Bellway rings in profits as it sees revival signs

By This Is Money
Updated: 07:58 EDT, 30 March 2011

Homebuilder Bellway enjoyed a 26% jump in first-half profits and said it was well positioned to increase returns as the traditional spring market strengthens.

Good work: It completed sales of 2,332 homes during the period

The UK's fifth largest housebuilder by market value, it posted a pretax profit of £24m for the six months to the end of January, up from £19m in the same period a year earlier.

Housebuilders have been gearing up for a tough year as public spending cuts and weaker consumer confidence test the market, although Bellway said in January it had seen signs of a revival after encouraging sales.

It completed sales of 2,332 homes during the period, an increase of almost 4%, and upped its interim dividend by 12.1% to 3.7p from 3.3p in 2010.

'Visitors and reservations have returned to the pattern of a traditional spring market' but 'consumer confidence remains fragile,' Bellway's chairman Howard Dawe said in a statement.

He added that Bellway was 'well positioned to deliver increasing returns,' through a combination of rising volumes, growing average sales prices and improving margins.

Mortgage approvals, which rose slightly in February, are still running at around half their long-run average with most economists expecting the housing market to remain subdued for the rest of the year.

Shares in the company closed at 682p on Tuesday, down 11% on a year ago, valuing the business at around £838m.