Building Homes Datafile - February 2001

The Month
January has seen unprecedented takeover activity in the housebuilding sector and some analysts believe there may be more to come. As a result the sector's stocks have risen from the doldrums of last year. It is too early to predict if they will stay high as the Halifax said house prices rose only 0.1% this month.

The Business

Stockwatch
Bellway anticipates a record trading performance in the six months to end-Jan with increases in both average selling price and number of homes sold. The company, which has just won a planning appeal at Stepney in east London for over 400, homes predicts its full year results will show an "excellent" performance. Bellway reports that its Northern Home Counties division, which began trading in August last year, is expected to make a profit in its first year. The company anticipates its interim results, due to be published in April, will show another record trading performance. In the midst of the takeover battle Bryant reported a 4% rise in pre-tax profits. In the half year to November 30 pre-tax profits rose to £42m compared with £40.4m last year. Turnover was down slightly at £334.9m from £338.5m, but was offset by higher margins. Operating profit rose by 8.4% to £46.7m. Gearing at the group increased to 34.9% as a result of a share buy-back programme instituted last autumn, when 24m shares were repurchased and cancelled at a cost of £31.2m. Bryant said that at the end of the half-year its consented land bank was 12 801 plots compared with 11 208 last year. Crest Nicholson has reported final results showing a 20.3% rise in pre-tax profit to £48.1m on sales up 7.7% to £544.6m. Finally, Kent housebuilder Ward Homes has launched a new region - Ward Homes Anglia, based in Berkhamsted, Hertfordshire - which has recently acquired two additional sites.

Business Fact
Background on UK housebuilders
Kent-based Propan Homes predicts a 60% rise in pre-tax profit to £1.9m for fiscal 2001. The 60-unit per year company achieved a return of 27% on turnover at the operating profit level in 2000. The company contracts out all of its construction, design and planning work to local contractors. It focuses on developing sites which are "too small to attract the larger housebuilder but are too big for the jobbing builder". Typically 70% of land and building cost is financed by low-cost loans linked to individual developments. Propan is set to transfer this month from Ofex to the Aim on the London Stock Market.

The Trends

White goods watch
UK Sales of dishwashers
Over the past year the market has seen significant growth with a 10% increase in sales of dishwashing machines (worth almost an additional £8m). By far the largest sector of the market is for full-size machines and these have seen an almost 30 000 unit increase which is equal to 5.7% growth. But slimline machines have shown a massive percentage leap (up 29%) which equates to an additional 22 000 machines. Machines with fewer programmes are seeing falling sales with those featuring less than five programmes falling by 20%. Midrange machines with five programmes have shown a 33% increase and higher spec machines with seven programmes or more have shown a 22 000 unit increase. Those with seven programmes have seen sales double and those with more than seven programmes have shown an increase of 43%. Unlike the washing machine market consumers do not appear to be making a concerted effort to buy more energy efficient machines. In terms of machine volume by far the biggest market share is taken by machines which can handle 11-12 place settings. Laura Bartlam of GfK Marketing comments: "While the UK household penetration of dishwashers remains low (22%) in comparison to Europe, the volume growth remains positive. The majority of this growth is fuelled by consumers re-entering the market with replacement purchases. The dishwasher market has seen significant price erosion, particularly in the freestanding full size sector. However built-in dishwashers are holding up the value side to a certain extent with strong growth in recent years."

Did you know?
More than 11.5m people in the UK now have access to the internet from their home computer. Women now make up 40% of all surfers, while so-called 'silver surfers', those over the age of 55, make up 19% of the total. However, children under the age of 14 account for just 0.6m, or 5%. Source: NetValue