Bellway PLC (LON:BWY) saw its shares jump after the housebuilder said demand for its homes did not slow in the run-up to last week’s general election, with its sales growth strong and its trading performance robust, although it cautioned about “wider uncertainty” over Brexit negotiations.
In a trading update, the housebuilder said it saw a 13% increase in its reservation rate to 221 per week in the period from February 1 to June 4 2017, up from 196 per week a year earlier.
The FTSE 250-listed group added that it expected full-year completions to increase by nearly 10% on last year’s 8,721 total, with the value of its forward order book of homes due for completion beyond 31 July 2017 ahead at £900mln, against £846mln a year earlier.
READ: Bellway posts robust rise in first-half profits, says “ongoing customer demand is strong”
Bellway said: "Customer demand for new homes remains strong across all regions and has increased throughout spring, in accordance with the usual seasonal trend, unabated by any uncertainty in the weeks preceding the recent general election.”
But, it added, prime minister Theresa May's failure to win an outright majority in the election had caused "a degree of instability" and there was "wider uncertainty" as the Brexit negotiations with the European Union begin.
Ted Ayres, Bellway’s chief executive, said: “Robust market conditions, together with a clear operational focus, is enabling Bellway to continue increasing its contribution to the supply of much needed new homes.
“We have made a significant investment in land and work in progress over a number of years and this, together with a strong balance sheet and substantial operational capacity for expansion, should ensure that Bellway is well positioned to deliver further volume growth, this year and beyond.“
Shares up 4% in early trading
In early trading, Bellway shares topped the FTSE 250 leader, up 4%, or 115p at 2,965p, heading a rally by other housebuilders.
In a note to clients, analysts at Liberum Capital said: “We expect consensus estimates for FY17 to rise by around 3% as Bellway has increased volume guidance for this year, up from ‘at least 5%’ to ‘approaching 10%’.”
Reiterating a ‘buy’ rating and 3.032p price target on the stock, the analysts added: “We continue to prefer the growers to the returners, and Bellway is our preferred grower, given its track record of volume growth.”
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