More on Bellway
Bellway H1 results
Bellway, the housebuilder has announced an 18.8% increase in operating profits for the six months to January 2005. A 7.4% increase in the number of houses sold (to 2930 units) and better operating margins (19.5% against 18.5% in the same period last year) were responsible for the improved performance.
Average selling prices grew 6.4% to £167,000.
Prospects for this year look good despite the slowing market, the company claims to have secured 97% this years targeted sales through forward sales. Bellway admits that markets have become more difficult and has increased the number of its sales outlets by 10% in an attempt to maintain growth. Our worry is on the medium term prospects of the company in a market that shows signs of every sign of slowing.
The stock trades at 805p on a prospective PE (on 2005 earnings) of 5.9x which is within the sector range.The yield is 3.1%.
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