Bellway PLC (LON:BWY) has become the latest UK housebuilder to shrug aside the uncertainty caused by June’s Brexit vote as it reported a 7% rise in its rate of reservations in the four months since August.
In a trading statement ahead of the FTSE 250-listed firm’s AGM later today, chief executive Ted Ayres said: “The Group has made an encouraging start to the financial year and customer demand for new homes continues to be robust.
“The strength of the underlying housing market supports further growth and this, together with Bellway’s strong balance sheet and significant operational capacity, ensures that the Group is well positioned to continue its disciplined growth strategy.”
Shore Capital analyst Robin Hardy called the update "positive but essentially in line."
In a note to clients, he said: "If we think back to last year there was similar guidance for sales growth at this stage of the year but that guidance grew with each quarterly update and the actual growth in output for the year was 12.5%."
READ: Bellway encouraged by post-Brexit trading
Bellway said it had taken an average of 176 reservations per week over the period, up from 165 a year at the same stage last year, supported by the opening of 46 new trading outlets.
It added that customer interest is strong, with site visitor numbers and ‘hits’ to the Group’s website both ahead of last year.
The group said the pricing environment is firm across the country in those areas where it has a presence, with sales prices achieved on reservations in line with expectations.
In London, where Bellway’s focus continues to be on affordably priced new homes, it said prices have remained stable and demand robust.
It said overall cancellation rates only ticked up slightly to 11%, up from 10% in 2015.
Land buying increases
The group said it has contracted to acquire 40 new sites, up from 37 in 2015, and has spent £263million on land and land creditors, against £235mln in 2015.
Bellway said: “Whilst remaining mindful of the longer term uncertainty as a result of the vote to leave the EU, the positive autumn trading performance has given the Board reassurance to cautiously recommence the Group’s programme of land acquisition, following a brief planned hiatus in the weeks after the referendum.”
And the group concluded: “Trading performance in the current financial year has been encouraging and the Board now expects that the Group should be able to deliver volume growth of around 5%, assuming customer confidence is maintained and there follows the usual seasonal rise in demand throughout the forthcoming Spring selling season.”
Bellway said it plans to reward shareholders with a final dividend of 74.0p per share, up from 52.0p last year, giving a record total dividend for the year of 108.0p, an increase of 40.3% compared to the prior year.
In reaction to the update, Bellway shares on the FTSE 250 index were up 1.8%, or 43p at 2,433p.
-- Adds broker comment, share price --