Shares in housebuilder Bellway (BWY) marked modest gains, up 0.3% to £26.35, as it resumed dividend payments and reported full-year profit which while lower year-on-year was still ahead of expectations.

The company declared a final dividend of 50p per share, down from 100p year-on-year. For the year ended 31 July, pre-tax profit fell 64.3% to £236.7 million and revenue slipped 30.7% to £2.2 billion.

Financial performance in the year was ‘significantly’ affected by the Covid-19 pandemic, the company said, with completions down 30.9% to 7,522.

The average selling price of completions rose to £293,054, up from £291,968.

Looking ahead, Bellway said productivity levels were ‘improving and are currently between 85% and 90% of those achieved in the year ended 31 July 2019’.

The forward order book hit record levels as at 4 October with a value of £1.87 billion, up from £1.31 billion year-on-year.


‘Aside from the risk of a further, widespread national “lockdown”, this should help the group complete the sale of around 9,000 homes at an expected average selling price of around £290,000 for the year ending 31 July 2021,” it added.

Davy analyst Colin Sheridan commented: ‘Before exceptional costs, results at Bellway are ahead of our expectations. The company has made a very good start to the current year in terms of trading and appears to be well on track to at least meet our full year volume expectations.

‘The market is in very good health, notwithstanding upcoming changes to Help to Buy and stamp duty. The return of dividend payments will be seen as a positive by the market.’

His counterpart at Liberum, Marcus Cole was similarly impressed commenting: ‘Its order book equates to around 74% of FY21 unit guidance, which provides good visibility on price and volume. Its strong balance sheet and order book has facilitated Bellway to become one of the first housebuilders to reinstate its dividend.’

He added that the company enjoyed ‘balance sheet strength, experienced management and good exposure the strongest areas of the housing market’.


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Issue Date: 20 Oct 2020