Bellway hikes dividend as interim profit jumps

Bellway reported a big jump in interim pre-tax profit as revenue grew and the FTSE 250 housebuilder hiked its dividend.

In the six months to the end of January, pre-tax profit rose 42.6% to £226.6m on revenue of £1.08bn, up 30.5% from 2015.

Earnings per share came in at 148.7p from 103.5p in the same period a year ago and the company lifted its interim dividend 36% to 34p per share.

During the period, the number of homes sold was up 11.6% to 4,188 compared with 3,754 the year before, while the average selling price increased 17.3% to £257,280.

Bellway’s order book, meanwhile, was up 7.2% to £1.2bn at 13 March amid strong customer demand, assisted by ongoing government support such as the Help to Buy scheme.

Chairman John Watson said: “Bellway's strategy for growth is helping to deliver much needed new homes, whilst delivering sustainable returns for shareholders.

"I am therefore pleased to report another record set of results as the group takes advantage of the positive market conditions to deliver further volume growth. The rise in output, together with an additional increase in both average selling price and operating margin, has resulted in significant earnings growth and a further improvement in return on capital employed.”

Bellway said the outlook was positive and housing completions for the full year are expected to increase by at least 10%, as is the average selling price.

The operating margin, meanwhile, should approach 22% for the full year.