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Bellway reiterates 10,000 home target as trading environment remains favourable

The property developer said anticipated volume growth of around 600 homes in the full year would enable it to complete the sale of more than 10,000 homes for the first time
House builder
Bellway said it expected average selling price in excess of £280,000

Bellway PLC (LON:BWY) has reiterated its 10,000 home target for the full year as a trading update for its third quarter revealed continued strong trading.

The FTSE 250 property developer said anticipated volume growth of around 600 homes in the full year would enable it to complete the sale of more than 10,000 homes for the first time in its history.

READ: Buoyant Bellway on track to build 10,000 new homes

The group added that since February it had achieved 233 reservations per week, up from 221 in 2017, while its order book value as of 3 June stood at £1.7bn, a 7.8% increase on 2017.

Bellway also said that an expected average selling price in excess of £280,000 and an anticipated operating margin of around 22%, earnings growth for the year should be “substantial”.

John Watson, executive chairman of Bellway, said that demand for new build homes remained strong and that the group was continuing to deliver its "long term and sustainable strategy of increasing shareholder value through responsible volume growth."

In a note to clients, analysts at Shore Capital commented the the update suggested third quarter trading was broadly in line, however, margins were slightly weaker than expected. They added that there was a "cautious tone" to a comment on pricing in the update which indicated that there is "more pressure and a greater use of sales incentives (prices cuts in effect)".

In late morning trading Tuesday, Bellway shares were down 2.3% at 3,328p.

--Refines broker comment and updates share price--

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