Bellway PLC has released a trading update for the six months ending on 31 January 2024, providing insights into its performance and market conditions. The company reported housing revenue of over £1.25 billion, in line with expectations, with a total of 4,092 homes completed at an average selling price of £309,300. The private reservation rate increased by 15.4%, and the forward order book at 31 January comprised 3,970 homes, supporting a full-year volume output of around 7,500 homes.
The reduction in mortgage interest rates has led to encouraging levels of customer enquiries, resulting in an improvement in the private reservation rate during January. Bellway is building on the recent recovery in customer demand by opening 34 new outlets in the period and plans to open over 40 additional new outlets in the second half of the financial year. The Group's well-invested and high-quality land bank has enabled a cautious and targeted approach to land buying activity during the period.
Bellway's Group Chief Executive, Jason Honeyman, commented on the company's resilient performance in challenging trading conditions, emphasizing the gradual reduction in mortgage interest rates and the seasonal pick-up in customer leads and reservations since the start of the new calendar year. He highlighted the company's maintained balance sheet resilience and its well-positioned status to capitalize on future growth opportunities.
The trading update also provided insights into market conditions, indicating that affordability steadily improved throughout the period, driven by wage increases, easing consumer price inflation, and a gradual reduction in mortgage interest rates. The private reservation rate increased by 15.4%, and headline pricing remained firm across regions. The company's sales teams continue to use targeted incentives to encourage customer interest and secure reservations.
Despite the higher demand for private housing, the overall reservation rate rose only slightly, partly reflecting a planned reduction in social housing output in financial year 2025 from the current elevated levels. The Group was operating from 246 outlets as of 31 January 2024, having opened 34 new sales outlets in the period, and is on track to open over 40 additional new outlets in the second half of the financial year, supporting its plans for future volume recovery.
In conclusion, Bellway PLC's trading update reflects a resilient performance in the face of challenging trading conditions, with a focus on maintaining balance sheet resilience, capitalizing on growth opportunities, and adapting to market dynamics to support future volume recovery.