Interim Results

Bellway PLC 06 April 2004 NATIONAL HOUSEBUILDER BELLWAY p.l.c. TODAY, TUESDAY 6 APRIL 2004, ANNOUNCE THEIR INTERIM RESULTS FOR THE SIX MONTHS TO 31 JANUARY 2004 HIGHLIGHTS Six Months to 31 January 2004 2003 Increase Turnover - £m 436.5 362.2 20.5% Operating profit - £m 81.0 59.7 35.7% Profit before taxation - £m 77.4 57.1 35.6% Basic earnings per ordinary share - pence 47.9 35.6 34.6% Dividend per ordinary share - pence 9.3 6.2 50.0% Net asset value per ordinary share - pence 521 427 22.0% THE CHAIRMAN HOWARD DAWE SAID '2004 IS SET TO BE AN HISTORIC YEAR FOR BELLWAY'. FURTHERMORE 'WE ARE ON TRACK TO DELIVER OUR THIRTEENTH YEAR OF UNINTERRUPTED ORGANIC VOLUME GROWTH'. HE ADDED 'I AM DELIGHTED TO ANNOUNCE ... AN INCREASE OF 50% IN THE INTERIM DIVIDEND, ... WE HAVE ... 98% OF THIS YEAR'S TARGET'. HE CONCLUDED 'THE BOARD IS CONFIDENT THAT IT WILL DELIVER ANOTHER RECORD SET OF RESULTS'. 2004 2003 * Homes sold - no. 2,728 2,470 * Average selling price - £000 156.9 144.5 * Operating margin - % 18.5 16.5 * Return on average capital employed - % 28.0 26.8 * Land bank - plots with planning permission 19,600 17,800 * Shareholders' funds - £m 602.8 491.3 FOR FURTHER INFORMATION, PLEASE CONTACT JOHN WATSON, CHIEF EXECUTIVE OR ALISTAIR LEITCH, FINANCE DIRECTOR TUESDAY 6 APRIL - THURSDAY 8 APRIL J WATSON: 07855 337007 A LEITCH: 07855 337001 THEREAFTER: 0191 217 0717 BELLWAY p.l.c CHAIRMAN'S STATEMENT Interim Results 2004 is set to be an historic year for Bellway and I am delighted to announce record results for the six months ended 31 January 2004. This period saw the Group convert its record order book position last July into increased completions, turnover, operating margin and profits. We are on track to deliver our thirteenth year of uninterrupted organic volume growth. In the period, turnover grew by 20.5% to £436.5 million as we completed the sale of 2,728 homes at an average price of £156,900, an increase of 10.4% and 8.6% respectively over the same period in 2003. Profit before tax advanced by 35.6% from £57.1 million to £77.4 million, with the operating margin improving from 16.5% to 18.5% and operating profit rising by £21.3 million to £81.0 million, an increase of 35.7%. Net interest payable of £3.6 million is covered 23 times and net borrowings at 31 January 2004 stood at £188.8 million resulting in gearing of 31.3%. During the six months we have spent £174 million on acquiring land with planning permission. The return on the average capital employed was 28%. Dividend You will recall that at this stage last year we increased our interim dividend by 36% to effect a more even distribution between the first and second halves and to better reflect our actual trading performance. In recognition of this excellent performance, I am delighted to announce a continuation of this realignment with an increase of 50% in the interim dividend from 6.2p to 9.3p. I would expect in the absence of unforeseen circumstances that the Board will recommend an increase in the total dividend for the year of around 20%. The dividend will be paid on Thursday 1 July to ordinary shareholders who are on the company's Register of Members at the close of business on Friday 4 June 2004. The ex-dividend date is Wednesday 2 June 2004. Trading and Outlook Despite the recent increases in interest rates, we continue to enjoy buoyant market conditions and have, to date, reserved 1,000 more homes than at the same time last year. We have reserved, contracted or legally completed 98% of this year's target compared to 92% last year. The forward order book for this and the next financial year currently stands at £631 million, an increase of 25% as compared to last year. Our main focus remains the middle market and our 'local, national housebuilder' ethos allows us to adapt to local needs