Bellway PLC has released a trading update for the period from 1 February to 2 June 2024, highlighting a robust performance during the spring selling season. The company reported improved affordability, leading to increased customer confidence and reservation rates compared to the first half of the financial year. The private reservation rate per outlet per week increased by 6.9% compared to the prior year, supported by a higher number of outlets.
The forward order book has also seen growth, increasing from the start of the current financial year to 5,346 homes. Bellway remains on track to deliver a full-year volume output of around 7,500 homes and expects a reduction in the underlying operating margin of at least 600 basis points from the prior year. The overall average selling price is anticipated to be around £305,000, with the company being fully sold for the current financial year.
The Group's Chief Executive, Jason Honeyman, expressed confidence in the company's performance, stating, "Bellway has delivered a solid trading performance supported by improved affordability and a seasonal uplift through the spring, and we remain on track to deliver full year volume output of around 7,500 homes."
The trading update also highlighted the company's strong position for future growth, with healthy levels of customer interest and a strong outlet opening program contributing to a year-on-year increase in the forward order book at 31 July 2024. Bellway is well-positioned to return to growth in financial year 2025.
The update also provided insights into the market and current trading, indicating robust trading through the spring selling season, with sustained improvement in private reservations. The company noted that the overall reservation rate rose slightly, reflecting the expected reduction in social housing output in financial year 2025 from the current elevated levels.
Bellway also highlighted good levels of building material and subcontractor availability across the Group, with limited overall cost inflation on new tenders. The company's land investment strategy was also discussed, emphasizing ongoing disciplined and targeted land acquisition, which has enhanced their longer-term growth prospects and overall land supply.
In conclusion, Bellway PLC's trading update reflects a strong performance during the spring selling season, with improved affordability and increased customer confidence driving growth in reservation rates and the forward order book. The company's strategic land investment and strong position for future growth indicate a positive outlook for financial year 2025.