No Surprises today....

...that Bellway - (BWY) the UK house builder (CI Score 99) announced bumper interim profits today as they had already flagged in a prior trading update that they would see strong trading results which would be weighted towards the first half. So rather than reproduce lots of big % gain numbers like the 56.1% rise in earnings I'll leave you to read the announcement if it is of interest. Of interest to me was the fact that the dividend was also up by 56.3% to 25 pence. They suggested they would continue with "The payment of a progressive dividend, together with the growth in net asset value, is delivering long term, sustainable returns for shareholders."

So given that they already told us that the results were going to be first half weighted what does this leave them to do in the second half? Well last year they made 89.9p of earnings in H2 and they have just reported 103.5p in H1 this year. So looking at forecast of 210.2p for the full year (Source: Stockopedia) this leaves them 106.7p to do in the second half or growth of 18.7% in H2, which doesn't seem too demanding against the growth just reported.

However, I guess we have had some signs of a slow down in the housing market and with the General Election to come this could impact them. But talking of politics each party seems to be trying to out do the other in terms of the number of house they are planning to build - although I'm not quite clear how they are going to do that? Plus the latest scheme from the Chancellor George Osborne to provide help to buy ISA's with tax relief on top might eventually help (house prices) at the margin, but surely increasing supply and bringing prices down would be better for those looking to get on the debt treadmill, but then falling house prices presumably don't help win elections.

Any way I digress, getting back to the point, it seems Mr. Market likes the numbers and has marked the shares higher this morning by around 4% to nearly 2100p. Looking at the chart (see below) they seem to be making a break for new highs, which will be good if it is confirmed. I see also that Panmures and Liberum have price targets of 2126p and 2278p.
However, I note that the shares have gone up faster than some builders scaffolding recently and their vertical ascent has also left them looking overbought in the short term.

So on around 9.5x with a 3.5% yield (3x covered) based on current forecasts for this year, before any changes on the back of today's numbers, they seem fine but I probably wouldn't chase them up here. It will be worth watching to see what happens to the numbers to see if there are any upgrades as this could make them look better value and possibly justify the higher price targets.

So there you go:
No Alarms and No Surprises
Such a pretty house, such a pretty garden
Radiohead - No Surprises - seems like an appropriate song for today so see also the video at the end if music is your thing and even if its not I would urge you to check it out as I think Radiohead are an "interesting" band and this tune is one of their more relaxing, if a bit weird - enjoy.