Interim Results - 6 Months to 31 January 2000

Bellway PLC 12 April 2000 NATIONAL HOUSEBUILDER BELLWAY p.l.c. TODAY (WEDNESDAY 12 APRIL 2000) ANNOUNCE THEIR INTERIM RESULTS FOR THE HALF YEAR ENDED 31 JANUARY 2000 THE CHAIRMAN SAID 'PROFIT BEFORE TAX LEAPT BY £9.2 MILLION TO £30.4 MILLION ........... AN INCREASE OF 43%' HIGHLIGHTS Half Year Half Year Ended Ended 31 January 2000 31 January 1999 Profit before tax £30.4m £21.2m +43% Turnover £249m £181m +38% Homes sold 2,197 2,007 +9% Average selling price £106,000 £89,100 +19% Operating margin 13.2% 13.0% +2% Operating profit £32.9m £23.4m +41% Dividend per ordinary share 3.6p 3.3p +9% Ordinary dividend cover 5.2x 3.8x Basic earnings per ordinary 18.8p 12.6p +49% share Net asset value per ordinary 262p 226p +16% share CHAIRMAN'S STATEMENT INTERIM RESULTS AND DIVIDEND I am pleased to report an excellent set of results for the half year to 31 January 2000. Turnover rose by 38% to £249.4 million from £180.6 million and profit before tax leapt by £9.2 million to £30.4 million from £21.2 million, an increase of 43%. Homes sold in the period reached a new high of 2,197 rising from 2,007. Our average sales price broke the £100,000 barrier for the first time reaching £106,000, 19% above the £89,100 achieved in the comparable period last year. There was an improvement in the operating margin to 13.2% and the return on average capital employed was 22.9%. Basic earnings per share were 18.8p compared to 12.6p and the directors are pleased to declare an interim dividend of 3.6p per ordinary share, an increase of 9%. This dividend will be paid on 1 July 2000 to all ordinary shareholders who are on the Register of Members on 9 June 2000. TRADING Since our flotation more than twenty years ago, we have been renowned for our regional and site specific designs, unlike many of our competitors who are using stereotyped national house designs. Our policy has been vindicated by our consistent and enviable record. This is now further underlined by the Government's recent Planning Policy Guidance Note requiring good design and layout to make the best use of brownfield land and thus improve the attractiveness of residential areas. Quality brownfield development is not achieved by standard design and layouts and we will continue therefore to retain our flexible approach and add to our reputation as 'the local, national housebuilder'. Building on our past experience in urban regeneration, we continue to be innovative in our approach to the procurement of land, especially in brownfield areas. The Group's skills in this area should allow us to continue to increase our market share. We are pleased to say that for the past few years we have achieved the Government's 60% target for new housing development to be on brownfield land. Our policy for targeting inner city areas has continued and we have many high value flatted developments in the inner city areas of London, Cardiff, Ipswich, Birmingham, Nottingham, Sheffield, Manchester, Glasgow and Edinburgh. In last year's report reference was made to planning and other unforeseen delays hampering the trading of our South East division. We are pleased to report that these problems have been resolved and the division is now set for profitable expansion under new management. We continue to enhance our high quality land bank, particularly in brownfield locations. At 31 January 2000, the Group had 17,400 plots with planning permission. In addition we control a larger number of plots that have realistic prospects of securing planning permission in the future. The Government has earmarked the Thames Gateway as a major growth area for the next decade and here we have a large holding of land zoned for housing. EMPLOYEES The Group's future prosperity is secured not only by our land bank but through the outstanding efforts and teamwork of all our employees. I would like to thank them on behalf of the Board and the shareholders. OUTLOOK The Government's recent budget was understandably aimed at calming the housing market which if successful is in the best interests of the industry. The increase in stamp duty on homes over £250,000 will affect only a small percentage of our business. The disappearance of MIRAS has, we believe, already been anticipated by our purchasers and we have not noticed any reduction in demand since the budget. Interest rates increased several times last year and many experts expect further increases. However, in spite of these fiscal changes, we expect demand to remain strong as our products, locations and prices remain attractive. Our homes sold are over 500 in advance of this time last year with a forward order book of over £350 million. As always, we continue to devote considerable