Bellway Guides Lower on FY27 Homes and Margin, but Shares Rise

Bellway (LON: BWY), the UK housebuilder, reported higher completions and profit for the year to 31 July but guided to fewer homes and a lower margin in FY27. Its shares nonetheless rose in early trading today.

The stock was up about 2.7% at 2,039p by 9.08am London time, against 1,985p at yesterday’s close; the price is delayed and intraday. That is still about 29% below the 2,890p high of the 13th of February. The reason for the rise is not confirmed, but the bigger buyback and higher dividend possibly helped.

The full-year results, published at 7am, were solid against Bellway’s own prior year. Completions rose 10.8% to 9,695 homes, revenue 13.6% to £3,162.2m and underlying pre-tax profit 5.7% to £305.7m. Adjusted operating cashflow climbed 36.0% to £868.6m. Chief executive Jason Honeyman said:

Bellway has delivered a robust performance, growing both volume output and profits despite ongoing challenges across the housing market.

Jason Honeyman, Bellway

The squeeze sits in the margin and the outlook. Underlying operating margin slipped to 10.1% from 10.9%, and Bellway expects a further fall in FY27 from build cost inflation, elevated sales incentives and more bulk sale completions. It targets 9,000 to 9,400 completions, below this year’s 9,695.

Demand indicators back the caution. The order book stood at 4,981 homes against 5,285 a year earlier. The private reservation rate was 0.50 per outlet per week in the nine weeks since the 1st of August, against 0.51 a year earlier. Incentives averaged about 5%, up from 4.1%.

Shareholders get more cash. The dividend rises 7.1% to 75.0p, and the FY27 buyback is £150m, with the first tranche raised to £75m from £50m. Net cash ended the year at £157.7m.

Bellway said customer demand remains constrained by affordability pressures, with mortgage rates above prior-year levels. With the shares well below their February high, some of that caution may already be in the price; whether other housebuilders report the same weakness is the next test.