RNS Number : 3230Q
Bellway PLC
18 October 2011
 



NATIONAL HOUSEBUILDER BELLWAY p.l.c. TODAY, TUESDAY 18 OCTOBER, ANNOUNCE THEIR PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JULY 2011.

 

 

 

 

             

HIGHLIGHTS

 

·    Completed sales of 4,922 homes (2010 - 4,595)

·    Average price achieved £175,613 (2010 - £163,175)

·    Total Group turnover of £886.1m (2010 - £768.3m)

·    Profit before taxation £67.2m (2010 - £44.4m)

·    Earnings per ordinary share of 41.5p (2010 - 29.7p)

·    Final dividend for the year 8.8p (2010 - 6.7p)

·    Forward order book at 30 September of £418.8m (2010 - £396.7m)

 

 

 

 

 

 

 

Chairman Howard Dawe said "against a backdrop of ongoing economic uncertainty"….the Group…. "has performed very well in the year ended 31 July 2011".

 

He continued "with profit before tax rising by just over 50%, the Board has decided to increase the final dividend by just over 30%".  Furthermore "the Group's average weekly reservation rate rose during the early part of 2011 and did not fall until the summer months"…. "a typical pattern for a normal housing market" and "…..reservations in the first nine weeks of the new financial year are almost 11% ahead of the same period last year".

 

He concluded "Bellway aims to continue to increase both volumes and average selling prices, the latter by way of ongoing changes in the product mix.  This, combined with the improvement in the operating margin, should ensure that shareholder value continues to be enhanced".

 

 

 

 

 

 

FOR FURTHER INFORMATION, PLEASE CONTACT JOHN WATSON, CHIEF EXECUTIVE OR ALISTAIR LEITCH, FINANCE DIRECTOR.

 

TUESDAY 18 OCTOBER - THURSDAY 20 OCTOBER

J WATSON: 07855 337007

A LEITCH: 07855 337001

THEREAFTER: 0191 217 0717

 

 

 

 

 

 

 

CHAIRMAN'S STATEMENT

 

Introduction

In my statement last year I referred to the lessons learnt by the Board during previous downturns, and these lessons continue to be applied in what remain testing times for the UK housebuilding industry.  Against a backdrop of ongoing economic uncertainty, the housing market has stabilised and the Group, in general, has performed very well in the year ended 31 July 2011.  With profit before tax rising by just over 50%, the Board has decided to increase the final dividend by just over 30%.  Bellway has an uninterrupted record of paying dividends since 1979, which is unique in the UK housebuilding industry.

 

Trading and Results

After a relatively slow start to the financial year and poor weather conditions prior to Christmas, the Group's average weekly reservation rate rose during the early part of 2011 and did not fall until the summer months, thereby returning to a typical pattern for a normal housing market.  During the year, the Group legally completed the sale of 4,922 homes, an increase of just over 7% compared to the previous year, at an average selling price of £175,613, an increase of almost 8%.  These two factors, combined with other revenue of £21.7 million, mean that turnover for the Group has grown in the year from £768.3 million to £886.1 million, an increase of just over 15%.  The operating margin has risen from 6.7% to 8.5% for the full year and, in the second half rose to 9.8%, thereby increasing operating profit to £75.2 million from £51.3 million in the previous year.  Net finance charges total £8.0 million compared to £6.8 million last year.  As a consequence, profit before tax has increased by 51.2% to £67.2 million from £44.4 million in 2010.  Basic earnings per share have increased to 41.5p from 29.7p and the net asset value per ordinary share grew by almost 4% from 856p to 888p at 31 July.  At the end of the financial year the Group had £3.4 million of net cash and £290 million of facilities with its banking partners. 

 

Dividend

The Board is proposing to increase the final dividend from 6.7p to 8.8p, a rise of 31.3%, producing a total dividend for the year of 12.5p, up 25% from 10p in 2010.  This dividend, which is covered over 3.3 times, will be paid on Wednesday 18 January 2012 to all ordinary shareholders on the Register of Members on Friday 16 December 2011.  The ex-dividend date is Wednesday 14 December 2011. 

