Companies: BWY    GLE    WBY   

House builder and buyer services firm Westbury is the latest house builder to report improved profits with a 10 per cent first half increase to £32 million pre-tax, and good prospects, writes Ben Cobley.

Westbury's (WBY) interims showed pre-tax profits up 10 per cent to £31.9 million for the six months to 31 August, on turnover up 15 per cent to £264.9 million. The fully listed company has now managed to increase its earnings per share by a total of 172 per cent over five years. Interim earnings were up 12 per cent at 20.1p.

These figures exclude the start-up costs associated with subsidiaries Space4 (which is pioneering modular construction in the UK) and Incresco (which provides financial services to home buyers). The core homes business saw pre-tax profit increase 20 per cent to £34.8 million, while westbury-direct contributed £750,000 to the group's bottom line during the period.

But, just like Bellway (BWY) and the more diversified MJ Gleeson (GLE), Westbury has reported no let-up in the number of reservations and visits since 11 September (this is after Prowting (PWT) did so on 15 October). Indeed reservations are actually up compared to this time last year, according to deputy managing director Colin Cole.

Cole points to three reasons for optimism about the housing market. One, employment is still at 'very good levels'. Two, low interest rates make for good fixed rate mortgages. 'Probably most important', according to Cole, is the fact that supply is well short of demand. House builders consistently complain about how slow the planning process is, as they want to build many more new homes than they do at the moment.

Such a first half performance has Cole predicting that the company will meet expectations for the year as a whole. Analysts expect around £72.6 million pre-tax, with earnings at 45.2p per share. At a price of 237.5p, up 5.5p on the day, this puts the company on 5.3 times prospective earnings for the year. Net asset value at the half-year end was 274p per share.