Bellway sales on target with margins improving

Housebuilder Bellway says it is on target to hit sales figures, with margin growth that should deliver an operating margin of around 13 per cent for the full year.

In the interim management statement, covering the 18 weeks from August 1st to November 30th, Bellway said: "The group has achieved 3,951 (2011 - 3,748) sales for the current financial year, representing 72% of its current annual target. The company expects legal completions to increase by around 5% for the six months ending January 31st 2013 and expects that the operating margin for the same period will slightly exceed the 12.5% achieved in the second half of the previous financial year."

When pressed by Sharecast, Chief Executive John Watson said: "The operating margin last year was 11.4%. For the full year we are guiding to a 13% operating profit as we attempt to move towards a more normalised operating margin of 15%."

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He added that although market conditions remain unchanged,with consumer confidence still at last year's depressed levels, the continuing ability of first-time buyers to access higher loan to value mortgage finance via the NewBuy scheme had helped reservations (net of cancellations) to increase 6%, compared with the prior year.

The average selling price of reservations, net of sales incentives, increased by 4% to £195,800, reflecting continuing changes in product mix. The group's land teams have also been active, resulting in expenditure of £91m on land and land creditors and modest net bank debt of £77m at November 30th.

The Chairman will make a brief statement at the Annual General Meeting on January 11th 2013 and a trading update for the six months ending January 31st 2013 will be issued on February 7th 2013.

Consensus estimates for the full year ending July 31st 2013 are for pre-tax profits of £124.67m on turnover of about £1bn.

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