 

Employees, Sub-contractors and Suppliers

I would like to express the Board's gratitude to all its employees, sub-contractors, suppliers and other partners for their efforts in what has been another encouraging but challenging year for the Group. 

 

Board Changes

Peter Stoker retired as Commercial Director on 31 July and was replaced by Ted Ayres in the new role of Operations Director.  Ted joined the Group in 2002, firstly as Managing Director of our Thames Gateway division and since 2006 has held the position of Southern Regional Chairman.

 

Alistair Leitch, our Finance Director since 2002, has decided to retire on 31 January 2012 and he will be replaced by Keith Adey, the Group Chief Accountant. 

 

On behalf of the Board, I would like to thank Peter and Alistair for their significant contributions to the Group over many years and welcome Ted and Keith to the Board, and wish them every success in their new roles.

 

Outlook

Whilst developments in and around London, where we presently operate from about 35 sites, have been the most resilient, there are many areas throughout the rest of the country where activity has also been encouraging.  Reservations in the first nine weeks of the new financial year are almost 11% ahead of the same period last year, and at 30 September the Group had an order book of £418.8 million (2010 - £396.7 million).  We continue to focus on rebuilding the Group's operating margin and anticipate it rising further, primarily from an increased contribution from recently acquired land.

 

Bellway aims to continue to increase both volumes and average selling prices, the latter by way of ongoing changes in the product mix.  This, combined with the improvement in the operating margin, should ensure that shareholder value continues to be enhanced.  The Board is confident of delivering these improvements over the next twelve months but, as ever, remains mindful of current economic uncertainties.

 

 

H C Dawe

Chairman

17 October 2011



Chief Executive's Operating Review

 

Background

At the beginning of the financial year the market place had stabilised but a degree of uncertainty had been created by the looming austerity measures to be proposed in the Government's Comprehensive Spending Review.  The number of 'down-valuations' received from mortgage providers was reducing and cancellations from customers who had reserved a new home remained at around 13%, with no change to the level of incentives being offered on new homes.  Despite the uncertainty, the challenge faced by the Group was simply to improve profitability and shareholder returns.  To do this a three pronged strategy was implemented aimed at increasing volumes, raising average selling prices and lifting operating margins. 

 

Sales Volumes and Pricing

The first six months of the financial year saw an average sales rate of 80 homes per week, a slight reduction compared to the previous year, but severe weather conditions before Christmas slowed visitor and sales rates further.  First time buyers, in particular, continued to face major obstacles in gaining access to mortgage products.  The strong brought forward sales position on 1 August 2010, however, enabled the Group to complete the sale of 2,332 homes in the first six months of the financial year, compared to 2,247 in the previous year.  Furthermore, our order book by 31 January remained healthy at £402.3 million. 

 

With the onset of the new calendar year and improved weather conditions, sales reservation rates began to rise, culminating in an average sales rate in the second half of the year of 106 homes per week.  This increased rate was supported by the opening of more selling outlets and, consequently, the number of legal completions in the second half of the year increased by 10%, to 2,590, compared to the previous year.  The turnover from 4,922 homes sold in the full year was £864.4 million, producing an average selling price of £175,613, up 7.6% from £163,175 in the previous year.  The increase in the average selling price was achieved by a combination of factors, including the completion of several high value developments in and around London where the average selling price was in excess of £250,000 and by a change in the product mix outside London where apartments have been replaced by higher value family homes. 

 

In achieving this increase in volume and pricing, customers were regularly incentivised, which ranged from simple discounting to the use of our part exchange arrangements.  The latter was employed in 13%, or 630, of our legal completions, which is 137 more transactions than the previous year.  The Group's part exchange stock, however, increased from 115 homes to 175 homes by 31 July with a value of around £23.3 million.

