Bellway reveals another double-digit dividend hike

Growth rates were broadly comparable between the group’s northern and southern locales, though management highlighted strengthening demand in Yorkshire for “good quality locations”, while activity in the Thames Gateway and Essex continues to provide encouragement. Bellway also has a presence in the high-profile ‘Nine Elms’ development in London’s Battersea in which 72 per cent of the apartments in the group’s scheme (‘The Residence’) have either been exchanged or completed “at prices in line with or above the most recent site appraisal”.

The Nine Elms development is obviously good box office in addition to being commercially viable, but chief operating officer Jason Honeyman stressed that the group continues to focus on higher-margin opportunities, often in ‘brownfield’ sites which don’t attract a high premium. During the period it entered into land contracts to acquire another 11,613 plots – a 22 per cent increase year-on-year – with a 43:57 split between the north and south of the country.

Financial performance was slightly ahead of analyst expectations, with operating profit up 16 per cent to £572m on a 30 basis point increase in the underlying margin. Net cash flow at the operating level was down slightly, but healthy enough at £153m. So healthy, in fact, that management felt able to propose another double-digit dividend increase following on from last year’s bonanza.

Numis gives pre-tax profit of £623m for the July 2018 year-end, leading to EPS of 413p, against £561m and 369p in 2017.