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Bellway sees strong growth in housing revenue, volumes as worries over Brexit, election result fail to impact

In an update for the year ended 31 July, 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.
Bellway builder
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

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.

READ: Bellway shares jump as builder says demand did not slow in the run-up to the general election

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.

 -- Adds analyst comment, share price --

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