 

Due largely to the ongoing lack of accessible mortgages for first time buyers, shared equity schemes have become popular in recent years and these arrangements were employed in 10% of legal completions during the year.  The use of this selling aid, however, has fallen from 18% in the previous year, as the Government's original HomeBuy Direct initiative came to an end in September 2010.  At 31 July, Bellway held £33.5 million of this type of asset on its balance sheet which represents just under 50% of the original deferred sums due from home purchasers. 

 

Operating Margins and the Cost Base

The operating margin also continued to improve and moved up to 8.5%, an increase from 6.7% in the prior year.  This improvement is the consequence of several different elements but is being achieved primarily through a combination of a growing output from newly acquired land where gross margins are in excess of 20% and also efficient management of the Group's cost base.  In addition, we are gradually trading out of the older sites with lower margins.  The new sites contributed some 27% of our legal completions during the course of the financial year and as this percentage increases there should be a continuing improvement in the operating margin. 

 

With regard to the cost base, as the production of new homes, nationally, remains low, competition for work remains high amongst our sub-contractors and suppliers.  Whilst there are many inflationary and regulatory pressures at all levels in the house building process, our costs overall have not seen any substantial increases during the course of the year and this has helped to support the increase in the operating margin.  The majority of materials used in building a new home are negotiated with national suppliers on a fixed price basis, typically for 12 months or more, and this helps to smooth out short term fluctuations in material prices.  Whilst labour rates vary from region to region, our strong order book provides visibility of workload for sub-contractors, providing the Group with a strong negotiating platform.  As a result, the cost of labour intensive activities such as road, sewer and foundation works have remained relatively stable throughout the year. 

 

Looking back over the last two to three years we estimate the cost of building an average sized home has fallen by around 8%.  Challenges in future to the cost base will come in the shape of higher planning fees and the costs involved in reducing CO2 emissions.  During the course of the year, approximately 1,000 homes had either solar or photovoltaic panels installed and three blocks of apartments were built with a heating plant installed in the basement, fuelled by wood chip as its main heating source.   Such new technology does put pressure on costs and one of our main challenges is to manage this process whilst maintaining product efficiency and without negatively affecting operating margins.

 

Divisional Performance

Many commentators talk about a current north/south divide in the housing market but our six northern divisions legally completed 2,345 homes, an increase of 18% compared to the previous year.  Almost half of this volume increase was delivered by the West Midlands division which achieved 500 legal completions in the year, a similar volume to the North East division which consistently achieves this level of output. 

 

The average selling price of the homes legally completed in the north remained broadly static compared to 2010, with the North East division having the highest average selling price of £167,592.  Conversely, the southern divisions' average selling price increased by 13.1% to £203,973 but sales volumes remained broadly static at 2,577.  The Thames Gateway division, following the completion of some high rise apartment blocks in the east end of London and Greenwich Peninsula, has seen average selling prices increase since last year by almost 40% to £212,694.  Developments such as these benefit from a more diverse marketing strategy with buyers from the Far East, in particular, being prepared to buy off-plan at an early stage in the construction process. 

 

Out of the total number of new homes legally completed, only 339 were acquired by housing associations in the north compared with 740 in the south.  Housing associations are prepared to acquire homes in London and its suburbs over and above the normal planning obligations, creating a more diverse market place, which does influence our thinking when it comes to land buying. 

 

Buying off-plan is unusual in these current market conditions and the Group has not only increased its work in progress levels on a number of sites to create "street scenes", it has also increased the number of show homes by 13% to enable potential customers to view our finished product.  

 

Targeting Land Buying

Bellway ended the financial year in a net cash position of £3.4 million having expended £250 million on land and land creditors during the year.  The majority of this expenditure was in the south, most notably sites at Stepney in east London for 350 homes and a redundant hospital in Carshalton, Surrey for 180 homes.  Further investment in the north has also taken place, for example, a site only five miles north of Newcastle city centre gained planning permission, on appeal, for 330 homes.  A premier league football club's former training ground was acquired in the North West and planning permission has been granted for 80 detached homes.  The average selling price of £400,000 will bring a welcome boost to that division's current average selling price of £133,863.  Land previously held under option near Leicester was eventually granted planning approval for 200 homes.  All the aforementioned sites will contribute towards the 2011/12 financial year output.  Land acquisitions during the year continue to be subject to approval by our head office team, in conjunction with the Regional Chairmen, and this process ensures that our margin disciplines are not compromised.    

