Bellway reported a strong order book this morning as it continues to chase volume.
Reporting on the period from 1 August to 30 November 2011, the firm said it is continuing its strategy of increasing volumes, raising average selling prices through changes in mix - with family housing becoming more prevalent - and achieving margin growth.
The order book at 30 November was £458 million, compared with £440m last year, and Bellway has secured 73 per cent of its current annual target.
The firm said it has continued to deliver its strategy despite ongoing concerns over financial markets and their implications for the UK economy.
It added: “The government continues in its attempts to stimulate the housing market and is looking to address some of the issues surrounding higher loan to value mortgage lending, albeit the detail and mechanics of their recent proposals are yet to be determined.
“Whilst the group welcomes such initiatives, the outcome for the full year will be dependent primarily upon consumer confidence, especially during the spring selling season.”
The average selling price increased by almost 7 per cent. Bellway reported 1,400 plots for the period, after spending £71m on land and incurring debt of £17m. The number of trading outlets is expected to increase to around 215 in early 2012.
Completions for the six months ending 31 January 2012 are expected to increase by around 5 per cent. Operating margin will be at least in line with H2 2010, just under 10 per cent.
The house builder noted that shared equity has reduced to less than 5 per cent of reservations in the period compared to 10 per cent last year, while part exchange of customers’ existing homes is used in an increasing number of transactions.
The company said it has renewed a £150m banking facility with Lloyds Bank Corporate Markets, with no significant changes to banking covenants. Bellway now has combined facilities of £300m to November 2016.