17th Apr 2007 07:01
Bellway PLC17 April 2007 NATIONAL HOUSEBUILDER BELLWAY p.l.c. TODAY, TUESDAY 17 APRIL, ANNOUNCE THEIRINTERIM RESULTS FOR THE HALF YEAR ENDED 31 JANUARY 2007. HIGHLIGHTS Half Year Ended 31 January 2007 2006• Homes sold 3,264 2,958 +10.3%• Average selling price £173.3k £166.6k +4.0%• Turnover £576.5m £507.5m +13.6%• Operating profit £107.8m £96.2m +12.1%• Operating margin 18.7% 19.0%• Profit before taxation £100.8m £87.8m +14.8%• Basic earnings per ordinary share 61.7p 54.1p +14.0%• Dividend per ordinary share 16.45p 14.3p +15.0%• Land bank - plots with planning permission 22,500 23,000• Total equity £953.6m £820.7m +16.2%• Net asset value per ordinary share 833p 722p +15.4%• Return on average capital employed 22.6% 23.2% CHAIRMAN, HOWARD DAWE SAID "IN A STABLE BUT COMPETITIVE HOUSING MARKET, BELLWAYHAS SHOWN AGAIN HOW WELL IT CAN PERFORM IN SUCH AN ENVIRONMENT". FURTHERMORE "I AM DELIGHTED TO REPORT THAT BELLWAY'S PROFIT BEFORE TAX FOR THISPERIOD IS A NEW RECORD OF £100.8 MILLION, A LANDMARK FIGURE.....". HE ADDED "THE BOARD IS PLEASED TO CONTINUE ITS PROGRESSIVE DIVIDEND POLICY BYANNOUNCING AN INCREASE IN THE INTERIM DIVIDEND OF 15%......". HE CONCLUDED "OUR OBJECTIVE IS TO REMAIN FOCUSED ON THE DELIVERY OF LOWER VALUEHOUSING£.." AND THAT "THE BOARD BELIEVES ITS PROVEN OPERATIONAL MODEL WILLCONTINUE TO DELIVER GROWTH FOR SHAREHOLDERS WELL INTO THE FUTURE". FOR FURTHER INFORMATION, PLEASE CONTACT JOHN WATSON, CHIEF EXECUTIVE OR ALISTAIRLEITCH, FINANCE DIRECTOR TUESDAY 17 APRIL - THURSDAY 19 APRILJ WATSON: 07855 337007A LEITCH: 07855 337001THEREAFTER: 0191 217 0717 CHAIRMAN'S STATEMENT In a stable but competitive housing market, Bellway has shown again how well itcan perform in such an environment. In the six months ended 31 January 2007 theGroup has delivered volume growth in excess of 10%, operating profits haveincreased by over 12% and earnings per share has risen by 14%. Results The number of homes completed increased from 2,958 to 3,264 in the six monthperiod and the average sales price of these homes increased by 4% from £166,600to £173,300. These sales produced turnover of £565.6 million and when combinedwith sundry income of £10.9 million increased the Group's overall turnover bymore than 13% to £576.5 million. In this incentive led and competitive market,we are pleased to report an operating margin of 18.7%, compared to 19.0% lastyear which resulted in an operating profit of £107.8 million, an increase of12.1% compared to 2006. Net financing costs have fallen to £6.9 million from£8.4 million and are covered over 15 times whilst gearing remains low at justunder 20%. I am delighted to report that Bellway's profit before tax for thisperiod is a new record of £100.8 million, a landmark figure and earnings pershare is also at record levels for the period, advancing 14% from 54.1p to61.7p. Dividend The Board is pleased to continue its progressive dividend policy by announcingan increase in the interim dividend of 15%, from 14.3p to 16.45p. The interimdividend will be paid on Monday 2 July to ordinary shareholders on the Company'sRegister of Members at the close of business on Friday 8 June 2007. Theex-dividend date is Wednesday 6 June 2007. Trading Bellway has, for many years, benefited from a policy of forward selling and I ampleased to report that the Group's forward order book at the end of March was£732 million, the strongest ever and when aggregated with completions to date,results in over 95% of this year's increased target for home completions havingnow been secured. The market generally remains competitive and incentives are still required toconclude most transactions. These incentives are not so evident in North EastEngland, North London, Scotland and Thames Gateway. Bellway is finding thatdemand for its homes is stronger below £250,000, especially around London andwithin the Thames Gateway corridor. The Group currently does not have as manyoutlets as it would like in these two areas, however, it is hopeful ofincreasing availability by the end of 2007. In Scotland the market remainsstrong and the Group continues to invest