BELLWAY PLC

Bellway Plc

Bellway Plc

Industry Overview:

The total output of the construction industry in Great Britain was estimated at 123.24bn in 2008, an increase of 20.5% on the figure for 2004. Output rose each year between 2005 and 2008, but the growth rate slowed to just 1.1% in the latter year -- the lowest figure recorded over the period, a result of the severe downturn now affecting the UK economy.

The UK construction industry faces serious challenges. In 2008, problems in the US sub-prime mortgage market triggered a catastrophic crash in the US banking sector, which in turn created problems in UK financial markets. Some UK banks now have a significant degree of government control and credit is very difficult to obtain, for either domestic or business purposes.

Individual sectors of the construction market also have their own specific challenges. In the housebuilding sector, for example, the Government has plans to build more homes but a shortage of buyers in the current market conditions is impeding progress. Fast-track construction techniques are facilitating more cost-effective housebuilding, but even this development is not having much effect on the affordability of housing. Although house prices are now falling, mortgages are still expensive for the many people who need to borrow a large sum of money in relation to the property price.

The infrastructure sector is the least affected by the economic downturn and has benefited from government investment in transportation. Public spending on hospitals and education, including Public Private Partnerships (PPPs), is an important factor in the commercial sector. However, offices and retail activities in the commercial sector are now experiencing a downturn, due to the problems in the banking industry and reduced consumer spending. Inevitably, the reduction in construction activity is having a knock-on effect on the building-materials sector. Some suppliers of building materials are closing or 'mothballing' plants and implementing job cuts.

In terms of the future, by far the most important concern is the length and depth of the current recession. Continued volatility in energy markets will pose an additional challenge for the construction industry, because energy is a significant factor in material prices. Sustainability, the drive to reduce carbon emissions and the pressure to reduce the use of fossil fuels will also increase in importance and will create extra costs for the industry.

Company Overview:

Bellway is a holding company. Through its subsidiary undertakings, Co. is principally engaged in house building in the United Kingdom. Incorporated in the United Kingdom as Globemaster Services Ltd. Present name adopted on May 11, 1979. In Apr. 1997, Co. disposed of its kitchen and bedroom unit manufacturing business, Nixons Kitchens.

Financial Data Intertpretation:

 

31/07/2009

31/07/2008

31/07/2007

31/07/2006

31/07/2005

 

GBP

GBP

GBP

GBP

GBP

 

 

 

 

 

 

Profitability ratios

 

 

 

 

 

 

 

 

 

 

 

Return on Shareholders Funds (%)

-3.79

3.47

22.67

24.43

27.40

Return on Capital Employed (%)

-3.31

2.56

20.20

20.10

20.71

Return on Total Assets (%)

-2.71

2.05

14.35

14.77

15.80

Profit margin (%)

-5.35

3.02

17.34

17.80

18.52

Gross margin (%)

3.04

9.82

23.04

23.57

23.80

Berry ratio (x)

0.50

1.92

5.30

5.52

5.51

EBIT margin (%)

-3.03

4.71

18.69

19.30

19.49

EBITDA margin (%)

 

 

 

 

 

 

 

 

 

 

 

Operational ratios

 

 

 

 

 

Net Assets Turnover (x)

0.62

0.85

1.16

1.13

1.12

Fixed Assets Turnover (x)

15.62

39.29

48.16

39.53

66.31

Interest Cover (x)

-0.76

2.53

11.23

11.34

16.88

Stock Turnover (x)

0.56

0.76

0.88

0.86

0.95

Debtors Turnover (x)

61.98

84.25

84.90

102.63

69.46

Debtor Collection (days)

5.89

4.33

4.30

3.56

5.26

Creditors Payment (days)

28.08

23.84

22.75

54.52

27.50

 

 

 

 

 

 

Structure ratios

 

 

 

 

 

Current ratio (x)

5.31

4.95

3.39

3.69

4.16

Liquidity ratio (x)

0.39

0.49

0.15

0.07

0.36

Shareholders liquidity ratio (x)

6.96

2.79

8.17

4.64

3.09

Solvency ratio (%)

71.49

59.00

63.29

60.47

57.65

Asset Cover (x)

13.50

5.75

21.25

9.40

5.85

Gearing (%)

14.37

41.05

18.09

23.42

32.58

 

 

 

 

 

 

Per employee ratios

 

 

 

 

 

Profit per employee (unit)

-29,477

15,780

94,851

90,233

95,434

Turnover per employee (unit)

551,462

521,807

546,859

507,029

515,338

Salaries/Turnover (%)

8.08

8.04

7.24

7.80

7.22

Average Remuneration per employee (unit)

44,541

41,966

39,571

39,563

37,201

Shareholders Funds per employee ...