 

At 31 July 2011, as a result of adding 5,406 plots, the land owned with planning permission has increased to 18,086 plots.  In addition, land owned or controlled pending a planning permission represents a further 13,000 plots.  Long term land, typically held under option, amounts to over 3,000 acres, where we now have some 1,600 plots with planning applications submitted, awaiting the outcome of the planning process.

 

This land bank provides the Group with new sales outlets but it is unrealistic, given current market conditions, to assume that the sales rate per outlet will increase.  To fulfil our growth aspirations, therefore, the focus has been, and will continue to be, whilst current market conditions persist, the opening of more selling outlets.  The Group ended the year operating from 205 outlets, having started with 185 and, with the benefit of a strong balance sheet, we are in a good position to increase our land bank and sales outlets in the future.

 

The Environment and Health and Safety

Increasing site activity needs to be combined with minimising the environmental effects, with waste management continuing to be one of our priorities.  Divisions work in conjunction with their sub-contractors to minimise waste and maximise recycling and this year we used 16,936 waste skips compared to 17,375 last year, which represents a reduction in skips per home sold of 9%.  Wherever possible we attempt to re-use demolition waste on our sites, typically under hard standing or landscaping areas.  All timber products such as roof trusses and floor beams are procured from sustainable sources, and underground drainage systems are now being procured where the pipe work is manufactured using 50% recycled UPVC materials, thereby reducing the use of crude oil in the manufacturing process.  The introduction of new building regulations has resulted in more homes being tested for air retention which, in turn, helps reduce CO2 emissions by 25%, compared to homes constructed under previous regulations.

 

Whilst the grant of planning permission can be controversial within a local community, there are often significant benefits which follow as a result of signing planning agreements.  This year we estimate more than £30 million will be spent on local improvements in terms of transport, education and health care facilities in relevant local authority areas.  For example, at Barking Riverside in east London, in conjunction with our partner, the Homes and Communities Agency, a multi-million pound contribution was made to facilitate the construction of a new primary school and community facilities, which opened in September 2011. 

 

A safe working environment for our employees, sub-contractors and suppliers is of prime concern.  In this financial year I am pleased to report a 19% reduction in the over three day absence accident ratio on Bellway's building sites.

 

Putting the Customer First

Revised customer care procedures were implemented at the start of the financial year to improve practice, process and work methods and increase the level of supervision in relation to quality control.  As a result of these changes, greater communication now takes place with customers after they have moved into their new home.  A new benchmark has been introduced whereby we are striving to resolve customer complaints within 7 days of notification.  Furthermore in an effort to improve our out of hours, seven days a week emergency service, a new national helpline for our customers has been introduced.  

 

We continue to employ an independent consultant to survey our client base and in our latest survey to the end of June 2011, reported that 91% of clients "Would Recommend a Friend" to buy a Bellway home compared with 86% the previous year.  Hopefully, the new measures introduced at the start of the financial year will prove beneficial, resulting in a higher percentage of satisfied customers in years to come. 

 

Outlook

At the beginning of the new financial year the Group held 2,497 reservations.  In the first nine weeks of the new financial year, which includes a typically quiet August period, reservations are almost 11% ahead of the same period last year.  Whilst global economic conditions remain uncertain the Group continues to focus on the delivery of the same three pronged strategy of increasing volume, average selling price and operating margin.  Bellway has started the year with 205 sales outlets and, subject to necessary planning consents, we are targeting to increase this, and consequently volumes, by up to 5% during the course of the current financial year.  The combination of product mix between houses and apartments is unlikely to change drastically, but as new outlets come on to the market we anticipate that average selling prices and operating margins will improve further.  Delivery of these improvements, combined with a strong balance sheet and healthy forward order book, will place Bellway in a position to further enhance shareholder return in the future.

