Strong revenue growth from Bellway

Companies: Bellway

UK housebuilder Bellway has this morning closed its books on another year of strong performance, reporting revenue growth of 27%, with gross profit up 34.3%, EPS up 42%, and announcing a whopping 42% increase in its dividend to 108p (4.6% yield) for FY16.
The group's total revenue rose 26.9% to £2.24bn as house sales increased 12.5% to 8,721, which, combined with a 12.9% rise in the average UK house selling price to £252k (from £223k), helped the firm achieve record results and a seventh successive year of volume growth. 
Bellway Results

The FTSE 250 company's operating margin was 22% (up from 20.4% last year), whilst earnings per share was 328.7p, giving an excellent earnings yield of 14.5%. 
The company maintained that its disciplined approach towards investing has seen a strong return on capital employed, rising to 28.2% from 23.9% last year. It also said that its controlled investment would deliver future growth, with nearly 10,000 new plots contracted in the year, and 6 new operating divisions opened in the past three years
The company finished the period with a greatly enhanced balance sheet with net cash of £26.5m up from a debt of £38.5m last year.
Chairman John Watson said Bellway had delivered another record year, and had increased the number of new homes sold, resulting in a substantial growth in earnings:
"The excellent operating performance has facilitated further investment into the business and has enabled the Board to propose a final dividend of 74.0p per share, bringing the total dividend for the year to 108.0p per share.
The long term outlook continues to be positive, supported by strong customer demand, a substantial forward order book and favourable trading conditions across all areas of the country where Bellway operates.  Whilst there is some uncertainty following the result of the EU referendum, trading since that date has remained resilient.  
Bellway has invested significantly in high quality land opportunities and infrastructure over recent years.  As a result, with its strong balance sheet and structure of nineteen operating divisions, the Group is well placed to deliver additional value for shareholders through further disciplined volume growth in the current financial year."


The information contained within this post is based on personal experience and opinion and should not be considered as a recommendation to trade nor financial advice.