Ideal Business Consultants

HOUSEBUILDER Bellway is back in profit and will increase shareholder dividends, it revealed today.

The group, which a regional office in Hunts Cross, achieved revenues of £768.3m in the year to July 31, compared with £683.8m.

Pre-tax profits were £44.4m against £29.8m, but last year it incurred exceptional charges of £66.3m, driving annual results into a £36.55m loss. There were no one-off charges this year.

The firm completed sales on 4,595 homes in 2010, up from 4,380 in 2009, at an average selling price of £163,175, compared with £154,005.

A final dividend for the year will be paid at 6.7p per share, up 0.7p.

Forward orders by September 30 amounted to £397m, against £349.4m in 2009, and net cash of £59m allows the group to “respond effectively to whatever market conditions prevail”, said chairman Howard Dawe.

He added: “Buyer confidence slowly ebbed away during the summer,” but said sales in the early part of autumn have picked up, albeit slightly, as potential homebuyers await the outcome of tomorrow’s comprehensive spending review.

At the start of the year the group had cut debt by £181m and a £43.7m share placing put Bellway on a sound financial footing, it said.

The firm spent £208m on “opportunistic” land buying and now holds 15,000 plots awaiting planning permission, compared with 14,000 in 2009.

Land acquisition has continued with the purchase of 2.25 acres in Cronton, Widnes, for an undisclosed sum, for a new residential development with outline planning consent for 26 homes.

Chief executive John Watson said: “The first two months of the financial year have shown an increase in the number of reservations taken, compared to the summer period, and while encouraging, this level has been below the same period last year.

“Bellway is currently well positioned, nevertheless, having by early October already completed contracted or reserved 2,999 homes for the year to July 31, 2011.”

Liverpool stockbroker Panmure Gordon said today’s results are ahead of expectations in terms of pre-tax profits and earnings per share and current trade is “exactly in line with our expectations”.

Analysts Mark Hughes and Rachael Waring said: “We think that Bellway’s conservative management style represents what we see as a safe pair of hands against an uncertain backdrop.

“Therefore, we maintain our ‘Buy’ recommendation.”

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