Bellway profits up 70% on London expansion

Housebuilder Bellway has reported interim pre-tax profit up 69% to £40.6m following an expansion of development in London.

Chief executive John Watson said that 18% of sales were now accounted for by the Newcastle-based firm’s four London divisions, a significant rise on previous years. This includes nine apartment schemes in the capital of 390 homes.

Bellway reported turnover up 12.4% to £459m for the six months to January 31 2012, following rises in both the number of sales and the average cost of homes. Watson said 2,455 homes were sold in the period, up 5%, with the average sale price reaching £183k, up nearly 9%, due primarily to a growth in the number of more expensive homes sold in London and the South East.

Watson added that the firm had seen a spike in orders since the start of February, the with the average weekly sales running at 120 homes per week, compared to 89 per week in the previous six months.

Watson said he thought the sales growth was unlikely to be hit by the impending end in the stamp duty holiday for first time buyers buying homes of up to £175k. He said: “I don’t think there’s a big impact on those number from the stamp duty holiday - we saw a similar pick up in numbers last year, albeit that more of the sales then were to housing associations at a cheaper price.”

Since the half-year period, private sale are currently running 16% ahead of the same point last year.

Watson said today’s expected government announcement of planning reforms was unlikely to impact on the business. “Builders aren’t suddenly going to make loads of applications on green field sites they weren’t looking at before - you’re not going to see a wholesale change in the number of planning applications,” he said.