 

  

J K Watson

Chief Executive

17 October 2011

 

 

 

 

 



GROUP INCOME STATEMENT

For the year ended 31 July 2011

 


Notes

2011

2010



£000

£000





Revenue

2

886,095

768,341

Cost of sales

 

4

(766,717)

(678,547)









Gross profit


119,378

89,794

Administrative expenses


(44,168)

(38,539)








Operating profit


75,210

51,255





Finance income


1,774

2,281





Finance expenses


(9,822)

(9,103)









Profit before taxation


67,162

44,433





Income tax expense

3

(17,018)

(8,620)

 

Profit for the year *


 

50,144

 

35,813





* all attributable to equity holders of the parent
















Earnings per ordinary share - Basic

6

41.5p

29.7p

Earnings per ordinary share - Diluted

6

41.4p

29.6p

 

GROUP Statement of comprehensive Income

For the year ended 31 July 2011

 



2011

2010



£000

£000





Profit for the period


50,144

35,813





Other comprehensive income




Actuarial gains on defined benefit pension plans


761

1,891

Income tax on other comprehensive income


(587)

(582)





 

Other comprehensive income for the period, net of income tax


 

174

 

1,309

 

Total comprehensive income for the period *


 

50,318

 

37,122





* all attributable to equity holders of the parent




 

 

 

 

 

 

 

GROUP STATEMENT OF CHANGES IN EQUITY

At 31 July 2011

 


Notes

Issued capital

Share premium

Other reserves

Retained earnings

Total

Non-controlling interest

Total equity



£000

£000

£000

£000

£000

£000

£000










Balance at 1 August 2009


14,375

117,198

1,492

832,013

965,078

(66)

965,012










Total comprehensive income for the period









Profit for the period


-

-

-

35,813

35,813

-

35,813

Other comprehensive income *


-

-

-

1,309

1,309

-

1,309

 

Total comprehensive income for the period


 

-

 

-

 

-

 

37,122

 

37,122

 

-

 

37,122










Transactions with shareholders recorded directly in equity:









Dividends on equity shares

 

5

-

-

-

(11,221)

(11,221)

-

(11,221)

Shares issued


728

43,365

-

-

44,093

-

44,093

Credit in relation to share options and tax thereon


 

-

 

-

 

-

 

1,569

 

1,569

 

-

 

1,569

Purchase of own shares


-

-

-

(1,777)

(1,777)

-

(1,777)

Total contributions by and distributions to shareholders


 

728

 

43,365

 

-

 

(11,429)

 

32,664

 

-

 

32,664










 

Balance at 31 July 2010


 

15,103

 

160,563

 

1,492

 

857,706

 

1,034,864

 

(66)

 

1,034,798










Total comprehensive income for the period









Profit for the period


-

-

-

50,144

50,144

-

50,144

Other comprehensive income *


-

-

-

174

174

-

174

 

Total comprehensive income for the period


 

-

 

-

 

-

 

50,318

 

50,318

 

-

 

50,318










Transactions with shareholders recorded directly in equity:









Dividends on equity shares

 

5

-

-

-

(12,543)

(12,543)

-

(12,543)

Shares issued


2

79

-

-

81

-

81

Credit in relation to share options and tax thereon


 

-

 

-

 

-

 

1,213

 

1,213

 

-

 

1,213

Purchase of own shares


-

-

-

(559)

(559)

-

(559)

Total contributions by and distributions to shareholders


 

2

 

79

 

-

 

(11,889)

 

(11,808)

 

-

 

(11,808)










 

Balance at 31 July 2011


 

15,105

 

160,642

 

1,492

 

896,135

 

1,073,374

 

(66)

 

1,073,308

 

  * additional breakdown is provided in the Group Statement of Comprehensive Income.

