Bellway Plc, part of The Bellway Group, have issued an Interim Management Statement (IMS) for the period 1 February to 31 May 2012.
The Group reports that the spring selling season demand has “remained resilient”. Visitor levels and reservation rates are outperforming expectations with reservations averaging 122 per week, giving an increase of 9 per cent compared to the same period last year. An increase in Bellway’s average sites from 195 to 210 has also seen private weekly sales increase by 19 per cent.
Shared equity restrictions do not appear to have had an adverse effect on reservations, with only 8 per cent of reservations relating to shared equity.
Bellway has welcomed the Government’s NewBuy Mortgage Indemnity Guarantee scheme and this has seen 90 reservations since its launch 11 weeks ago. The success of NewBuy will depend on mortgage rates, credit scoring and a lender’s approach, says Bellway, who are yet to determine what the incremental effect on sales rates is likely to be.
Bellway’s target of 5 per cent volume growth, set at the start of the financial year, has been secured, subject to build delivery and this has given the Board confidence that year end completions should exceed last year’s figures by around 300 units.
The average sale price of reservations taken since 1 February has increased by 5 per cent, to £190,400, attributed to higher value units exposed to the London market and also a larger proportion of private reservations.
Continued improvements in operating margins will see the Group focusing on cost control and land bank replenishment.
Land teams have remained active in the market, expending £195 million on land and land creditors, agreeing heads of terms on over 4,000 plots.
The Group are assuming that consumer demand and mortgage finance availability will remain unchanged, which will allow the Group to grow geographically and be in a good position to continue its “three pronged strategy of increasing volume, average selling price and operating margin”.
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