More on Bellway
Bellway: trading statement
Housebuilder Bellway said it had sold 1% more units in the half year to December 2005. The company said sales were 2,958 units at an average selling price of around £168,000, which, according to Bellway, is one of the lowest in the industry.
The company said margins had weakened slightly due to greater spending on sales incentives-to tempt buyers. An increase in buyer confidence has reportedly resulted in sales rates improving. Bellway says almost 80% of its 2005/6 target is secured and is optimistic that strong summer sales should see the company achieving its targets for the year.
A relatively strong order book (at £562m) which the company says is a new record for this time of the year does support some short term optimism.
Bellway has performed well last year; indications are that it will turn in a respectable performance this year as well. However, the wider environment for house builders does seem to be weakening, limiting the prospects for the industry as a whole in the medium term.
The share trades at 1174p, on a prospective PE (2006 earnings) of 8.4x, in line with the sector with a yield of 3%.
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