National Housebuilder Bellway Plc Today, Wednes...

NEWCASTLE-UPON-TYNE, England, March 26 /PRNewswire/ --

    
    Highlights                                      Half Year Ended
 
                                                        31 January
                                                      2008       2007

    - Homes sold                                     3,252      3,264
    - Average selling price                      GBP174.8k  GBP173.3k
    - Turnover                                   GBP581.5m  GBP576.5m
    - Operating profit                           GBP105.2m  GBP107.8m
    - Operating margin                               18.1%      18.7%
    - Profit before taxation                      GBP96.9m  GBP100.8m
    - Basic earnings per ordinary share              59.4p      61.7p
    - Dividend per ordinary share                    18.1p     16.45p
    - Land bank - plots with planning permission   23,000     22,500
    - Total equity                             GBP1,071.4m  GBP953.6m
    - Net asset value per ordinary share              934p       833p
    - Return on average capital employed             20.9%      22.7%





    Chairman, howard dawe said "Bellway has produced a good set of results
for the six months....."



    he added "Profit before tax has fallen 3.9% to GBP96.9 million, still a
creditable performance against a backdrop of an uncertain market place."



    furthermore "The Board continues its progressive dividend policy.... by
announcing an increase in the interim dividend of 10%...."



    He concluded ".....Bellway is positioning itself to ensure that growth
recommences as soon as the housing market returns to more normal levels of
activity."



Note to Editors:

    Bellway Plc is one of the country's top four housebuilding
companies. With its headquarters in the North East of England, the Group's
operations stretch the length and breadth of the country. Bellway provides a
wide range of house types covering one, two and three bedroom apartments;
terraced housing; three storey houses; semi-detached houses and three, four
and five bedroom detached properties. The Group is active in major
regeneration schemes across the country and is a leading provider of
affordable homes. Over 80% of its homes are constructed on brown-field land.



Photographs:

    High resolutions photographs are available to the media free
of charge at: http://www.newscast.co.uk, Tel: [phone]



Chairman's Statement

    It has been well documented that since the summer of 2007 the
economy and, in particular the housing market, has been suffering from the
uncertainties experienced in global financial markets. Nevertheless, Bellway
has produced a good set of results for the six months ended 31 January 2008.



Interim Results

    The number of homes sold in the period was similar to last
year at 3,252 (2007 - 3,264) and the average price of these sales increased
slightly to GBP174,800 (2007 - GBP173,300). Housing turnover has increased by
0.5% to GBP568.4 million. This, combined with other turnover of GBP13.1
million (2007 - GBP10.9 million), which comprises in the main land sales,
took total Group turnover to GBP581.5 million, up from GBP576.5 million last
year. As has previously been indicated, operating margin did fall from 18.7%
to 18.1%, mainly influenced by the increased use of incentives and operating
profit has reduced, albeit by only GBP2.6 million, to GBP105.2 million. Net
finance costs have risen to GBP8.1 million from GBP6.9 million and are
covered almost 13 times, with gearing at 21% at 31 January. Profit before tax
has fallen 3.9% to GBP96.9 million, still a creditable performance against a
backdrop of an uncertain market place. Basic earnings per ordinary share were
59.4p (2007 - 61.7p) and net assets per ordinary share is now 934p.



Dividend

    The Board continues its progressive dividend policy and
emphasises its confidence in the long term prospects for the Group by
announcing an increase in the interim dividend of 10% from 16.45p to 18.1p.
The interim dividend will be paid on Tuesday 1 July to ordinary shareholders
on the Company's Register of Members at the close of business on Friday 23
May 2008. The ex-dividend date is Wednesday 21 May 2008.



Trading

    The current housing market can be described as tough, caused
primarily by a change in consumer confidence and the continuing credit
crisis. Particularly hard hit are first time buyers who are having to find
larger deposits in order to make their first step onto the housing ladder as
a result of changes in loan to value criteria announced by lenders.



    Our full national coverage means that Bellway is not over
exposed in any one geographical area and, indeed, is presently performing
well in Scotland and the southern part of England where demand and keen
pricing in the affordable sector of the market has meant that these divisions
are operating at, or close to, our original aspirations. Elsewhere,
especially in the Midlands, Yorkshire and North West, the market remains
challenging. Bellway's sales teams are armed with a full basket of incentives
to offer prospective clients and have recently reported a pleasing visitor
rate to sites although this has not, as yet filtered through to encouraging
reservation levels.