 

 

GROUP BALANCE SHEET

At 31 July 2011

 


Notes

2011

2010



£000

£000

ASSETS




Non-current assets




Property, plant and equipment


9,023

8,216

Investment property


8,880

7,716

Other financial assets


33,491

32,664

Deferred tax assets


3,683

3,694







55,077

52,290





Current assets




Inventories

 

4

1,270,292

1,148,713

Trade and other receivables


62,176

45,801

Cash and cash equivalents

 

7

83,412

145,689







1,415,880

1,340,203





Total assets


1,470,957

1,392,493









LIABILITIES




Non-current liabilities




Interest bearing loans and borrowings


85,000

100,000

Retirement benefit obligations


8,401

8,736

Trade and other payables


31,218

20,299

Deferred tax liabilities


66

166







124,685

129,201





Current liabilities




Interest bearing loans and borrowings


15,000

-

Corporation tax payable


11,836

2,842

Trade and other payables


246,128

225,652







272,964

228,494





Total liabilities


397,649

357,695













Net assets


1,073,308

1,034,798









EQUITY




Issued capital


15,105

15,103

Share premium


160,642

160,563

Other reserves


1,492

1,492

Retained earnings

 

8

896,135

857,706





Total equity attributable to equity holders of the parent


1,073,374

1,034,864

Non-controlling interest


(66)

(66)





Total equity


1,073,308

1,034,798





Approved by the Board of Directors on 17 October 2011 and signed on its behalf by  

 

 

Howard C Dawe                                                     Alistair M Leitch

Director                                                                   Director

 

 

GROUP CASH FLOW STATEMENT

For the year ended 31 July 2011

 


Notes

2011

2010



£000

£000





Cash flows from operating activities




Profit for the year


50,144

35,813





Depreciation charge


1,695

1,659

Profit on sale of property, plant and equipment


(262)

(184)

Profit on sale of investment properties


(27)

(39)

Finance income


(1,774)

(2,281)

Finance expenses


9,822

9,103

Share-based payment charge


957

1,372

Income tax expense


17,018

8,620

(Increase) / decrease in inventories


(121,579)

62,638

Increase in trade and other receivables


(19,175)

(15,869)

Increase / (decrease) in trade and other payables


29,879

(33,602)





Cash from operations


(33,302)

67,230





Interest paid


(5,553)

(2,534)

Income tax (paid) / received


(8,444)

7,484





Net cash (outflow) / inflow from operating activities


(47,299)

72,180





Cash flows from investing activities




Acquisition of property, plant and equipment


(2,588)

(1,763)

Acquisition of investment properties


(1,230)

(657)

Proceeds from sale of property, plant and equipment


351

322

Proceeds from sale of investment properties


185

262

Interest received


1,322

1,049





Net cash outflow from investing activities


(1,960)

(787)





Cash flows from financing activities




Proceeds from issue of share capital on share placing


-

43,658

Proceeds from the issue of share capital on exercise of share options 


81

435

Purchase of own shares by employee share option plans


(559)

(1,777)

Dividends paid


(12,540)

(11,230)





Net cash (outflow) / inflow from financing activities


(13,018)

31,086





Net (decrease) / increase in cash and cash equivalents


(62,277)

102,479





Cash and cash equivalents at beginning of year


145,689

43,210





Cash and cash equivalents at end of year

 

7

83,412

145,689









 

NOTES

 

1.   Basis of preparation

 

The financial information set out above has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") as adopted by the EU ("Adopted IFRSs").

 

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 July 2011 or 2010.  Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

2.   Segmental analysis

 

The Board regularly reviews the Group's performance and balance sheet position for its entire operations, which are based in the UK, and receives financial information for the UK as a whole.  As a consequence the Group has one reportable segment which is UK house building.

 

As there continues to be only one reportable segment whose revenue, profits, expenses, assets, liabilities and cash flows are measured and reported on a basis consistent with the Group financial statements, no additional numerical disclosures are necessary.

