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Housebuilder Bellway (BWY) is the biggest gainer this morning, helping bigger peers (BDEV, TW, PSN) to the top of the UK 100 . This comes after a trading statement highlighting strong sales, upgraded guidance and soothing rhetoric about robust demand for new homes across all regions despite political uncertainty.
Reservations +13% Feb through June allows management to upgrade FY 16/17 completions guidance to nearer 10% and financial discipline (costs, balance sheet) should help deliver at least some margin expansion on top of last year’s record. Total orders +8.8% (o/w 70% already contracted; reservations +6.4%) puts the group in a strong position to grow further in FY 17/18.
Snaggers are sure to point at an unchanged £260K average selling price but higher value locations should help this next year, especially as all land needed to hit next year’s target has already been acquired (+19.2%).
BWY shares are back challenging the 3000p mark and all-time highs posted back in May. Today’s gains extend last week’s bounce and add yet more positive technical signals. The shares remain within a rising channel going back to late last summer which could yet usher them to 3100p or better.
Mike van Dulken, Head of Research, 14 Jun
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