27th Mar 2019 08:15
LONDON (Alliance News) - Residential property developer Bellway PLC on Wednesday reported an improvement in interim profit as the number of homes sold and average prices both rose, leading to an increased payout to shareholders.
However, Bellway, but warned Brexit may threaten the availability of building materials.
In the six months to January 31, Bellway's pretax profit increased 8.7% to GBP313.9 million from GBP288.7 million. Revenue rose 13% to GBP1.49 billion from GBP1.32 billion in the same period a year before.
Chief Executive Jason Honeyman attributed the growth to "favourable market conditions" and "significant" investment in land and work in progress.
At January 31, Bellway's net asset value per share stood at 2,189 pence compared to 1,892p at the same time the year before, a 16% increase.
Bellway declared an interim dividend of 50.4p, 5.0% higher than the 48.0p interim payout for the same period a year before.
"Bellway has delivered another positive set of financial results driven by a strong operational performance. The continuation of our growth strategy has resulted in additional volume output and a further rise in the average selling price," said Chair Paul Hampden Smith.
In the period, Bellway completed 5,007 homes, a 5.6% increase on the 4,741 completions achieved in the first half the year before.
Bellway's average selling price increased 6.5% to GBP293,832 from GBP275,945.
The company's owned and controlled land bank increased 5.7% to 42,261 plots from 39,994 plots.
Looking ahead to the UK's exit from the EU, CEO Honeyman said: "The forthcoming exit from the EU poses some threat to materials availability, however, the group has good forward planning disciplines and has engaged with key suppliers to ensure that there is minimal short term effect on the supply chain."
Bellway said its trading in the first six weeks since February 1 has been "strong", with 259 reservations per week, compared to 248 per week in the same period the year before.
The company's order book at March 10 "remained strong", with a value of GBP1.48 billion compared to GBP1.52 billion at March 11 last year. The order book comprises 5,724 new homes compared to 5,485 homes last year.
Honeyman added: "From a construction perspective, progress on site should enable Bellway to build up to 500 additional new homes this financial year. In addition, disciplined investment in new sales outlets should help to capture customer demand. The board therefore expects Bellway to deliver further growth in completions this year, although the extent of this will depend upon the outcome of the spring selling season."
Shares in Bellway were up 0.1% early Wednesday at 3,004.00 pence.
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