Bellway posted revenues of £1,148.5m for the half year ended 31 January 2017, a +5.9% on the £1,084m recorded for the same period last year. Profit before tax was up 9.3% at 2247.6m.
The housebuilder said that the number of homes sold for the full financial year is expected to rise by at least 5%. The average selling price is expected to rise to around £260,000 for the full year, compared to £252,793 for 2016. The operating margin for the full financial year is expected to be maintained at around 22%.
“The emphasis on volume growth, together with a further rise in the operating margin, has resulted in earnings increasing by over 10% to 163.9p per share, the highest achieved by the Group in a first half trading period,” said Bellway Chairman, John Watson. “The reinvestment of retained profits into new developments is having a compounding effect on earnings and dividend growth.
“As a result of the strong trading performance, I am pleased to announce that the interim dividend will increase in line with earnings, by over 10% to 37.5p per share. The interim dividend has risen by 134% in the three years since January 2014, over which time the Group has paid out dividends equivalent to 237p per share.
“In addition to the payment of a regular dividend, the net asset value per ordinary share (‘NAV’) of the Group has risen by 566p to 1,612p per share over the same three-year period. Taken together, this represents a total growth in value of 803p per share and an accounting return of almost 21% per annum. This demonstrates the substantial returns generated for our shareholders as a result of the Group’s ongoing and disciplined growth strategy.
“For the foreseeable future, the Board expects to maintain a full year dividend cover of around three times earnings as sufficient land opportunities remain available that meet or exceed the group’s required returns, resulting in further value creation for shareholders. Bellway does, however, retain the ability to amend dividend cover should there be a substantial change in market conditions.”