Pre-tax profit for the year to July 2016 increased 40.6% year-on-year to £497.9m on revenue up 27% to £2.24bn. The firm’s underlying profit margin now stands at 22%, up from 20.4%. In the nine weeks since 1 August, the house builder took around 162 reservations per week, an increase of 9% compared to the same period last year.
Although following the publication of the results the Newcastle headquartered firm did warn of possible price increases from its suppliers as a result of the weakness in the pound.
Canaccord Genuity reiterates its 'buy' recommendation and £23.50 price target – highlighting the generous dividend yield on offer (more than 4.5%).
'It appears that management is guiding for modest growth in PBT for the current FY which is significantly higher than the consensus average, which is dragged down by some low bear cases,' the broker comments. 'All eyes will now turn to the momentum expected in the Spring selling season.'