We all had a pretty good idea of how well Bellway (BWY) performed in the year to July from a trading statement released in August, but profits were still ahead of analyst estimates and shareholders have been rewarded with a hefty hike in the dividend. Our short-term trading buy tip has also paid off (941p, 14 September 2012), but even after the pre-results run-up, the shares are still worth holding on to.
In the 12-month trading period, average selling prices rose 6.3 per cent to a record £186,648, driven mainly by the group's southern housing division - which accounts for nearly two-thirds of group turnover - and an additional 500 private sector completions compared to the prior year. This segment now accounts for 4,358 of the 5,226 total completions. All of these factors, and greater use of cheaper land acquired after the economic downturn, helped to drive operating margins up from 8.5 per cent to 11.4 per cent, reaching 12.5 per cent in the second half. Bellway also topped up its consented land bank, purchasing 2,304 plots and achieving consent on 2,472 plots already owned.
Numis is maintaining its current year pre-tax profit and EPS estimates of £125m of 77.7p.
| BELLWAY (BWY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 998p | MARKET VALUE: | £1.21bn | |
| TOUCH: | 997-998p | 12-MONTH HIGH: | 1,010p | LOW: 656p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 933p | NET DEBT: | 5% | |
| Year to 31 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.15 | 34.8 | 23.6 | 24.1 |
| 2009 | 0.68 | -36.6 | -23.9 | 9.0 |
| 2010 | 0.77 | 44.4 | 29.7 | 10.0 |
| 2011 | 0.89 | 67.2 | 41.5 | 12.5 |
| 2012 | 1.00 | 105 | 65.5 | 20.0 |
| % change | +13 | +57 | +58 | +60 |
Ex-div: 12 Dec Payment: 16 Jan | ||||