    From 1 August through to 17 March the Group has seen its
reservations reduce by 9% when compared to the same period last year.
However, the Group has benefited from its long established policy of forward
selling and at 31 January the order book amounted to GBP580 million (2007 -
GBP652 million), and currently the order book stands at GBP670 million.
Furthermore, 88% of our revised target output for this year has now been
secured.



    The land market is starting to show signs of softening and,
with the strength of the Group's balance sheet coupled with a relatively low
level of gearing, Bellway is positioned to take advantage of any
opportunistic land buying that may arise. The Group continues to buy land,
albeit on a more selective basis, and this has resulted in a reduction of 500
plots in the land bank with planning permission to 23,000 plots. The pipeline
holdings of 16,900 plots, when combined with the land bank, provides the
Group with an ample supply of land which represents in excess of five years
at the current rate of usage.



Chairman's Statement (continued)

People

    In these more difficult times the Board is extremely grateful
to all its employees, subcontractors, suppliers and partners without whose
support these results would not have been achieved.



Future Prospects

    The Board is convinced that its well established model of
growing volumes enhances shareholder value in the long term and we intend to
continue this strategy, subject to market conditions. Whilst the Group's
record of volume growth is not likely to be extended this year, Bellway is
positioning itself to ensure that growth recommences as soon as the housing
market returns to more normal levels of activity. It is for these reasons
that the Board remains confident as to the future long term prospects for the
Group.



Howard C Dawe

Chairman

25 March 2008

Group Income Statement

    
                                          Half year  Half year      Year
                                              ended      ended     ended
                                         31 January 31 January   31 July
                                               2008       2007      2007
                                               GBPm       GBPm      GBPm
 
    Revenue                                   581.5      576.5   1,354.0
 
    Cost of sales                           (445.3)    (439.7) (1,042.1)
 
    Gross profit                              136.2      136.8     311.9
 
    Administrative expenses                  (31.0)     (29.0)    (58.8)
 
    Operating profit                          105.2      107.8     253.1
 
    Finance income                              3.7        2.1       5.1
    Finance expenses                         (11.8)      (9.0)    (23.0)
 
    Share of loss of associates               (0.2)      (0.1)     (0.3)
 
    Profit before taxation                     96.9      100.8     234.9
 
    Income tax expense                       (28.9)     (30.5)    (68.2)
 
    Profit for the period                      68.0       70.3     166.7
 
    Earnings per ordinary share - Basic       59.4p      61.7p    146.1p
    - Diluted                                 59.2p      61.0p    144.7p
 
    Dividend per ordinary share               18.1p     16.45p   43.125p





Group Statement of Recognised Income and Expense

    
                                            Half year  Half year      Year
                                                ended      ended     ended
                                           31 January 31 January   31 July
                                                 2008       2007      2007
                                                 GBPm       GBPm      GBPm
 
    Actuarial (losses) / gains on defined       (0.7)        1.6       5.3
    benefit pension scheme
 
    Tax on items taken directly to equity         0.2      (0.5)     (1.5)
 
    Net (expense) / income recognised directly  (0.5)        1.1       3.8
    in equity
 
    Profit for the period                        68.0       70.3     166.7
 
    Total recognised income for the period       67.5       71.4     170.5





Group Balance Sheet

    
                                                   At         At        At
                                           31 January 31 January   31 July
                                                 2008       2007      2007
                                                 GBPm       GBPm      GBPm
 
    ASSETS
    Non-current assets
    Property, plant and equipment                12.3       13.3      12.7
    Investment property                           2.4        1.7       2.4
    Investments in associates                       -          -         -
    Other receivables                             6.0        8.2       5.2
    Deferred tax assets                           5.5        8.3       7.8
                                                 26.2       31.5      28.1
    Current assets
    Inventories                               1,628.4    1,519.6   1,537.9
    Trade and other receivables                  42.9       40.0      45.2
    Cash and cash equivalents                    25.7        9.5      25.4
 
