Interim Results
Bellway PLC
19 April 2005
NATIONAL HOUSEBUILDER BELLWAY p.l.c. TODAY, TUESDAY 19 APRIL 2005, ANNOUNCE
THEIR INTERIM RESULTS FOR THE SIX MONTHS TO 31 JANUARY 2005
HIGHLIGHTS Six Months to 31 January
2005 2004 Increase
Turnover - £m 493.9 436.5 13.2%
Operating profit - £m 96.2 81.0 18.8%
Profit before taxation - £m 91.7 77.4 18.5%
Basic earnings per ordinary share - pence 56.5 47.9 18.0%
Dividend per ordinary share - pence 13.0 9.3 39.8%
Net asset value per ordinary share - pence 627 521 20.3%
CHAIRMAN, HOWARD DAWE SAID 'I am delighted to announce yet another record set of
results'. Furthermore 'Bellway is pleased to announce an increase of almost 40%
in the interim dividend'. He added 'The Group has also been able to maintain a
healthy order book'. He concluded 'The Board is confident of ... recording its
fourteenth consecutive year of organic growth'.
2005 2004
* Homes sold - no. 2,930 2,728
* Average selling price - £000 167.0 156.9
* Operating margin - % 19.5 18.5
* Return on average capital employed - % 27.8 28.0
* Land bank - plots with planning permission 21,200 19,600
* Shareholders' funds - £m 725.9 602.8
FOR FURTHER INFORMATION, PLEASE CONTACT JOHN WATSON, CHIEF EXECUTIVE OR ALISTAIR
LEITCH, FINANCE DIRECTOR
TUESDAY 19 APRIL - THURSDAY 21 APRIL
J WATSON: 07855 337007
A LEITCH: 07855 337001
THEREAFTER: 0191 217 0717
BELLWAY p.l.c
CHAIRMAN'S STATEMENT
Interim Results
In my first statement as Non-Executive Chairman, I am delighted to announce yet
another record set of results for the six months ended 31 January 2005.
Total legal completions rose by over 7% to 2,930 homes, with an increase in both
private and housing association sales. Of these total completions, 77% were
built on brownfield land. The average sales price increased by more than 6% to
£167,000 and total turnover for the Group advanced by over £57 million to £493.9
million from £436.5 million. Operating profit grew by more than £15 million to
£96.2 million, with the operating margin advancing to 19.5% from 18.5% as the
Group continued to achieve a more balanced trading position between the first
and second halves of our financial year. Net interest payable of £4.5 million is
covered more than 21 times and gearing of 22.6% compares favourably to 31.3% at
this time last year. Profit before tax has increased by 18.5% from £77.4 million
to £91.7 million, a new record for the first six months. Earnings per ordinary
share of 56.5p rose from 47.9p at the same time last year.
Dividend
As part of the Group's policy to bring the interim dividend in line with the
actual trading performance, Bellway is pleased to announce an increase of almost
40% in the interim dividend from 9.3p to 13p per ordinary share. In the absence
of unforeseen circumstances, it is the Board's intention to recommend an
increase in the total dividend for the year of around 25%. Total dividend,
therefore, will have almost doubled in three years.
The dividend will be paid on Friday 1 July 2005 to ordinary shareholders on the
Company's Register of Members at the close of business on Friday 10 June 2005.
The ex-dividend date is Wednesday 8 June 2005.
Trading & Outlook
The calendar year 2004 was one of contrasting halves. In the first half, the
housing market was extremely buoyant, whilst the second half was tempered by
consecutive interest rate rises in May and June which resulted in customers
prolonging their purchase decisions. Against this backdrop, Bellway continued to
sell forward and already has 97% of this year's target secured. The Group has
also been able to maintain a healthy order book which currently stands at £627
million compared to £631 million at the same time last year. In order to
continue this growth in more difficult markets the Group has been working hard
to increase the number of sales outlets which are now some 10% above the level
of a year ago. The calling of a General Election to be held on 5 May and the
attention and uncertainties that such an event attracts may further prolong
buying decisions but with our position for this year close to being secure, we
can work towards strengthening the forward order book for the next financial
year.
Of particular note at the divisional level, we are pleased with the performance
of our East Midlands and West Lancashire divisions where turnover in both cases
will have more than doubled in a three year period. The new South West division,
which started trading only last financial year, has now secured new office
premises south of Bristol, improving the Group's geographical footprint in the
south west. Our Thames Gateway North division will start contributing in the
next financial year and we intend to open further new divisions as the Group
continues to grow organically. This increased operational network should help
Bellway attain its previously stated target of selling 10,000 homes per annum by
2010.
The more challenging marketplace has led to an increasingly selective approach
to land acquisition, nevertheless the land bank with planning permission on 31
January 2005 stood at 21,200 plots, compared to 20,700 plots at 31 July 2004. It
is augmented by land we owned or controlled at 31 January 2005 and is held
subject to the receipt of planning permission. These plots have increased to
15,600 from 14,500 at July 2004, giving an overall land bank of 36,800 plots,
equivalent to more than five year's supply. In addition, we owned or held under
option at 31 January 2005 around 3,000 acres of typically greenfield land, which
we continue to progress through the planning system.
Our growth aspirations are, in part, underpinned by our product profile which is
firmly focused on the lower to middle market as demonstrated by our average
sales price which remains one of the lowest in the industry. Bellway's growing
involvement in the Government's pathfinder projects in Birmingham, Liverpool and
Newcastle will secure a new source of land which will include a high proportion
of housing association and first time buyer sales helping to underpin the
Group's growth plans and provide a solid foundation for the future.
