Bellway PLC Trading Update

 
TIDMBWY 
 
Bellway p.l.c. 
 
                                Trading Update 
 
                             Tuesday 8 August 2017 
 
Bellway is today issuing a trading update for the year ended 31 July 2017 ahead 
of its preliminary results announcement on Tuesday 17 October 2017. 
 
Highlights 
 
  * Housing revenue is expected to increase by over 13% to GBP2.5 billion (2016 - 
    GBP2,204.6 million). 
 
  * Further volume growth with a 10.6% increase in the number of housing 
    completions to 9,644 (2016 - 8,721). 
 
  * The operating margin is expected to rise to slightly in excess of 22% (2016 
    - 22.0%). 
 
  * Excellent forward sales position with a 16% growth in the value of the 
    forward order book to GBP1,296.3 million (2016 - GBP1,117.1 million). 
 
  * Substantial growth achieved whilst maintaining balance sheet strength, with 
    net cash of GBP16 million (2016 - GBP26.5 million) providing significant 
    capacity for future investment. 
 
Ted Ayres, Chief Executive, commented: 
 
"A focus on delivering growth, set against a backdrop of favourable market 
conditions, has helped Bellway to surpass last year's record in respect of both 
volume and operating margin and further increase the Group's contribution to 
the supply of much needed new homes.  This excellent trading performance, 
together with additional investment in attractive land opportunities, ensures 
that Bellway is well placed to continue its disciplined growth strategy." 
 
Market and current trading 
 
Throughout the year, robust consumer demand for new homes has been supported by 
the ongoing availability of cost effective mortgage finance and the continued 
provision of Help to Buy.  This has contributed to the rate of sale, enabling 
the Group to record an average of 187 reservations per week (2016 - 169), an 
increase of almost 11% compared to last year. 
 
The private sales rate gathered pace in the second half of the financial year 
as a result of new site openings and ongoing investment in work in progress. 
Demand since the General Election has remained strong, with customers' appetite 
to purchase a new home so far unaffected by any uncertainty in the wider 
economy. 
 
Results 
 
Bellway completed the sale of 9,644 new homes (2016 - 8,721), 923 more than 
last year and an increase of 10.6%.   The average selling price of homes sold 
rose by 2.9% to a record GBP260,000 (2016 - GBP252,793), with this diluted by a 
higher proportion of lower value social housing completions, which represented 
almost 22% of the total (2016 - 16%).  The pricing environment remained 
positive, supported by robust demand throughout the country. 
 
The growth in volume and average selling price should result in housing revenue 
increasing by over 13% to GBP2.5 billion (2016 - GBP2,204.6 million).  This is 
almost 2.3 times the housing revenue reported just four years ago for the year 
ended 31 July 2013, demonstrating the rapid rate of increase achieved as a 
result of the ongoing growth strategy. 
 
As previously reported, the operating margin for the full financial year is 
expected to rise to slightly in excess of 22% (2016 - 22.0%). 
 
Land buying and financial position 
 
The land market remains attractive and our land teams continue to identify 
value enhancing opportunities to support the growth strategy in the future. 
Bellway contracted to acquire 11,613 plots (2016 - 9,555) on sites that meet or 
exceed our minimum acquisition criteria in respect of gross margin and return 
on capital employed.  As a result of this investment, all of the land required 
is in place to meet the Board's growth aspirations in respect of the financial 
year ending 31 July 2018. 
 
Notwithstanding significant investment in both land and work in progress, 
Bellway ended the year with net cash of GBP16 million (2016 - GBP26.5 million). 
 
Outlook 
 
At the same time as achieving significant volume growth, the forward sales 
position is strong and the order book at 31 July 2017 rose by 16% to GBP1,296.3 
million (2016 - GBP1,117.1 million), with this representing 4,749 homes (2016 - 
4,644 homes). 
 
Bellway has significant capacity for further volume growth, both from its 
existing divisional structure and as a result of its ability to open new 
divisions in areas of strong demand.  This capacity, together with a strong 
balance sheet, is enabling the Group to continue its disciplined growth 
strategy and deliver further value for shareholders. 
 
* All figures exclude joint venture completions in which the Group has an 
interest. 
 
FOR FURTHER INFORMATION PLEASE CONTACT: 
 
TED AYRES, CHIEF EXECUTIVE AND KEITH ADEY, FINANCE DIRECTOR FROM 7:00 AM 
ONWARDS ON 0191 217 0717. 
 
Certain statements in this announcement are forward-looking statements which 
are based on Bellway p.l.c.'s expectations, intentions and projections 
regarding its future performance, anticipated events or trends and other 
matters that are not historical facts.  Such forward-looking statements can be 
identified by the fact that they do not relate only to historical or current 
facts.  Forward-looking statements sometimes use words such as 'aim', 
'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 
'believe', or other words of similar meaning.  These statements are not 
guarantees of future performance and are subject to known and unknown risks, 
uncertainties and other factors that could cause actual results to differ 
materially from those expressed or implied by such forward-looking statements. 
Given these risks and uncertainties, prospective investors are cautioned not to 
place undue reliance on forward-looking statements.  Forward-looking statements 
speak only as of the date of such statements and, except as required by 
applicable law, Bellway p.l.c. undertakes no obligation to update or revise 
publicly any forward-looking statements, whether as a result of new 
information, future events or otherwise. 
 
 
 
END 
 

(END) Dow Jones Newswires

August 08, 2017 02:00 ET (06:00 GMT)