Results round-up: Bellway, Vectura

Bellway hoisted its interim dividend 10% as the housebuilder enjoyed continued strong demand in the first half and maintained its targets for the full year as the second half got off to a strong start to the spring selling season.

Revenue of £1.15bn for the six months to the end of January was a 5.9% improvement on the same period a year ago as the company completed 4,462 homes at an average selling price up 4% to £256,140.

For the full year the number of homes sold is expected to rise by at least 5% and the ASP to £260,000.

Customer demand has remained strong, resulting in the reservation rate increasing 6.4% to 166 sales per week, and even though labour shortages placed upward pressure on building costs throughout the sector, Bellway kept a lid on costs and expanded the operating margin by 60 basis points to 22%, where it is expected to finish the year.

Profit before tax rose 9.3% to £247.6m, earnings per share by 10.2% to 163.9p and the half-time dividend was hiked 10.3% to 37.5p.

Directors said it expected to keep the dividend covered around three times by earnings for the foreseeable future as sufficient land opportunities remain available that meet or exceed its required returns.

The land market remained attractive in the first half, allowing Bellway's land teams to identify sufficient opportunities to meet those targets, agreeing to acquire 6,287 plots and with an owned and controlled land bank rising to 37,931 plots - of which 18% is in London.

Chief executive Ted Ayres said the planning environment remained positive, with an increasing number of plots granted planning permission by local authorities and many also now identifying larger sites to achieve their required housing supply in accordance with the National Planning Policy Framework.

Vectura

Vectura, a maker of inhaled airways products, reported that revenue grew last year on the back of recently launched products, but its loss before tax widened due to one-off charges from its merger with Skyepharma.

For the nine-month 'year' ended 31 December, revenue increased 76% to £126.5m, compared to the same period the previous year, following the momentum of seven recently launched inhale products with in-market net sales rising 81% to $2bn.

The FTSE 250 company said it also benefitted from the £441m merger last March with the integration of Skyepharma "well advanced" and management confident of delivering synergy targets as a minimum.

However, the merger led to loss before taxation widening to £40.1m from £1.9m due to a higher amortisation charge of £64m and exceptional items of £9.4m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) surged 47% to £34.1m, beating some analyst forecasts.

Revenue from recurring sources now accounts for 80.1% of total revenue, up significantly from 59.6% in 2015.

The company ended 2016 with £92.5m in cash with operating inflows of £28.2m offset by merger related outflows.

Chief executive James Ward-Lilley said that Vectura is well-positioned to accelerate shareholder value creation with its formulation, device and development capabilities, as well as capitalising on changes in the market dynamics of the inhaled respiratory market.

"The group has a strong outlook both as a partner for generic and novel development programmes and the opportunity to capture an increasing share of investment value through the future commercialisation of its wholly-owned specialist targeted assets."