Bellway PLC (LON:BWY) has delivered another upbeat trading statement, with the housebuilder highlighting strong growth in housing revenue and volumes as worries over Brexit and the hung general election result failed to impact buyer sentiment.
In an update for the year ended 31 July 2017, the FTSE 250-listed group said its full-year housing revenue is expected to increase by over 13% to £2.5bn, up from £2.2046bn in 2016.
The firm highlighted further volume growth with a 10.6% increase in the number of housing completions to 9,644, up from 8,721 a year earlier, and said its operating margin is expected to rise to slightly in excess of the 2016 level of 22.0%.
Bellway added that it has an excellent forward sales position, with 16% growth in the value of the forward order book to £1.2963bn, versus £1.1171bn in 2016.
The group said it had achieved sUBStantial growth while maintaining balance sheet strength, with net cash of £16mln, albeit down from £26.5mln at the end of 2016.
Ted Ayres, Bellway’s chief executive, said: “This excellent trading performance, together with additional investment in attractive land opportunities, ensures that Bellway is well placed to continue its disciplined growth strategy.”
Broadly neutral reaction
In an initial note to clients, reiterating a ‘buy’ rating and 3,530p target price on Bellway, analysts at UBS said: ”Demand since the General Election has remained strong and seemingly unaffected by any uncertainty in the wider economy.”
They added: “In our view, Bellway has delivered top line growth in line with expectations and reiterated guidance. We expect a broadly neutral reaction to results.”
And that was the stock’s reaction in morning trading, with Bellway shares just 0.1%, or 4p lower at 3,196p.
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