UK housebuilder Bellway PLC (LON:BWY) has shrugged off the uncertainty caused by last year’s EU referendum vote to enjoy a solid six months.
Analysts had expected the housing and land market to take a turn for the worse after the ‘leave’ victory at the end of June, but Newcastle-based Bellway has put paid to that theory with its latest trading update.
The group completed 4,462 homes in the six months to 31 January 2017, up almost 7% from the same period a year earlier.
For each of those completions, Bellway achieved an average operating margin of 22%. It expects to maintain this figure for the full financial year.
The forward order book has increased by almost £100mln as well and now stands at £1.12bn, with Bellway contracted to build 4,487 homes.
As a sign of confidence in its outlook, the company ploughed a further £380mln into new developments during the six months, up from the £315mln it invested last year.
“Bellway has delivered another strong half year result, increasing both the number of legal completions and the value of the forward order book,” said chief executive Ted Ayres.
“Market conditions remain positive and accordingly Bellway is continuing to invest in a controlled manner.”
The increased investment, and £90mln dividend pay-out last month, did have a knock-on effect on net debt, which rose to £175mln (31 January 2016: £58.9mln) in the six months.
The firm pointed out that this still represents “modest” gearing and it expects to reduce this by the end of the current financial year.
The strong order book coupled with the ongoing investment in new opportunities should see Bellway deliver volume growth of around 5% over the course of the current financial year, the group said.
The average selling price during the period was £256,000, down from £257,280 in the corresponding period last year.
That was due to Bellway completing more lower value, social homes. It still expects the overall average selling price for the full-year to rise to around £260,000.
The full set of interim results is due to be released on Tuesday 21 March.