Bellway Posts FY09 Loss

10/13/2009 3:55 AM ET

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(RTTNews) - Home builder Bellway PLC (BWY.L: News ) on Tuesday announced preliminary results for fiscal year 2009, reporting a loss compared to a profit last year, as difficult market conditions led to a steep decline in number of homes sold as well as average selling price. However, the company issued an optimistic forecast for the next fiscal year.

For the year ended July 31, the company said its pre-tax loss was GBP 36.55 million compared to pre-tax profit of GBP 34.76 million in the prior year. Before exceptional items, the company reported a pre-tax profit of GBP 29.76 million, compared to a pre-tax profit of GBP 165.67 million in the previous year.

The company posted a loss of GBP 27.44 million or 23.9 pence per share for 2009, compared to a profit of GBP 27 million or 23.5 pence per share last year. Before exceptional items, profit was GBP 20.30 million, or 17.6 pence per share, a sharp decline from GBP 119.51 million or 104.1 pence per share reported last year.

Exceptional items amounted to GBP 66.3 million in fiscal 2009, compared to GBP 130.9 million last year. Exceptional items include land write-downs of GBP 58.88 million compared to GBP 112.53 million last year.

Revenue declined to GBP 683.81 million from GBP 1.15 billion a year ago. The company is a volume house builder and sells primarily in the private market. It also acquires and sells second hand homes taken in part exchange.

The company sold 4,380 homes in fiscal 2009, compared to 6,556 sales in fiscal 2008. Average price achieved reduced to GBP 154,005 from GBP 169,729 in the prior year.

The company's six northern divisions sold 1,833 homes, down 45% from the previous year's 3,348 homes. The seven southern divisions sold 2,547 homes, down 21% from last year's 3,208.

Bellway noted that due to the discouraging housing market environment, sales incentives had to be used extensively, which contributed significantly in the decline in operating margin, pre-exceptional, to 6.7% from 16.1%.

Administrative expenses declined to GBP 41.55 million from GBP 58.76 million, and finance expenses dropped to GBP 20.71 million from GBP 22.68 million.

Finance income grew to GBP 4.89 million from GBP 3.63 million in the previous year. An income tax credit of GBP 9.11 million was recorded in 2009, compared to an income tax expense of GBP 7.76 million last year. The effective rate of taxation for 2009 was 24.9%, compared to 22.3% in 2008.

Gearing stood at 3.8% at the end of 2009, compared to 21.7% in 2008, as a result of reduction in borrowings by GBP 180.9 million.