20th Oct 2020 10:07
(Alliance News) - Bellway PLC on Tuesday posted a dive in earnings for financial 2020, driven by Covid-19 disruption, but announced a resumption of dividend payments, albeit with a significant reduction from the year prior.
Shares in the FTSE 250 housebuilder were trading 0.2% higher at 2,630.00 pence each on Tuesday morning in London.
For its financial year ended July 31, Bellway posted pretax profit of GBP236.7 million, down 64% year-on-year from GBP662.6 million. This was as revenue fell 31% to GBP2.23 billion from GBP3.21 billion.
The company noted its number of housing completions plunged 31% to 7,522 during a year which was hit by the Covid-19 lockdown, bringing the housing sector to a halt.
An exceptional Covid-19 related expense of GBP25.8 million was recognised, comprising site-based costs of GBP14.5 million, arising from the interruption to construction activity during the lockdown, together with impairment costs of GBP9.9 million on aborted land deals.
Bellway resumed dividend payments, having skipped an interim payout, offering a 50.0p final dividend, down from 100.00p the year before. This left its full-year dividend down 67% to 50.0 pence per share from 150.4p, but the housebuilder promised to increase payouts over time as its earnings recover.
Looking ahead, the Newcastle Upon Tyne-based company said it has seen an "encouragingly strong start to trading in the new financial year", with house reservations up 31% to 239 per week. It added that productivity - currently running at 85% to 90% of output achieved in financial 2019 - is continuing to improve, noting that as a result, sales completions should total around 9,000 in financial 2021 barring any further lockdown.
The forward order book as at October 4 was GBP1.87 billion, up 43% from GBP1.31 billion the year prior.
"Despite these challenging times, Bellway is in a robust position, with a motivated and dedicated workforce. It benefits from a strong, ungeared balance sheet, a record order book and has the capability to respond to evolving market conditions. Our underlying operational strength and focus on quality, together with a conservative and responsible approach to managing the business, will serve the group well over the longer-term," said Chair Paul Smith
As at July-end, Bellway had cash of GBP51.4 million, down from GBP201.2 million at July 31, 2019.
By Ife Taiwo; [email protected]
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