodes well for the full-year outcome.
The pre-close trading statement also revealed that operating profit margins increased by a full three percentage points and that Bellway had spent £620mln on land – another record.
It has a strong balance sheet, with only £39mln of debt, and unveiled plans open a new division in Kent, and it pointed out with interest rates at historic lows, the outlook, at least for the short to medium term, looks favourable for the group.
Indeed, builders across the board were given a boost on Thursday by the dovish stance of the Bank of England, which voted 8-1 in favour of keeping the base rate on hold.
This caused a minor tremor as many analysts had anticipated that two or three policymakers would vote for an increase.
Such seeming unanimity has been interpreted as suggesting that a rate hike won’t now occur until next year.
Bellway’s chief executive was upbeat about the future: “We have made a substantial investment in attractive land opportunities and the group has the balance sheet and operational capability to invest further, thereby enabling Bellway to continue delivering additional and much needed new homes.”