Bellway PLC (LSE:BWY) said it expects to report record revenues and housing completions for the year to 31 July 2022, as strong demand for homes continues across the UK.
In a trading statement, the housebuilder said housing revenue was £3.5bn during the year, up from £3.1bn in the 2021 financial year, while housing completion grew by 10.5% to a record 11,198 homes at an average selling price of £314,400.
The company forecast a fall in the average selling price for the year to July 2023 to £300,000, reflecting changes in geographical and product mix.
The UK housing market remains “robust”, driven by good mortgage availability and low unemployment, the FTSE 250 company noted, and said its overall reservation rate climbed by 6.9% to 218 homes per week during the year.
It reported a “strong” forward sales position with an order book comprising 7,223 homes, up from 7,082, at a value of £2.1bn (£2bn), which underpins its target of an annual output of around 12,200 homes for the year ending 31 July 2023, representing volume growth of around 20% over a two-year period.
"Bellway has delivered another strong performance, with volume output and housing revenue reaching record levels for the group,” said chief executive Jason Honeyman.
The company said house price inflation had offset rising build costs pushed higher by increases in energy prices and wage costs as well as supply chain constraints.
Materials availability improved in the second half of the year and although shortages are expected to continue in the year ahead, it has measures in place to ease production constraints.
It said the planning system remains slow, partly due to a Covid-related backlog, which has restricted the pace of outlet openings. Bellway operated from 235 outlets at the end of July, down from 254 a year earlier.
It ended the year with net cash of £245mln, down from £330.3mln a year before.
“Looking ahead, our sizeable forward order book and continued strong investment in land puts the group in an excellent position to deliver another record year of volume output, notwithstanding the ongoing challenges in the planning system and upcoming end of the Help-to-Buy scheme," said Honeyman.
“In addition, a robust balance sheet continues to provide strategic flexibility and a platform for our long-term strategic priorities of volume growth and value creation."