Bellway gets round Brexit with profit and dividend leap

Housebuilder Bellway said trading since the Brexit vote has 'remained resilient' as it yesterday posted soaring profits amid a jump in the number of homes sold and average selling price.

Bellway said shareholders were in line for a 40.3% hike in their total dividend. Picture: Daniel Lynch/Newscast/Handout/PA
Bellway said shareholders were in line for a 40.3% hike in their total dividend. Picture: Daniel Lynch/Newscast/Handout/PA

The Newcastle-based firm, which has a Scottish divisional office in Hamilton, said pre-tax profit jumped by 40.6 per cent to £497.9 million in the year to 31 July, while the proposed total dividend per share rose by 40.3 per cent to 108p.

Chairman John Watson said it “delivered another record year, further increasing the number of new homes sold, which has resulted in a substantial growth in earnings”.

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Revenues were 26.9 per cent higher at £2.24 billion, as the number of homes it sold increased 12.5 per cent to 8,721 and the average selling price lifted 12.9 per cent to £252,793.

The results came as official figures also showed UK house prices shrugged off the Brexit vote, rising by 8.4 per cent in the 12 months to August to £219,000, up by 1.3 per cent on the previous month.

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In terms of the Brexit vote, the group acknowledged that it “cast some uncertainty with regards to the wider economic outlook” but added that reservations net of cancellations from 23 June to 31 July were “reassuringly” 13 per cent ahead of the year-ago period.

Looking beyond the end of the reporting period, Bellway said interest rate cuts and moves by the Bank of England to bolster borrowing following the vote to leave the EU should keep supporting the property market.

Weekly reservations have remained robust in the first nine weeks since its year-end, a year-on-year jump of 9 per cent to 162, just under the 10 per cent growth rate seen in the past financial year.

Watson said: “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.”

Analysts at Numis said Bellway had delivered another “solid” set of results and pencilled in another 3 per cent rise in selling prices of its homes over the year ahead, with a 4 per cent rise in sales by volume.

The housebuilder said in August that it was continuing to expand in the east of Scotland by purchasing land with a development value of £120m to create a further 600 “much-needed” homes.