North East housebuilder Bellway has revealed it is on track to boost its housing revenue to above £3bn in a record year for the company.
In a trading update the Newcastle headquartered housebuilder said it expected its revenue from housebuilding for the year ending 31 July 2019 to grow to £3.2bn, 8% more than the £2.94bn recorded in 2018.
On top of that the company said its number of housing completions had grown by 5.7% to 10,892, smashing last year’s record of 10,307.
Jason Honeyman, chief executive, said: “Bellway has concluded another successful year, further increasing the supply of much needed new homes and delivering a record number of housing completions.
"Quality and customer care remain a priority for the business and this has helped the group achieve recognition as a five-star homebuilder for the third year in succession.
“Trading conditions remain stable and customer confidence is resilient. This, together with a strong forward order book and a healthy balance sheet, ensures that Bellway is well placed to continue its long term growth strategy.”
Bellway added that it expected its profit before tax to come in at around £664m, which is in line with the market’s expectations.
However, the group did warn investors that house price inflation was continuing to wane which tightens profit margins.
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Housebuilders have benefited on a strong demand in recent years, which has been supported by low interest rates and the Government’s Help to Buy scheme.
To take advantage of the strong market Bellway has invested in its sales capability and opened 110 new sales outlets. The figure boosted its net openings by 21, taking its total number of sales sites to 268.
The investment led to the company’s average reservation rate increasing by 5% to £210 per week.
Bellway said it had a strong base going into 2019/2020, with a forward order book of 4,878 homes valued at £1.2bn. The company is also continuing to purchase land so it can develop more properties.
It said: “The land market remains attractive and our land teams continue to identify value enhancing opportunities in accordance with the group’s requirements in respect of both gross margin and return on capital employed.
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“Bellway has contracted to acquire 13,113 plots (2018 – 12,962 plots) across 93 sites (2018 – 100 sites), further strengthening the owned and controlled land bank. As a result, all land is in place, with the benefit of an implementable detailed planning permission, in order to deliver the planned completion forecast for the next financial year.”
Bellway’s full year results will be published on October 15.