in significant land opportunities. Elsewhere, our regeneration business is making good progress in Birmingham,Liverpool and Middlesbrough and I am pleased to announce that Leeds City Councilhas recently selected Bellway as its strategic partner to regenerate large areasof East and South East Leeds. A planning application for the first 750 newhomes has recently been submitted. The Group's land holding at Barking is aboutto receive an outline planning permission for 10,800 homes of which Bellway hasthe exclusive right to develop 50% of the units with the balance of land soldvia a joint venture company with English Partnerships. The Group has grown its owned or controlled land bank to around 40,000 plots.In addition, there are in excess of 5,000 plots, typically on regenerationsites, where Bellway is the preferred partner but does not, as yet, have thenecessary planning permission to commence development. CHAIRMAN'S STATEMENT (continued) People The Board is extremely grateful to its employees, sub-contractors, suppliers andpartners, without whose continuing support and contribution these results wouldnot be possible. Future Prospects Over the last decade, Bellway has consistently delivered volume and earningsgrowth in both buoyant and competitive markets. To grow earnings in thiscurrent market, the Group intends to increase the number of divisions andoutlets. Our objective is to remain focused on the delivery of lower valuehousing and to increase shareholder value through extending our enviable trackrecord in what is likely to remain a challenging market place. The Boardbelieves its proven operational model will continue to deliver growth forshareholders well into the future. H C DaweChairman 16 April 2007 CONSOLIDATED INCOME STATEMENT Half year Half year Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 £m £m £m Revenue 576.5 507.5 1,240.2 Cost of sales (439.7) (384.1) (947.9) Gross profit 136.8 123.4 292.3 Administrative expenses (29.0) (27.2) (52.9) Operating profit 107.8 96.2 239.4 Finance income 2.1 1.2 2.9Finance expenses (9.0) (9.6) (21.3) Share of loss of associates (0.1) - (0.3) Profit before taxation 100.8 87.8 220.7 Income tax expense (30.5) (26.6) (65.0) Profit for the period 70.3 61.2 155.7 Earnings per ordinary share - Basic 61.7p 54.1p 137.5p - Diluted 61.0p 53.6p 136.2p Dividend per ordinary share 16.45p 14.3p 34.5p Consolidated Statement of Recognised Income and Expense Half year Half year Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 £m £m £m Actuarial gain / (loss) on defined benefit pension scheme 1.6 (4.8) (2.2) Tax on items taken directly to equity (0.5) 1.4 0.7 Net income / (expense) recognised directly in equity 1.1 (3.4) (1.5) Profit for the period 70.3 61.2 155.7 Total recognised income for the period 71.4 57.8 154.2 CONSOLIDATED BALANCE SHEET At At At 31 January 31 January 31 July 2007 2006 2006 £m £m £mASSETSNon-current assetsProperty, plant and equipment 13.3 18.5 13.8Investment property 1.7 3.0 1.7Investments in associates - - -Other receivables 8.2 7.9 5.7Deferred tax assets 8.3 14.6 10.2 31.5 44.0 31.4Current assetsInventories 1,519.6 1,433.1 1,434.0Trade and other receivables 40.0 54.8 26.5Cash and cash equivalents 9.5 9.0 2.3 1,569.1 1,496.9 1,462.8 Total assets 1,600.6 1,540.9 1,494.2 LIABILITIESNon-current liabilitiesInterest bearing loans and borrowings (154.0) (256.0) (159.0)Retirement benefit obligations (5.3) (17.2) (11.7)Other payables (35.6) (28.4) (24.0) (194.9) (301.6) (194.7)Current LiabilitiesInterest bearing loans and borrowings (44.2) (48.9) (17.0)Trade and other payables (382.5) (342.3) (350.0)Current tax liabilities (25.4) (27.4) (29.0) (452.1) (418.6) (396.0) Total liabilities (647.0) (720.2) (590.7) Net assets 953.6 820.7 903.5 EQUITYIssued capital 14.3 14.2 14.3Share premium 114.3 110.5 111.9Other reserves 1.5 1.5 1.5Retained earnings 823.6 694.6 775.9Total equity attributable to equity holders of the parent 953.7 820.8 903.6 Minority interest (0.1) (0.1) (0.1) Total equity 953.6 820.7 903.5 CONSOLIDATED CASH FLOW STATEMENT Half year Half year Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 £m £m £mCash flows from operating activitiesProfit for the period 70.3 61.2 155.7 Depreciation charge 1.5 1.5 3.1Profit on sale of property, plant and equipment (0.2) - (1.2)Finance income (2.1) (1.2) (2.9)Finance expenses 9.0 9.6 21.3Share based payment charge 1.3 1.1 2.6Income tax expense 30.5 26.6 65.0Increase in inventories (85.6) (120.5) (150.8)(Increase) / decrease in trade and other receivables (15.4) (23.6) 6.9Increase in trade and other payables 36.3 4.4 32.3 Cash from operations 45.6 (40.9) 132.0 Interest paid (6.4) (8.1) (17.9)Income tax paid (33.1) (32.1) (65.2) Net cash inflow / (outflow) from operating activities 6.1 (81.1) 48.9 Cash flows from investing activitiesAcquisition of property, plant and equipment (1.8) (2.9) (4.8)Acquisition of investment property - (3.0) (1.7)Proceeds from sale of property, plant and equipment 1.0 0.5 6.7Interest received 1.5 1.2 3.0 Net cash inflow / (outflow) from investing activities 0.7 (4.2) 3.2 Cash flows from financing activitiesIncrease / (decrease) in bank borrowings 20.0 45.0 (97.0)Proceeds from the issue of share capital on exercise of 2.8 1.6 3.1share optionsPurchase of own shares by employee share option plans (1.5) (0.1) (0.4)Dividends paid (23.0) (20.5) (36.9) Net cash (outflow) / inflow from financing activities (1.7) 26.0 (131.2) Net increase / (decrease) in cash and cash equivalents 5.1 (59.3) (79.1) Cash and cash equivalents at beginning of period (12.7) 66.4 66.4 Cash and cash equivalents at end of period (7.6) 7.1 (12.7) NOTES 1 Basis of preparation The interim financial information has been prepared on the basis of theaccounting policies adopted in the Group's statutory financial statements forthe year ended 31 July 2006. These policies are set out in the Group's AnnualReport and Accounts 2006. 2 Status of financial information The interim information for the half years ended 31 January 2007 and 31 January2006 has not been audited nor reviewed by the auditors. The information for the year ended 31 July 2006 does not constitute statutoryfinancial statements as defined in section 240 of the Companies Act 1985. Thosefinancial statements have been reported on by the Group's auditors and deliveredto the Registrar of Companies. The report of the auditors was unqualified anddid not contain statements under section 237(2) or (3) of the Companies Act1985. 3 Taxation The taxation charge for the half years ended 31 January 2007 and 31 January 2006is calculated by applying the Director's best estimate of the annual effectivetax rate to the profit for the period. 4 Dividends Half year Half year Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 £m £m £mFinal dividend for the year ended 31 July 2006 of20.2p per share (2005 - 18.25p) 23.1 20.7 20.7 Interim dividend for the year ended 31 July 2006 of14.3p per share 16.2 23.1 20.7 36.9 Proposed interim dividend for the year ending 31 July2007 of 16.45p per share (2006 - 14.3p) 18.9 16.2 The proposed interim dividend was approved by the Board of Directors on 16 April2007 and has not been included as a liability at the balance sheet date. NOTES (continued) 5 Consolidated statement of changes in equity Half year Half year Year ended ended ended 31 January 31 January 31 July 2007 2006 2006 £m £m £m Total recognised income and expense 71.4 57.8 154.2Dividends on equity shares (23.1) (20.7) (36.9)Shares issued 2.4 1.6 3.1Charge in relation to share options and tax thereon 0.9 2.3 3.7Exercise of share options / share awards (1.5) (0.1) (0.4) Net increase in total equity 50.1 40.9 123.7 Total equity at the start of the period 903.5 779.8 779.8 Total equity at the end of the period 953.6 820.7 903.5 6 Interim report The interim accounts were approved by the Board of Directors on 16 April 2007and copies are being posted to all shareholders. Further copies are available onapplication to the Company Secretary, Bellway plc, Seaton Burn House, DudleyLane, Seaton Burn, Newcastle upon Tyne, NE13 6BE and are also available on ourwebsite at www.bellway.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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