resources to customer care. We have new bespoke software systems to further improve the level of service we provide and we are planning the introduction of integrated WAP mobile telephones for communication purposes with our subcontractors. Technology advances daily and we must embrace it in the way we operate. Our web site receives many enquiries daily, not only from this country but from abroad, with a small but increasing percentage of our homes being sold this way. The site is being improved continuously and we have now launched new features such as interactive views of show home interiors and the ability to take reservation fees on-line by credit card. Your Board remains, as ever, extremely confident about the Group's future prospects. H C Dawe Chairman 11 April 2000 FOR FURTHER INFORMATION CONTACT:- ALAN G ROBSON, GROUP FINANCE DIRECTOR, BELLWAY p.l.c. AT THE OFFICES OF CHARTERHOUSE SECURITIES LIMITED, 1 PATERNOSTER ROW, ST PAUL'S, LONDON EC4M 7DH (telephone 0171 248 4000) BELLWAY p.l.c. GROUP PROFIT & LOSS ACCOUNT Half Year to Half Year to Year Ended 31 January 31 January 31 July 2000 1999 1999 £m £m £m Turnover 249.4 180.6 504.4 ==== ==== ==== Operating profit on ordinary 32.9 23.4 73.3 activities Share of operating profit in - - 0.4 associated undertakings _____ _____ _____ Total operating profit 32.9 23.4 73.7 Profit on sale of fixed asset - 0.9 0.9 investment _____ _____ _____ Profit on ordinary activities 32.9 24.3 74.6 before interest Net interest payable 2.5 3.1 6.4 _____ _____ _____ Profit on ordinary activities 30.4 21.2 68.2 before taxation Taxation 9.1 6.6 21.0 _____ _____ _____ Profit on ordinary activities 21.3 14.6 47.2 after taxation Minority Interest - - 0.1 Dividends on equity and 4.9 4.5 14.2 non-equity shares _____ _____ _____ Retained profit 16.4 10.1 33.1 ==== ==== ==== Dividend per preference share 4.75p 4.75p 9.5p Dividend per ordinary share 3.6p 3.3p 11.25p Earnings per ordinary share - 18.8p 12.6p 42.0p basic Earnings per ordinary share - 18.7p 12.5p 41.8p diluted BELLWAY p.l.c. GROUP BALANCE SHEET At At At 31 January 31 January 31 July 2000 1999 1999 £m £m £m £m £m £m Fixed assets Tangible 14.0 12.6 13.2 assets Investments 2.0 1.8 2.1 _____ _____ _____ 16.0 14.4 15.3 Current assets Stocks 544.1 504.4 490.1 Debtors 24.5 21.2 20.0 Cash at bank - 0.4 9.7 and in hand _____ _____ _____ 568.6 526.0 519.8 _____ _____ _____ Creditors due within one year:- Bank 39.0 47.3 - borrowings Other 157.7 165.3 165.1 creditors _____ _____ _____ 196.7 212.6 165.1 _____ _____ _____ Net current 371.9 313.4 354.7 assets _____ _____ _____ Total assets 387.9 327.8 370.0 less current liabilities Creditors due after more than one year:- Bank 55.0 45.0 55.0 borrowings Other 27.5 18.0 26.1 creditors _____ _____ _____ 82.5 63.0 81.1 _____ _____ _____ NET ASSETS 305.4 264.8 288.9 ===== ===== ===== Capital and reserves Called up 33.6 33.6 33.6 share capital Reserves and 271.8 231.2 255.3 share premium _____ _____ _____ SHAREHOLDERS' 305.4 264.8 288.9 FUNDS ===== ===== ===== The interim accounts were approved by the Board of Directors on 11 April 2000. The interim accounts have been prepared on the basis of the accounting policies to be adopted in the accounts for the year ending 31 July 2000 in all material respects. These are the same policies as applied in the accounts for the year ended 31 July 1999. The taxation charge is calculated by applying the directors' best estimate of the annual effective tax rate to the profit for the period. 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 1999 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. BELLWAY p.l.c. GROUP CASH FLOW STATEMENT Half Year Half Year Year Ended Ended Ended 31 January 31 January 31 July 2000 1999 1999 £m £m £m £m £m £m Cash 28.7 61.8 (15.8) outflow / (inflow) from operating activities Net cash outflow / (inflow) from returns on investments and servicing of finance Interest 2.8 3.2 6.3 paid Interest (0.4) (0.1) (0.3) received Dividends 0.9 0.9 1.9 paid - non-equity ______ _______ _______ 3.3 4.0 7.9 Taxation 5.8 1.0 23.8 Net cash outflow / (inflow) from capital expenditure and financial investment Purchase of 2.8 2.8 4.9 tangible fixed assets Sale of tangible fixed assets - exceptional - (1.3) (1.3) item - other (0.5) (0.6) (0.8) ______ _______ _______ 2.3 0.9 2.8 Equity 8.7 7.8 11.4 dividends paid ______ _______ _______ Net cash 48.8 75.5 30.1 outflow before financing Net cash inflow from financing Issue of ordinary share capital on exercise of share options (0.1) (0.1) (1.3) Increase in - - (19.0) bank loans ______ _______ _______ (0.1) (0.1) (20.3) ______ _______ _______ Decrease in 48.7 75.4 9.8 cash in period ===== ===== =====

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