                                              1,697.0    1,569.1   1,608.5
 
    Total assets                              1,723.2    1,600.6   1,636.6
 
    LIABILITIES
    Non-current liabilities
    Interest bearing loans and borrowings     (162.0)    (154.0)    (77.0)
    Retirement benefit obligations              (3.0)      (5.3)     (2.0)
    Other payables                             (33.6)     (35.6)    (47.9)
 
                                              (198.6)    (194.9)   (126.9)
    Current Liabilities
    Interest bearing loans and borrowings      (91.5)     (44.2)    (60.5)
    Trade and other payables                  (335.1)    (382.5)   (380.9)
    Current tax liabilities                    (26.6)     (25.4)    (32.5)
 
                                              (453.2)    (452.1)   (473.9)
 
    Total liabilities                         (651.8)    (647.0)   (600.8)
 
    Net assets                                1,071.4      953.6   1,035.8
 
    EQUITY
    Issued capital                               14.3       14.3      14.3
    Share premium                               116.0      114.3     115.5
    Other reserves                                1.5        1.5       1.5
    Retained earni                              939.7      823.6     904.6
 
    Total equity attributable to equity       1,071.5      953.7   1,035.9
    holders of the parent
 
    Minority interest                           (0.1)      (0.1)     (0.1)
 
    Total equity                              1,071.4      953.6   1,035.8





Group Cash Flow Statement

    
                                              Half year  Half year    Year
                                                  ended      ended   ended
                                             31 January 31 January 31 July
                                                   2008       2007    2007
                                                   GBPm       GBPm    GBPm
 
    Cash flows from operating activities
    Profit for the period                          68.0       70.3   166.7
 
    Depreciation charge                             1.4        1.5     3.1
    Profit on sale of property, plant and             -      (0.2)   (0.2)
    equipment
    Finance income                                (3.7)      (2.1)   (5.1)
    Finance expenses                               11.8        9.0    23.0
    Share based payment charge                      1.0        1.3     2.6
    Income tax expense                             28.9       30.5    68.2
    Increase in inventories                      (90.5)     (85.6) (103.9)
    Decrease / (increase) in trade and other        2.5     (15.4)  (17.2)
    receivables
    (Decrease) / increase in trade and other     (62.2)       36.3    46.6
    payables
 
    Cash (outflow) / inflow from operations      (42.8)       45.6   183.8
 
    Interest paid                                 (9.8)      (6.4)  (19.4)
    Income tax paid                              (34.6)     (33.1)  (63.8)
 
    Net cash (outflow) / inflow from operating   (87.2)        6.1   100.6
    activities
 
    Cash flows from investing activities
    Acquisition of property, plant and equipment  (1.4)      (1.8)   (3.1)
    Acquisition of investment property            (0.1)          -   (0.7)
    Proceeds from sale of property, plant and       0.4        1.0     1.2
    equipment
    Proceeds from the sale of investment            0.2          -       -
    property
    Interest received                               2.7        1.5     4.0
 
    Net cash inflow from investing activities       1.8        0.7     1.4
 
    Cash flows from financing activities
    Increase / (decrease) in bank borrowings      135.0       20.0  (67.0)
    Proceeds from the issue of share capital on     0.5        2.8     3.6
    exercise of share options
    Purchase of own shares by employee share      (0.5)      (1.5)   (2.4)
    option plans
    Dividends paid                               (30.2)     (23.0)  (41.7)
 
    Net cash inflow / (outflow) from financing    104.8      (1.7) (107.5)
    activities
 
    Net increase / (decrease) in cash and cash     19.4        5.1   (5.5)
    equivalents
 
    Cash and cash equivalents at beginning of    (18.2)     (12.7)  (12.7)
    period
 
    Cash and cash equivalents at end of period      1.2      (7.6)  (18.2)
 


Notes

1. Basis of preparation and accounting policies

    These condensed financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the EU. They
do not include all of the information required for full annual financial
statements, and should be read in conjunction with the Group financial
statements for the year ended 31 July 2007.



    These condensed financial statements are unaudited and were
approved by the Board of Directors on 25 March 2008.



    The information for the year ended 31 July 2007 does not
constitute statutory financial statements as defined in section 240 of the
Companies Act 1985. Those financial statements have been reported on by the
Group's auditors and delivered to the Registrar of Companies. The report of
the auditors was unqualified and did not contain statements under section
237(2) or (3) of the Companies Act 1985.