People
These results, as ever, would not be possible without the efforts of our
employees in tandem with our many suppliers, sub-contractors and partners. The
Board wishes to offer its sincere gratitude to everyone concerned.
Future Prospects
Our wide geographical spread and management structure allows us to adapt to
local housing needs which should serve us well as the market returns to a more
normal, sustainable level. The Board is confident of delivering another record
set of results for the year ending 31 July 2005, thereby recording its
fourteenth consecutive year of organic growth. For all these reasons, the Board
remains optimistic about the Group's future prospects.
H C Dawe
Chairman
18 April 2005
BELLWAY p.l.c.
GROUP PROFIT AND LOSS ACCOUNT
Half year ended Half year ended Year
ended
31 January 31 January 31 July
2005 2004 2004
£m £m £m
Turnover 493.9 436.5 1092.6
==== ==== ====
Operating profit 96.2 81.0 213.3
Net interest payable (including associated undertakings) (4.5) (3.6) (7.8)
______ ______ ______
Profit on ordinary activities before taxation 91.7 77.4 205.5
Taxation (27.5) (23.2) (61.7)
______ ______ ______
Profit on ordinary activities after taxation 64.2 54.2 143.8
Dividends on equity and non-equity shares (15.6) (11.4) (29.8)
______ ______ ______
Retained profit 48.6 42.8 114.0
==== ==== ====
Dividend per preference share 4.75p 4.75p 9.5p
Dividend per ordinary share 13.0p 9.3p 25.0p
Earnings per ordinary share - basic 56.5p 47.9p 127.5p
Earnings per ordinary share - diluted 56.0p 47.3p 126.1p
BELLWAY p.l.c.
GROUP BALANCE SHEET
At At At
31 January 31 January 31 July
2005 2004 2004
£m £m £m £m £m £m
Fixed assets
Tangible assets 16.2 16.0 16.6
Investments 0.0 0.1 0.1
______ ______ ______
16.2 16.1 16.7
Current assets
Stocks 1105.7 1020.8 1025.8
Debtors 40.8 36.3 38.2
Cash at bank and in hand 57.9 11.9 111.9
______ ______ ______
1204.4 1069.0 1175.9
______ ______ ______
Creditors due within one year
Bank borrowings (49.0) (40.7) (15.0)
Other creditors (252.8) (255.1) (321.8)
______ ______ ______
Net current assets 902.6 773.2 839.1
______ ______ _____
Total assets less current liabilities 918.8 789.3 855.8
Creditors due after more than one year
Bank borrowings (173.0) (160.0) (160.0)
Other creditors (including provisions for (19.9) (26.5) (20.7)
liabilities and charges)
______ ______ ______
(192.9) (186.5) (180.7)
______ ______ ______
NET ASSETS 725.9 602.8 675.1
==== ==== ====
Capital and reserves
Called up share capital 34.1 34.0 34.0
Reserves and share premium 691.8 568.8 641.1
______ ______ ______
SHAREHOLDERS' FUNDS 725.9 602.8 675.1
==== ==== ====
The interim accounts were approved by the Board of Directors on 18 April 2005.
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 2004 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 2004 in all material respects. These policies
are detailed in the Company's Annual Report and Accounts for that year.
BELLWAY p.l.c.
GROUP CASH FLOW STATEMENT
Half Year ended Half Year ended Year ended
31 January 31 January 31 July
2005 2004 2004
£m £m £m £m £m £m
Net cash (outflow) / inflow from
operating activities
Group operating profit 96.2 81.0 213.3
Depreciation charge 1.6 1.8 3.6
Profit on sale of fixed (0.1) (0.1) (0.3)
assets
(Increase) / decrease in (15.0) (94.0) (170.6)
stocks - Land
- Work in Progress (64.9) (68.8) 2.8
Increase in debtors (2.8) (2.8) (2.3)
(Decrease) / Increase in (58.7) (18.4) 26.5
creditors ______ _______ _____
(43.7) (101.3) 73.0
Net cash outflow from
returns on investments
and servicing of finance
Interest paid (5.6) (3.5) (10.5)
Interest received 1.4 0.6 1.4
Dividends paid - non-equity (0.9) (0.9) (1.9)
______ _______ _____
(5.1) (3.8) (11.0)
Taxation (35.2) (25.5) (54.8)
Net cash outflow from
capital expenditure
and financial investment
Purchase of tangible fixed (1.6) (2.0) (5.9)
assets
Sale of tangible fixed 0.5 0.7 2.3
assets ______ _______ _____
(1.1) (1.3) (3.6)
Equity dividends paid (17.6) (15.4) (25.7)
______ ______ ____
Net cash outflow before (102.7) (147.3) (22.1)
financing
Net cash inflow from
financing
Issue of ordinary share
capital on exercise
of share options 1.8 0.1 1.8
Purchase of own shares by employee (0.1) 0.0 (1.1)
share option plans
(Decrease) / increase in bank loans (13.0) 15.0 15.0
due within one year
Increase in bank loans due 13.0 30.0 30.0
after more than one year _______ _______ _______
1.7 45.1 45.7
_______ _______ _______
(Decrease) / increase in (101.0) (102.2) 23.6
cash in period ======= ======= =======
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