More on Bellway
Bellway: H1 results
Housebuilder Bellway reported flat half year results, despite an increase in units sold, in what the chairman of the company described as ‘challenging’ conditions.
Operating profits for the six months to January 2006 reached £96.2m compared to £96.4m in the same period the previous year. The number of units sold rose to 2958 from 2930 last year albeit at a slightly lower selling price of £166,600 compared to £167,000 last year.
Operating margins declined to 19% from 19.6% the previous year as a result of higher building costs and the greater use of sales incentives.
On a more positive note, the order book of £715m (amounting to 92% of the current years targeted sales) and with a further 1500 units of the following years sales either contracted or reserved, medium term prospects look reasonable.
More optimistic investors can take heart from the company’ statement that February and March sales have shown an upturn, which was not incentive lead.
The company is cautiously optimistic in its outlook, and medium term prospects look somewhat better than those of its peers but the key factor on which longer term prospects depend is the direction of the housing market.
The share trades at 1233p, on a prospective PE (2006 earnings) of 8.7x in line with the sector with a yield of 2.9%.
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