 

3.   Taxation

 

The effective rate of taxation for the year is 25.3% (2010 - 19.4%).  The taxation charge for the years ended 31 July 2011 and 31 July 2010 is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period.  The lower effective tax rate in the current year is principally due to finalisation of prior year land remediation claims.

 

4.   Exceptional items

 

Exceptional items are those which, in the opinion of the Board, are material by size or nature, non-recurring, and of such significance that they require separate disclosure on the face of the income statement.

 

A full review of inventories was performed at 31 July 2011 and the carrying value of land was compared to the net realisable value.  Net realisable value represents the estimated selling price (in the ordinary course of business) less all estimated costs of completion and attributable overheads.  Estimated selling prices were reviewed on a site by site basis and selling prices were amended based on local management and the Board's assessment of current market conditions.  No exceptional land write downs or land write backs were required as a result of this review.

 

There were no exceptional items in the year ended 31 July 2010.

 

5.   Dividends on equity shares

 


2011

2010


£000

£000




Amounts recognised as distributions to equity holders in the year :






Final dividend for the year ended 31 July 2010 of 6.7p per share (2009 - 6.0p)

8,096

7,238

Interim dividend for the year ended 31 July 2011 of 3.7p per share (2010 - 3.3p)

4,471

3,987

Dividends forfeited

(24)

(4)





 

12,543

 

11,221




Proposed final dividend for the year ended 31 July 2011 of 8.8p per share (2010 - 6.7p)

10,635

8,096

 

The 2011 proposed final dividend is subject to approval by shareholders at the Annual General Meeting on 13 January 2012 and, in accordance with IAS 10, has not been included as a liability in these financial statements.

 

6.   Earnings per ordinary share

 

Basic earnings per ordinary share is calculated by dividing earnings by the weighted average number of ordinary shares in issue during the year (excluding the weighted average number of ordinary shares held by the employee share ownership plans which are treated as cancelled).

 

Diluted earnings per ordinary share uses the same earnings figure as the basic calculation except that the weighted average number of shares has been adjusted to reflect the dilutive effect of outstanding share options allocated under employee share schemes where the market value exceeds the option price. It is assumed that all dilutive potential ordinary shares are converted at the beginning of the accounting period.  Diluted earnings per ordinary share is calculated by dividing earnings by the diluted weighted average number of ordinary shares.

 

Reconciliations of the earnings and weighted average number of shares used in the calculations are outlined below:

 

 

Earnings

Weighted average number of ordinary shares

Earnings per share

Earnings

Weighted average number of ordinary shares

Earnings per share


2011

2011

2011

2010

2010

2010


£000

no.

p

£000

no.

p








For basic earnings per ordinary share

50,144

120,705,397

41.5

35,813

120,619,800

29.7

Dilutive effect of options and awards


462,722

(0.1)


549,620

(0.1)








For diluted earnings per ordinary share

50,144

121,168,119

41.4

35,813

121,169,420

29.6

 

 

7.   Analysis of net cash / (debt)

 


At 1 August

Cash

At 31 July


2010

flows

2011


£000

£000

£000





Cash and cash equivalents

145,689

(62,277)

83,412

Bank loans

(80,000)

-

(80,000)

Preference shares redeemable after more than one year

(20,000)

-

(20,000)





Net cash / (debt)

45,689

 

(62,277)

(16,588)

 

8.   Reserves

Own shares held

 

The Group holds shares within the Bellway Employee Share Trust (1992) (the "Trust") for participants of certain share-based payment schemes.  During the period the Trust made a market purchase of 100,000 (2010 - 248,955) shares at an average price of 559p (2010 - 714p) and transferred 95,473 (2010 - 148,955) shares to employees.  The number of shares held within the Trust, and on which dividends have been waived, at 31 July 2011 was 104,527 (2010 - 100,000).  These shares are held within the financial statements at a cost of £0.584 million (2010 - £0.601 million).  The market value of these shares at 31 July 2011 was £0.690 million (2010 - £0.580 million).

 

 

 

 

 

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.

 

 

 


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