Bellway buoyed by higher sale prices

That said, operating margins dipped from 22.2 per cent to 21.5 per cent, reflecting the slowdown in house price inflation at a time when input costs continued to rise by around 3 per cent. Operating profits were up by 8.7 per cent, but a 14 per cent increase in capital employed meant that the return (on capital employed) was slightly lower at 24.2 per cent.

Completions of social housing grew by 11 per cent to 1,079, while private sales edged by 4 per cent, which lifted total completions to over 5,000. Average selling prices were higher, boosted by a solid performance in London, which accounted for 10 per cent of total completions. Despite all the gloom, average selling prices at its flagship Nine Elms site jumped from £562,000 to £829,000, as the previous period contained social homes, with 95 per cent of the apartments in the scheme either exchanged or completed at prices in line with or above the most recent site appraisal. Completions jumped from 53 to 125 and largely account for the 6.5 per cent increase in average selling prices for all homes sold to £293,832.

Meanwhile, potential buyers continued to show interest, with total reservations net of cancellations up from 178 per week to 183. However, the cancellation rate rose from 11 per cent to 13 per cent, reflecting a moderation in consumer confidence as the Brexit farce drags on.

But trading since the half-year end saw reservations per week ahead by 4.4 per cent from a year earlier at 259, while the forward order book at 10 March stood at £1.48bn, equating to 5,724 homes.

Land acquisition continued but at a slower rate, with 5,980 plots secured against 6,726 a year earlier, all meeting hurdle rates on gross margin and return on capital employed.

Bellway also launched its London partnerships division that will focus on establishing relationships with housing associations and institutional investors with a view to building affordable homes. Together with its new Eastern Counties division, this means that the 22 operating divisions have the capacity to deliver around 13,000 homes a year.

Analysts at Numis are forecasting pre-tax profits of £671m for the year to July 2019 and EPS of 446p, up from £641m and 422p a year earlier.