    The accounting polices applied by the Group in these condensed
financial statements are the same as those applied by the Group in its
consolidated financial statements for the year ended 31 July 2007.



2. Changes in accounting policies

    In the current financial year, the Group will adopt IFRS 7
'financial instruments' disclosures' for the first time. As IFRS 7 is a
disclosure standard, there is no impact of this change in accounting policy
on the condensed interim financial statements. Details of the change will be
disclosed in the Group's Annual Report and Accounts for the year ending 31
July 2008.



3. Revenue/segmental analysis

    The Group uses business as the basis for primary segmentation.
Operations are carried out within one business segment which is
housebuilding. No additional business segment information is required to be
provided. The Group's secondary segment is geography. It operates in one
geographical segment, the United Kingdom, therefore no additional
geographical segment information is required to be provided.



4. Taxation

    The taxation charge for the half years ended 31 January 2008
and 31 January 2007 is calculated by applying the Director's best estimate of
the annual effective tax rate to the profit for the period.



5. Dividends

    
                                              Half year  Half year    Year
                                                  ended      ended   ended
                                             31 January 31 January 31 July
                                                   2008       2007    2007
                                                   GBPm       GBPm    GBPm
 
    Final dividend paid for the year ended 31      30.5       23.1    23.1
    July 2007 of 26.675p per share (2006 -
    20.2p)
    Interim dividend paid for the year ended 31       -          -    18.8
    July 2007 of 16.45p per share
                                                   30.5       23.1    41.9
 
    Proposed interim dividend for the year         20.8       18.9       -
    ending 31 July 2008 of 18.1p per share (2007
    - 16.45p)





    The proposed interim dividend was approved by the Board of
Directors on 25 March 2008 and has not been included as a liability at the
balance sheet date.



Notes (continued)

6. Group statement of changes in equity

    
                                              Half year  Half year    Year
                                                  Ended      ended   ended
                                             31 January 31 January 31 July
                                                   2008       2007    2007
                                                   GBPm       GBPm    GBPm
 
    Total recognised income and expense            67.5       71.4   170.5
    Dividends on equity shares                   (30.5)     (23.1)  (41.9)
    Shares issued                                   0.5        2.5     3.7
    Charge in relation to share options and tax   (1.4)        0.9     2.5
    thereon
    Exercise of share options / share awards      (0.5)      (1.5)   (2.4)
 
    Net increase in total equity                   35.6       50.2   132.4
 
    Total equity at the start of the period     1,035.9      903.5   903.5
 
    Total equity at the end of the period       1,071.5      953.7 1,035.9





7. Related party transactions

    There have been no related party transactions in the first six
months of the current financial year which have materially affected the
financial position or performance of the Group.



    Related parties are consistent with those disclosed in the
Group's Annual Report and Accounts for the year ended 31 July 2007.



8. Interim report

    The condensed financial statements were approved by the Board
of directors on 25 March 2008 and copies are being posted to all
shareholders. Further copies are available on application to the Company
Secretary, Bellway p.l.c., Seaton Burn House, Dudley Lane, Seaton Burn,
Newcastle upon Tyne NE13 6BE and are also available on our website
http://www.bellway.co.uk.



Notes (continued)

Principal risks and uncertainties

    The directors consider that the principal risks and
uncertainties which could have a material impact on the Group's performance
in the remaining six months of the financial year remain the same as those
stated on pages 33 and 34 of our Annual Report and Accounts for the year
ended 31 July 2007 which is available on our website at www.bellway.co.uk.



Statement of directors' responsibilities

    The Director named below confirms on behalf of the Board of
Directors that to the best of his knowledge:



    - the condensed set of financial statements has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;



    - the interim management report includes a fair review of the
information required by:



    (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and



    (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related party transactions described in the last annual report that could
do so.



    The Directors of Bellway p.l.c. are listed in the Annual
Report and Accounts for the year ended 31 July 2007 and there has been no
change since that date.



For and on behalf of the Board of Directors

John K Watson

Chief Executive

25 March 2008

    
    For Further Information, Please Contact
    John Watson, Chief Executive
    or
    Alistair Leitch, Finance Director

    Wednesday 26 March - Friday 28 March

    J Watson: [phone]
    A Leitch: [phone]
    Thereafter: [phone]
    or
    Julian Kenyon, Group PR Manager on [phone]