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Here’s 1 top UK stock I believe is primed for huge growth!

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I believe Bellway (LSE:BWY) is one top UK stock primed for growth. Should I buy shares for my portfolio?

Home building and sales on the up

Bellway is a residential property developer and house builder based in Newcastle upon Tyne. The UK house building and sales sector is profiting from tailwinds right now. According to HM Revenues and Customs, the number of home sales in the UK surged to a record 213,120 in June alone.

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Bellway has recently reported results that show it is capitalising on this and its share price has seen a boost too. As I write, Bellway shares are trading for 3,308p per share. This time last year, shares were trading for 2,456p per share. That equates to a 34% increase. In the calendar year to date, Bellway’s share price has increased by 13% from 2,914p to current levels. 

Trading update

Bellway today released a trading update for the year ended 31 July 2021 ahead of preliminary full-year results due in October. I believe it showed a resurgence in the housing market and the fact Bellway has capitalised well on this.

Bellway reported strong recovery in housing revenue which rose by over 40% to more than £3.1bn. This was only 2.% below the level achieved in 2019, which is impressive considering this period was pre-pandemic. The number of housing completions rose by close to 35%.

Bellway pointed to good underlying demand across the country with a private reservation rate of 169 per week which is an increase on 2020 and 2019 levels. In addition, Bellway strengthened its balance sheet with net cash of £330m. Finally, it confirmed a record forward sales position with an order book of 7,082 homes, which is an increase on 2020 and 2019 levels.

I believe such a strong trading update is why Bellway is primed for excellent growth, especially the forward sales position. As the economy continues to recover, I believe Bellway could continue its growth journey too.

Top UK stocks have risks too

I have two primary concerns with Bellway. First, since the pandemic, the cost of raw materials has increased, affecting house builders. This rise in cost could affect its sales figures and profit levels and in turn its investment viability and growth journey in my opinion. Next, I believe a new variant of the virus or rising case leading to further restrictions could hinder Bellway’s progress and growth by affecting its building sites. This again would affect its bottom line.

Overall, I do believe Bellway is a top UK stock and is primed for growth. I must admit it is not the biggest player in its respective market. I prefer to focus on its performance and track record, which are good. In addition to that, it operates in a sector that is experiencing burgeoning demand and people will always need homes to live in. I would happily add shares to my portfolio just now.

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Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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