Pre-Close Trading Update and Board Changes
Bellway p.l.c.
Pre-Close Trading Update and Board Changes
7 August 2012
Bellway p.l.c. is today issuing a pre-close trading update for the financial
year ended 31 July 2012 and is also updating the market on forthcoming Board
changes.
Trading Update
The Group has completed the sale of 5,226 homes, an increase of 6.2% compared
with the previous year's total of 4,922, with this growth being derived
primarily from completions of private homes, which have risen by 13.4% to 4,358
(2011 - 3,843). The greater proportion of private completions, combined with
other changes in product and geographical mix, have resulted in the average
selling price increasing by more than 6% from £175,613 to around £187,000. The
operating margin for the full year will be at least 11% (2011 - 8.5%),
representing continued growth compared with the 10.1% achieved in the first
half of the financial year and, as a result, profit before tax will be modestly
ahead of current consensus of £98 million.
The demand for new homes has remained resilient throughout the year and this,
combined with investment in new site openings, has resulted in the Group
securing an average of 101 reservations per week (2011 - 93), an improvement of
almost 9% on the previous financial year. The enhanced reservation rate has
been achieved with no overall increase in average sales incentives, whilst
simultaneously restricting the use of shared equity schemes to less than 7% of
reservations taken. The Government's NewBuy scheme has contributed 133
reservations in the 20 weeks since its launch on 12 March 2012. The longer-term
effectiveness of this incentive, however, remains dependent on lenders' product
affordability and credit scoring criteria.
Total reservations in the nine weeks since the Interim Management Statement
(`IMS') on 8 June have followed the usual seasonal slowdown but remain ahead of
the same period last year. The order book has grown in value by 3.4% to £441.2
million (2011 - £426.8 million), representing 2,533 homes (2011 - 2,497 homes).
The Group has continued to be active in the land market, especially in the
south of England, having spent £305 million on land and land creditors (2011 -
£250 million) with heads of terms agreed on a further 4,650 plots. As a
consequence, the Group ended the year with net bank debt of £41 million (2011 -
£3.4 million net cash). With committed bank facilities of £300 million, Bellway
is well placed to pursue further opportunities in the land market, whilst
maintaining strict disciplines in terms of both return on capital and margin.
Against this background, and assuming stability in both the mortgage market and
employment conditions, the Group is in a strong position to continue to deliver
its strategy of growth in volume, average selling price and operating margin
through a combination of changes in mix and the introduction of newly acquired
higher margin land.
Board Changes
The current Non Executive Chairman Howard Dawe, who has been with the Group
since 1961, is to retire on 31 January 2013. He will be succeeded in this role
by the current Chief Executive, John Watson, who will be stepping down from his
current role on the same date, thereby continuing his 34 years service with the
Group. John will be replaced as Chief Executive with effect from 1 February
2013 by Ted Ayres.
Ted has spent his whole career in the construction and housebuilding industry,
having occupied senior roles within the Group since joining Bellway in January
2002. These roles have included Managing Director of Thames Gateway division,
Southern Regional Chairman, and latterly, the Board position of Operations
Director.
The Board would like to wish John and Ted every success in their new roles and
would like to thank Howard for all his efforts on behalf of the Group over the
last fifty years, wishing him and his family a long and well deserved
retirement.
The Group will announce its Preliminary Results for the year ended 31 July 2012
on Tuesday 16 October 2012.
FOR FURTHER INFORMATION PLEASE CONTACT:
JOHN WATSON, CHIEF EXECUTIVE AND KEITH ADEY, FINANCE DIRECTOR FROM 7:30 ONWARDS
ON 0191 217 0717.
Certain statements in this announcement are forward-looking statements which
are based on Bellway p.l.c.'s expectations, intentions and projections
regarding its future performance, anticipated events or trends and other
matters that are not historical facts. Such forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts. Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", or other words of similar meaning. These statements are not
guarantees of future performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
Given these risks and uncertainties, prospective investors are cautioned not to
place undue reliance on forward-looking statements. Forward-looking statements
speak only as of the date of such statements and, except as required by
applicable law, Bellway p.l.c. undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
Latest directors dealings
- 38 minutes ago Pipehawk
- 38 minutes ago Frasers Group
- 38 minutes ago DP Aircraft I Limited Pref
- 38 minutes ago Cropper (James)
- 14 hours ago Oxford Nanopore Technologies