Bellway's (BWY) 40 per cent jump in operating profits to £232.5m in the six months to the end of January was impressive. But even more remarkable is that its shares are trading at just 1.5 times expected 2017 net tangible assets, against a sector average of 1.8 times. In response to these figures, analysts at Numis Securities promptly increased their estimates for the year to the end of July 2016 by 6 per cent, giving pre-tax profits of £465m and EPS of 304p. For the following year, these metrics were revised up 10 per cent to £510m and 338p, respectively.
The upbeat assessment has its foundations in another impressive performance that saw the housebuilder push sales ahead by 11.6 per cent to 4,188, while average selling prices jumped 17.3 per cent to £257,280. Predictably, this helped to boost the return on capital employed from 22.8 per cent to 27.6 per cent, while operating margins rose from 19.9 per cent to a record 21.4 per cent, and are expected to approach 22 per cent for the full year.
Some of the increase in selling prices was attributed to more high value apartments being sold in London, and price inflation for the full year is expected to moderate to nearer 10 per cent. Bellway also replenished its land bank, acquiring or gaining planning consent on 5,856 plots, and lifting the consented land bank from 21,411 plots to 23,079.
Trading in the second half of the financial year has started on a strong note, with the forward order book up by 7.2 per cent at £1.2bn, representing 5,048 homes; that's up from 4,794 a year earlier. Average reservations from 1 February to 13 March increased by more than a third from a year earlier to 209 per week, boosted by the release of three London developments.
| BELLWAY (BWY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,553p | MARKET VALUE: | £3.13bn | |
| TOUCH: | 2,551-2,554p | 12-MONTH HIGH: | 2,881p | LOW: 1,903p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 1,381p | NET DEBT: | 3% | |
| Half-yearto 31 Jan | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 0.83 | 159 | 104 | 25 |
| 2016 | 1.08 | 227 | 149 | 34 |
| % change | +30 | +43 | +44 | +36 |
Ex-div: 19 May Payment: 1 Jul | ||||
