House builder Bellway (BWY) delivered a bumper performance in the year to July, boosting operating profits by almost a third to £151m and rewarding shareholders with a 50 per cent hike in the dividend payout.
Completions rose by over 8 per cent to 5,652 units, and average prices were up 3.4 per cent to £193,025, pushing operating margins ahead from 11.4 per cent to 13.7 per cent. The government’s Help to Buy scheme is clearly helping to drive demand for new homes; Bellway's forward order book has surged by more than half to £679m in the past 12 months. Furthermore, two new divisions have been opened, lifting operational capacity up to at least 7,500 homes.
With the benefit of strong cashflow generation and low borrowings, Bellway has sensibly been investing heavily in the land bank. The company spent £300m on land during the year to boost the total land bank by around 1800 plots to 32,991 plots. A further 4,400 plots are held in the strategic land bank, and terms have been agreed on the purchase of an additional 4,100 plots.
Analysts at Numis Securities have upgraded their forecasts for the next two financial years by 12 and 9 per cent, respectively, to £187m and £214m. On this basis, expect EPS of 119.6p, rising to 140p in 2014/15.
| BELLWAY (BWY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,428p | MARKET VALUE: | £1.74bn | |
| TOUCH: | 1,425-1,428p | 12-MONTH HIGH: | 1,539p | LOW: 933p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 1,001p | NET DEBT: | 2% | |
| Year to 31 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.68 | -36 | -23.9 | 9.00 |
| 2010 | 0.77 | 44 | 29.7 | 10.0 |
| 2011 | 0.89 | 67 | 41.5 | 12.5 |
| 2012 | 1.00 | 105 | 65.5 | 20.0 |
| 2013 | 1.11 | 141 | 89.3 | 30.0 |
| % change | +11 | +34 | +36 | +50 |
Ex-div: 11 Dec Payment: 15 Jan | ||||
