Shares in housebuilder Bellway ticked lower in early deals this morning after the company reported a fall in profit for the six months to the end of January.
Profit before tax tumbled by 57 per cent on a year-on year-basis to £134m as buyers put off purchases due to higher interest rates and uncertainty.
The Newcastle-based business also completed fewer homes during the period. It built 4,092 homes compared to 5,695 homes in the six months to the end of January 2022. Revenue slid by 29.6 per cent to £1.2bn.
However, despite the fall in revenue said sales and interest have been picking up over the past few weeks. Sales to private buyers have increased 20.7 per cent since the start of February compared to the same period last year.
Bellway said it plans to deliver 7,500 homes in the current fiscal year, down from 10,945 last year.
Jason Honeyman, group chief executive, said: “The group remains on track to deliver volume output of around 7,500 homes in the full financial year and, if market conditions remain stable, we are well-placed to build the order book through the second half which will serve as a platform for a return to growth in financial year 2025.
“Overall, the long-term fundamentals of the UK housebuilding industry remain attractive, given the shortage of energy efficient and affordable homes across the country.”
He added: “We remain confident that the group’s robust balance sheet and operational strength, combined with the depth and quality of our land bank, will enable Bellway to successfully navigate changing market conditions and capitalise on future growth opportunities.”
Analysts at Jefferies rated the stock a ‘Buy’ this morning.
They said: “As we near the end of the spring selling season and ahead of a general election expected in 2H24, we anticipate a slowing summer.
“However, with its strong land bank providing, we believe, some of the best potential to leverage into any recovery in the housing market, Bellway remains our top pick in the sector.”