Amid the consumer gloom around at the moment, housebuilder Bellway has provided a bit of light.
The company said half year profits had climbed from £19m to £24m and it raised its dividend from 3.3p to 3.7p a share, saying it had exceeded its targets for the period. Chairman Howard Dawe said:
There is no doubt the housing market stuttered through the autumn of 2010 and the inclement weather prior to Christmas had a negative effect on reservation levels.
Since the start of 2011, however, visitors and reservations have returned to the pattern of a traditional spring market, despite a media backdrop of negativity. Consumer confidence remains fragile [but] Bellway is well positioned to deliver increasing returns through a combination of rising volumes, growing average sales prices and improving margins.
Last week's budget announcements regarding our industry are to be welcomed. Our appetite for land purchase continues.
Bellway has released a solid set of interim results this morning. With a positive trend in current trade, we are happy with our full year forecasts. Our target price rises from 737p to 761p.
Not everyone was positive. Peel Hunt issued a sell note and said:
Bellway has upped its guidance for sales volumes but remember guidance has been volatile. Margins are a little below expected levels and the statement is peppered with caveats. Second half growth still needs to be double the underlying so forecasts are unlikely to rise. Valuation based on acceptable returns is high and we remain a seller with target of 490p.
