Speedy recovery in housing ruled out
Mar 27 2008 by Andrew Mernin, The Journal
The analysts' views
Landsbanki analysts said Bellway's business model should help protect it from the housing market downturn.
"The strengths of Bellway are already showing through in this tough market - a well spread geography, astute land assembly in prior years and a cerebral approach to the market ensures its performance against its peers should remain well above average," said a Landsbanki note.
Vinay Bedi, fund manager at Brewin Dolphin in Newcastle, said: "These results and in particular the accompanying statement were eagerly anticipated by the City and, true to form, even though the results were actually better than anticipated, the shares were initially marked down. Accepted, the picture in the broad market place does not look good and indeed the worst may yet be to come – Bellway particularly highlighted the Midlands, Yorkshire and the North West as "challenging".
"However, for investors looking for opportunities and value, Bellway remains cheaper than most of its peer group and at a good discount to asset value; its trading profile is relatively defensive and management is both hugely experienced and proven. Now might not be the exact time to start adding to holdings but that moment could arrive sooner than anticipated. We remain firm supporters of the stock."
| A note by Dresdner Kleinwort said: |
| "PBT fell 4% to £96.9m vs our £91.6m, with volumes, prices and margins slightly ahead of our expectations. A good performance in a tough market for a housebuilder that is our only non-negative recommendation. |
| Our FY PBT is £187.2m and 113.7p of diluted earnings and we believe consensus will drop from £210m to around £190m - 200m. |
| We believe the meeting will show private orders were below the -9% for overall orders quoted in the RNS. We believe the company will also put more meat on the bones of its comment that the land market is "softening". |