through the wide geographical coverage enjoyed by the fifteen trading divisions. I previously mentioned 2004 as being an historic year as we celebrate our 25th anniversary of Bellway p.l.c.'s listing on the London Stock Exchange and we will also complete the sale of our 100,000th home. Bellway was the first housebuilder to receive an Urban Regeneration Grant, an Urban Development Grant and a City Grant. We were pleased to announce last week another first with the creation of a joint venture company, Barking Riverside Limited, between ourselves and the Government's development agency, English Partnerships, to develop land at Barking Reach in Thames Gateway. This agreement will bring forward the early release for development of up to 11,000 new homes. Excluding Barking, our landbank with planning permission has grown by approximately 1,200 plots since July 2003 to a record 19,600 plots. This is further augmented by land that we own or control where planning should be received in the near future amounting to 16,000 plots. In addition, we have holdings of 3,200 acres which we continue to progress through the planning system. Our fifteen trading divisions have all performed well with the embryonic South West division contributing to these results for the first time. Plans to sub-divide Scotland into two trading divisions are well advanced and these two separate entities will commence operation from August 2004. The Thames Gateway North division has recently bought its first site and will contribute in 2005. People As ever, we are indebted to our employees together with our many suppliers, sub-contractors and partners without whose efforts these record results would not be possible and the Board would like to offer to everyone involved its sincere thanks. Future Prospects The recent 'Barker Report' in tandem with the Budget announcement on 17 March should have a positive long-term effect on the industry. In the interim, the Group's efforts continue to be focused primarily on the middle market. This, together with our urban regeneration skills and wide geographical spread, should ensure that Bellway continues to flourish and achieve its target of selling by 2010 some 10,000 homes per annum. The Board is confident that it will deliver another record set of results for the year to 31 July. H C Dawe Chairman 5 April 2004 BELLWAY p.l.c. GROUP PROFIT AND LOSS ACCOUNT Half year ended Half year ended Year ended 31 January 31 January 31 July 2004 2003 2003 £m £m £m Turnover 436.5 362.2 954.2 ==== ==== ==== Operating profit 81.0 59.7 173.1 Exceptional items : Profit on disposal of freehold ground - - 2.1 rents Net interest payable (including associated undertakings) (3.6) (2.6) (5.9) ______ ______ ______ Profit on ordinary activities before taxation 77.4 57.1 169.3 Taxation (23.2) (17.1) (50.7) ______ ______ ______ Profit on ordinary activities after taxation 54.2 40.0 118.6 Dividends on equity and non-equity shares (11.4) (7.8) (24.2) ______ ______ ______ Retained profit 42.8 32.2 94.4 ==== ==== ==== Dividend per preference share 4.75p 4.75p 9.5p Dividend per ordinary share 9.3p 6.2p 20.0p Earnings per ordinary share - basic 47.9p 35.6p 106.0p Earnings per ordinary share - diluted 47.3p 35.2p 104.9p BELLWAY p.l.c. GROUP BALANCE SHEET At At At 31 January 31 January 31 July 2004 2003 2003 As Restated As Restated £m £m £m £m £m £m Fixed assets Tangible assets 16.0 16.3 16.3 Investments 0.1 - 0.1 ______ ______ ______ 16.1 16.3 16.4 Current assets Stocks 1020.8 809.0 858.0 Debtors 36.3 21.3 33.4 Cash at bank and in hand 11.9 33.0 88.4 ______ ______ ______ 1069.0 863.3 979.8 ______ ______ ______ Creditors due within one year Bank borrowings (40.7) (73.3) - Other creditors (255.1) (216.5) (269.4) ______ ______ ______ Net current assets 773.2 573.5 710.4 ______ ______ ______ Total assets