‘Controlled expansion’ key for housebuilder as profits rise

Bellway sites include major Perth development

Housebuilder Bellway has posted a healthy rise in half-year profits.

The group – which is investing millions in its major Charlotte Gate development near Broxden, Perth, which is due to launch next month – saw pre-tax profits rise 9.3% to £247.6 million in the six months ended January 31, while revenue was up 5.9% to £1.1 billion.

Completions increased 6.5% to a record 4,462 in the period, with the average selling price of its homes expected to rise to around £260,000 in 2017, up from £252,000 last year.

The firm also has a 55-home development – Birchwood – at Cowdenbeath.

CEO Ted Ayres said demand for homes remained strong, helped by high employment rates, mortgage availability and the assistance available through the Government’s Help to Buy scheme.

“With such strong demand, the wider economic uncertainty following the EU referendum has not had any meaningful effect on purchasers’ willingness to acquire a Bellway property in those parts of the country where the group operates,” Mr Ayres said.

Bellway expects to sell at least 5% more homes this financial year than last.

Chairman John Watson said the group increased earnings by more than 10% in the first half of the year – a group record – and the business would continue to grow in a “controlled” manner.

“Bellway is achieving this growth whilst retaining a focus on return on capital employed, and maintaining an appropriate and conservative use of bank debt and land creditors,” he said.

“Our strong balance sheet and operational capacity still provides scope for further controlled expansion, enabling Bellway to achieve additional, future volume and earnings growth, by continuing to invest in attractive land opportunities across the country.”

The Bellway Homes site near Broxden. The housebuilder has posted a healthy rise in half-year profits.