26th Mar 2014 08:11
LONDON (Alliance News) - Housebuilder Bellway PLC Wednesday said its profit almost doubled in the first half of its financial year, as it took advantage of recovery in the UK housing market.
The company posted pretax profit of GBP103.8 million for the six months ended January 31, up from GBP59.9 million, as revenue rose to GBP701.1 million from GBP502.5 million a year earlier.
Bellway said it "has responded to the strengthening market conditions across all regions by increasing the number of homes under construction to accommodate additional consumer demand".
The firm said this approach enabled it to complete the sale of 3,235 new homes, up 25% from the 2,597 a year earlier.
Bellway said it has maintained a "significant presence" in London and has benefited from ongoing land investment, particularly in the south of country. As a consequence, the proportion of housing revenue generated from the group's eight southern divisions increased to 62% compared with 58% in the same period last year.
The average selling price of its properties also rose 13% to GBP212,071 from GBP187,426.
New divisions, opened in Manchester and the Thames Valley in August last year, have performed well, the firm said, contributing 62 legal completions in the period. In addition, it said its land bank now consists of 34,057 plots up from 32,991 plots in July.
Bellway said its gross margin has increased to 19.8% from 17.9% and this improvement, together with increased operational efficiencies and strong cost control over the administrative overhead base, has resulted in an operating margin of 15.6% compared with 12.8% in 2013.
Looking ahead, the company said its order book is significantly ahead, having grown in value by 63.5% to GBP829.5 million at March 9, compared with GBP507.4 million at March 10, representing 3,944 homes up from 2,746 homes.
"As a result of this strong start to the spring selling season, the board now expects that the group will deliver volume growth of up to 20% in the current financial year," it said.
The interim dividend was increased 78% to 16.0 pence per share up from 9.0 pence a year earlier.
Bellway shares were up 4.4% at 1,677.20p at the open Wednesday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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