Bellway hikes divi as profits surge

Bellway, the house builder listed on the FTSE 250, reported a massive jump in profits in its first half, leading to a 50 per cent jump in the interim dividend.

Bellway, the house builder listed on the FTSE 250, reported a massive jump in profits in its first half, leading to a 50 per cent jump in the interim dividend.

Revenue increased by 9.6% in the six months to January 31st to £502.5m, from £458.6m the year before, as the company reported a 5.8% increase in the number of homes completed to 2,597.

The firm said that demand remained strongest in the south which accounted for 51% of its legal completions, though its "wide geographic coverage" allowed it to benefit from an improvement up north.

The average selling price of all homes sold increased from £182,753 to £187,426, mainly from the continuing changes in product mix. However, London boroughs registered a higher average price of £214,072.

With the operating margin improving from 10.1% to 12.8% year-on-year - helped by cost control and a greater proportion of completions from newly acquired land - profit before tax surged by 47.5% from £40.6m to £59.9m and earnings per share jumped 50.4% to 37.9p.

"The group has delivered another strong set of results, having achieved further growth in volume, average selling price and operating margin and this has contributed to an improvement in return on capital employed," said Chairman John Watson.

As such, the dividend at the half-year stage was hiked by 50% to 9.0p per share, up from 6.0p and the half last year.

"These results have delivered further value creation for shareholders through growth in net asset value, together with a continuation of progressive dividend payments," Watson said.

Outlook optimistic as reservations increaseReservations rose to an average of 97 per week during the the first half, up from 89 previously, helped by government incentives such as the NewBuy and MI New Home schemes which accounted for 11% of reservations taken during the period.

However, in the six weeks since February 1st, reservations have jumped to 133 per week (120 the year before), meaning that Bellway has reserved or legally completed 94% of its current full-year volume target.

The company said that the availability of affordable, higher loan-to-value mortgage products has remained a constraint that has tempered consumer demand.

"The board welcomes the recently announced budget measures to support the housing market.Whilst it is too early to assess the effect these measures may have, we remain hopeful that they will lead to improvements in mortgage accessibility."

Recommended

The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into
2 Mar 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
27 Feb 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023

Most Popular

5 top UK tech stocks
Investments

5 top UK tech stocks

The UK market has never been considered a fertile hunting ground for tech stars. But there are plenty of promising companies beyond the old economy, s…
23 Mar 2023
Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023