Bellway FY profit and revenue grow amid solid demand

FTSE 250 housebuilder Bellway reported a rise in full-year profit as it lifted its dividend and said demand has remained solid despite the Brexit vote.

In the year to the end of July, pre-tax profit rose 40.6% to £497.9m on revenue of £2.24bn, up from £1.77bn. Earnings per share increased to 328.7p from 231.5p the year before.

The number of homes sold rose by 12.5% to 8,721, which was a new record and the group’s seventh successive year of volume growth. Meanwhile, the average selling price was up 12.9% to £252,793.

The company lifted its total dividend per share to 108p from 77p the year before.

Bellway said demand for new homes remained robust throughout the year, with an average of 169 reservations per week, up 10% compared to last year. In addition, it said interest in new sites has been encouraging, with overall visitor numbers ahead of the prior financial year, while 'hits' to the company’s website continued to grow.

The group said that although the Brexit vote has cast some uncertainty with regards to the wider economic outlook, reservations net of cancellations since the referendum until the end of July were 13% higher than the same period a year ago.

Bellway said the Bank of England's monetary policy response should help to maintain the favourable conditions in which customers are able to purchase a new home.

It also said the Help to Buy scheme remains an important government stimulus and has been used in 32% of reservations, up from 27% in 2015.

Chairman John Watson said: “The long term outlook continues to be positive, supported by strong customer demand, a substantial forward order book and favourable trading conditions across all areas of the country where Bellway operates.

“Whilst there is some uncertainty following the result of the EU referendum, trading since that date has remained resilient. Bellway has invested significantly in high quality land opportunities and infrastructure over recent years. As a result, with its strong balance sheet and structure of nineteen operating divisions, the group is well placed to deliver additional value for shareholders through further disciplined volume growth in the current financial year."

Brokerage Numis said the results were strong and slightly above its estimates.

“Overall, this is yet another solid set of results from Bellway and we think that 2017 estimates are looking well underpinned. We remain of the view that Bellway remains one of the best placed housebuilders in the sector given its product positioning, its prudent balance sheet and management’s track record in under-promising and over-delivering,” it said.

At 0900 BST, Bellway shares were up 1.8% to 2,290p.