Profits expected to soar for housebuilder Bellway

The recovery in the house market should boost Bellway’s results next week with analysts expecting a surge in pre-tax profits for the housebuilders

Bellway, which is based in Newcastle, is expected to report a surge in profits this week
Bellway, which is based in Newcastle, is expected to report a surge in profits this week

The recovery in the house market should boost Bellway’s results next week, while the same factor may lift BSkyB’s figures as households are more likely to change TV and phone provider when they move.

Government efforts to pump up the housing market should ensure a year of surging profits and sales for housebuilder Bellway when it reports results tomorrow.

The Newcastle-based builder will publish figures for the year to the end of July, with analysts on average expecting pre-tax profits to surge to £139m from £105.3m a year earlier.

Bellway has already reported 12% growth in housing revenue to around £1.1bn for the year, with profit margins also improving, after selling 5,652 homes, an increase of 8.2%.

The Government recently gave another boost to the housing market by extending its Help to Buy scheme with £12 billion of mortgage guarantees, building on an initial equity loan scheme which allows people to buy a new home with a 5% deposit.

Analysts at Panmure Gordon said: “It is our understanding that all of the UK housebuilders are trading well at the moment.

“We expect the company to report strong forward and current sales when it publishes its full-year results.”

The builder also cited a 54% bigger order book, and has opened two new divisions in Manchester and the Thames Valley to give it 15 divisions.

Numis Securities analyst Chris Millington said: “We believe the group is very strongly placed to benefit from the improving trends in the new housing market backed by Help to Buy.”

The intensifying battle for broadband and TV customers will take centre stage on Thursday when British Sky Broadcasting updates on first-quarter trading.

BT recently stepped up the pressure on Sky with its new live sport offer, which includes a three-year deal to show 38 Premier League games a season.

BT hopes to win over broadband customers by offering them free sport if they sign up to a broadband internet package.

And analysts at Numis Securities reckon Sky’s growth in broadband customers will slow in the three months to the end of September to about 75,000, from 102,000 a year earlier.

Sky is increasingly focusing on “triple-play” services spanning TV, internet and home phones.

Investec Securities analyst Steve Liechti said the number of paid-for products taken by customers should rise by 594,000, from 533,000 growth a year earlier - although this includes new Sky Go Extra products.

He said: “While Sky looks a safe haven given current US government issues, competitive dynamics are tough, evidenced by BT Sport launch activity.”

But despite tougher competition, analysts at Numis believe Sky could benefit from Britain’s improving housing market.

Burberry will update on demand for its trench coats and handbags when it reports on trading for the six months to the end of September tomorrow.

Analysts favour its store expansion in cities such as Shanghai, and also back its digital strategy. They expect first-half retail sales to have grown to £694m from £577m a year earlier.

Baby products retailer Mothercare is expected to reveal a decline in UK sales when it updates on trading on Thursday, although hopes that its turnaround is gathering pace will remain.

The group saw UK like-for-like sales edge 0.9% lower in its first quarter to July 13, blaming an “increasingly promotional” market that hit demand for toys, home and travel products.

But a 14.6% surge in online Direct in Home sales limited the UK trading woes, while its international business continued to storm ahead with 11.3% growth.

The warm summer weather is set to have helped drive a rise in half-year profits for cash-and-carry chain Booker after the heatwave boosted many of its wholesale restaurant customers.

Booker, which reports interims on Thursday, cheered a “good start to the year” after like-for-like sales rose 2.3% in the first half to September 13.


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