The Investment Column: Beazer looks good value

BEAZER, the UK's third largest housebuilder, has a right to feel peeved that its share price fell 9.5p to 214p yesterday even though it announced a 32 per cent rise in pre-tax profits to pounds 31.4m for the six months to December.

No doubt the fact that it failed to smash analysts' forecasts like Barratt did 24 hours had something to do with it but it still produced results in line with expectations.

Highlighting growing planning delays which are causing land prices to escalate hardly helped its case, but the group is not unique in facing these problems and it still managed to grow operating margins by more than 2 percentage points to 12.2 per cent. And its long land bank should give extra insurance against a future rise in costs.

A sharp rise in the house building sector in recent months has also prompted investors to consider tucking away some profits.

However Beazer, like Barratt, has one of the most respected management teams in the sector which makes it a more attractive bet that most.

Beazer's completions rose 12 per cent and selling prices were up 4 per cent, and the group should be able to maintain this sort of growth rate for the next few years.

Charles Church, its recently acquired upmarket housebuilder, has been restructured and is now firing on all cylinders.

Broker Williams de Broe forecasts current year profits of pounds 74m, putting the shares on a prospective p/e ratio of 11. Good value.