Bellway profits 'modestly' ahead

Housebuilder Bellway said its full-year profit will be "modestly" ahead of market views, and reservations rates so far this summer are higher than last year, easing pressure on the battered housing sector.

Bellway said a combination of rising completions in the year and stronger margins would push its headline profit figure ahead of the current market consensus of £62.3m, according to a Thomson Reuters I/B/E/S poll of 16 brokers.

Larger peer Taylor Wimpey reported a forecast-beating rise in margins earlier this week, and its chief executive said only a major external shock would destabilise the market at present.

Bellway echoed this sentiment and said it would further increase its pretax profit, if market conditions remain stable, with a current order book of 2,497 homes.

"Reservation rates throughout the summer months, whilst traditionally a slower selling period, have been ahead of the same period last year," the group said in a statement.

UK housebulders have trimmed the fat of their businesses in recent years and shifted their product mix towards more popular family-sized homes, which is helping to lift frail margins.

Bellway said its second-half operating margin will hit 10 per cent, lifting the annual margin from 6.7 percent to between 8 and 9 per cent.

The homebuilder also announced that its finance director Alistair Leitch will retire at the end of January, to be succeeded by the current group chief accountant Keith Adey.

The number of homes completed in the year to end-July by Bellway rose 7 percent to 4,922, while the average selling price of homes sold also rose 7 percent to £175,000.

Shares in Bellway closed at 629p last night, valuing the group at £804m.