Bellway PLC has released its Trading Update for the year ended 31 July 2024, providing insights into its financial performance and market conditions. The company reported total housing completions of 7,654 homes, with an average selling price of around £308,000, slightly ahead of previous guidance. Despite a challenging operating environment, Bellway achieved housing revenue of over £2.35 billion and expects an underlying operating margin of around 10%. The company's strong balance sheet, with modest year-end net debt, and a healthy forward order book position it for volume growth in financial year 2025 and beyond.
The private reservation rate per outlet per week increased by 10.9% compared to the prior year, driven by stronger demand and an increase in outlet numbers. Bellway's sustainability efforts were recognized through industry awards, and the company retained its status as a five-star homebuilder for the eighth consecutive year. Jason Honeyman, Group Chief Executive, expressed confidence in the company's ability to capitalize on future growth opportunities, citing the positive long-term housing market fundamentals and the government's plans to increase the supply of new homes and reform the planning system.
Market and current trading conditions showed improvement, with customer confidence driven by a moderation in mortgage interest rates, consumer price inflation, and an increase in wages. The reduction in the cancellation rate and stability in headline pricing and targeted incentives across regions were noted. The private reservation rate per outlet per week increased by 10.9%, and the overall reservation rate, including social homes, rose by 3.2%. Bellway traded from an average of 245 outlets during the year, with a closing position of 250 outlets at 31 July 2024, driven by the strength of its land bank and targeted approach to land acquisition.
The company's forward order book at 31 July 2024 increased to 5,144 homes, with a value of £1,412.9 million, primarily driven by the higher level of private reservations. Bellway's positive outlook for financial year 2025 is supported by the improving trading backdrop, the strength of its outlet opening program, and the healthy growth in the year-end order book. The company remains encouraged by the new government's plans to increase the supply of new homes and the long-term positive housing market fundamentals, expressing confidence in its robust balance sheet and operational strength to capitalize on future growth opportunities.