Bellway looks on bright side as profits fall

HOUSEBUILDER Bellway has said it is well positioned for the future, despite the fact it saw an 82 per cent fall in full-year profits last year. <br /><br />The group said its pre-tax profits in the year to end-July were &pound;29.8m, compared to &pound;165.7m in the previous year, but this was slightly ahead of market expectations.<br /><br />Including exceptional items, there was a pre-tax loss of &pound;36.6m.Turnover fell 40 per cent to &pound;683.8m as the firm sold just 4,380 houses versus 6,556 the year before.<br /><br />Chief executive John Watson said although profits were down the company was able to slash its debts in the year by &pound;180.9m to &pound;36.8m. And, it has raised a further &pound;43.7m from shareholders since end-July, he said. <br /><br />Watson said the company is bearing in mind lessons learned from previous recessions and prioritising cash generation during the downturn, giving it a war-chest to buy land.<br /><br />&ldquo;We are one builder that can throw a chequebook at land if the opportunities are there,&rdquo; he added.<br /><br />Watson said there was a split in the housing market, with demand in the south of England much firmer than in the north, and rising unemployment meant a double-dip in house prices could not be ruled out.<br /><br />&ldquo;Unemployment is the big worry,&rdquo; he said.<br /><br />He announced a 6p a share final dividend on 20 January, taking the year total to 9p versus 24p last year.<br /><br />Shares of the firm, which have fallen 12 per cent from a 20-month high of 927.5p in mid-September, rose by 0.9 per cent immediately after the announcement yesterday to 813p before closing at 794p.<br /><br />Panmure Gordon upgraded the company to &ldquo;buy&rdquo; from &ldquo;hold&rdquo; following the better-than-expected results, and said it expected to raise its 2010 pre-tax profit forecast.<br />