less current liabilities 789.3 589.8 726.8 Creditors due after more than one year Bank borrowings (160.0) (85.0) (130.0) Other creditors (including provisions for (26.5) (13.5) (39.8) liabilities and charges) ______ ______ ______ (186.5) (98.5) (169.8) ______ ______ ______ NET ASSETS 602.8 491.3 557.0 ==== ==== ==== Capital and reserves Called up share capital 34.0 33.8 33.9 Reserves and share premium 568.8 457.5 523.1 ______ ______ ______ SHAREHOLDERS' FUNDS 602.8 491.3 557.0 ==== ==== ==== The interim accounts were approved by the Board of Directors on 5 April 2004. The financial information for the two half year periods is unaudited and does not constitute statutory accounts within the meaning of the Companies Act 1985. The figures relating to the year ended 31 July 2003 are an extract from statutory accounts within the meaning of section 240 of the Companies Act 1985 which have been delivered to the Registrar of Companies and on which the auditors gave an unqualified audit report. The taxation charge is calculated by applying the directors' best estimate of the annual effective tax rate to the profit for the period. The interim accounts have been prepared on the basis of the accounting policies adopted for the year ended 31 July 2003 in all material respects, other than as detailed below. These policies are detailed in the company's Annual Report and Accounts for that year. The Group has adopted Urgent Issues Task Force Abstract 38 : ' Accounting for ESOP trusts' for the 2004 Interim results. Ordinary shares in Bellway p.l.c. held in employee share ownership plans were previously reported as Fixed Asset Investments. The shares are now recorded as a deduction from Shareholders' Funds. At 31st January 2004 the carrying value of these shares was £1.9m which has been set against Other Reserves within Reserves and Share Premium. The comparative figures for Fixed Asset Investments and Reserves and Share Premium have been amended to reflect the change in treatment. The comparative figures have been restated such that Reserves and Share Premium has been reduced by £1.5m at 31 January 2003 and by £1.3m at 31 July 2003. BELLWAY p.l.c. GROUP CASH FLOW STATEMENT Half Year ended Half Year ended Year ended 31 January 31 January 31 July 2004 2003 2003 £m £m £m £m £m £m Net cash (outflow) / inflow from operating activities Group operating profit 81.0 59.7 173.1 Depreciation charge 1.8 1.8 3.6 Profit on sale of fixed assets (0.1) (0.2) (0.2) Increase in stocks - Land (94.0) (61.0) (84.0) - Work in Progress (68.8) (10.8) (36.7) (Increase) / Decrease in debtors (2.8) 0.2 (12.6) (Decrease) / Increase in creditors (18.4) (41.1) 18.8 ______ ______ ______ (101.3) (51.4) 62.0 Net cash outflow from returns on investments and servicing of finance Interest paid (3.5) (3.3) (5.8) Interest received 0.6 0.7 1.4 Dividends paid - non-equity (0.9) (0.9) (1.9) ______ ______ ______ (3.8) (3.5) (6.3) Taxation (25.5) (20.2) (44.3) Net cash (outflow) / inflow from capital expenditure and financial investment Purchase of tangible fixed assets (2.0) (2.0) (4.1) Sale of tangible fixed assets 0.7 5.4 - Sale of freehold ground rents - - 8.1 ______ ______ ______ (1.3) 3.4 4.0 Equity dividends paid (15.4) (12.4) (19.2) ______ ______ ______ Net cash outflow before financing (147.3) (84.1) (3.8) Net cash inflow from financing Issue of ordinary share capital on exercise of share options 0.1 0.2 3.6 Increase / (decrease) in bank loans due within one year 15.0 - (30.0) Increase in bank loans due after more than one 30.0 - 45.0 year ______ ______ ______ 45.1 0.2 18.6 ______ ______ ______ (Decrease) / increase in cash in period (102.2) (83.9) 14.8 ==== ==== ==== This information is provided by RNS The company news service from the London Stock Exchange

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