REG - Bellway PLC - Interim Results Announcement
25/03/2025 07:00
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RNS Number : 9555B Bellway PLC 25 March 2025
Bellway p.l.c. ('Bellway' or the 'Group'), the national housebuilder,
announces today, Tuesday 25 March 2025, its Interim Results for the half year
ended 31 January 2025.
Summary
Strong first half performance and well-positioned for multi-year growth
Half year ended Half year ended Movement
31 January 31 January
2025 2024
Housing completions 4,577 4,092 +11.9%
Revenue £1,429.4m £1,273.1m +12.3%
Underlying performance measures:
Gross profit (underlying) £233.8m(2,3) £210.5m(2,3) +11.1%
Gross margin (underlying) 16.4%(2,3) 16.5%(2,3) (10 bps)
Operating profit (underlying) £156.6m(2,3) £139.9m(2,3) +11.9%
Operating margin (underlying) 11.0%(2,3) 11.0%(2,3) -
Profit before taxation (underlying) £150.2m(2,3) £134.2m(2,3) +11.9%
Earnings per share (underlying) 90.3p(2,3) 80.6p(2,3) +12.0%
RoCE (underlying) 8.9%(2,3) 8.1%(2,3) +80 bps
Statutory performance measures:
Adjusting items (pre-tax) £9.4m £16.8m (44.0%)
Profit before taxation £140.8m £117.4m +19.9%
Earnings per share 84.6p 70.6p +19.8%
Interim dividend per share 21.0p 16.0p +31.3%
Net asset value per share 2,960p(2) 2,888p(2) +2.5%
Net (debt)/cash (£8.0m)(2) £76.6m(2) (110.4%)
Land bank (total plots) 95,506(4) 94,492(4) +1.1%
Jason Honeyman, Group Chief Executive, commented:
"Bellway has delivered a strong first half performance with good growth in
volume output and profits. Underlying demand for our homes is healthy and we
have been encouraged by the improvement in customer enquiries and reservations
since the start of the new calendar year.
The Group remains on track to deliver volume output of at least 8,500 homes
(31 July 2024 - 7,654) in the full financial year and we currently expect to
build the order book through the second half to support further growth in
financial year 2026.
I am confident that, given our operational strengths and land bank depth, we
remain very well-positioned to capitalise on the positive long-term
fundamentals of the UK housebuilding industry, and Bellway will continue
delivering the high-quality new homes the country needs."
First half performance in line with our expectations
§ Growth in total housing completions of 11.9% to 4,577 homes (2024 - 4,092)
at an average selling price of £310,581 (2024 - £309,278).
§ Underlying operating profit increased by 11.9% to £156.6m(2,3) (2024 -
£139.9m) and the underlying operating margin was in line with our
expectations at 11.0%(2,3) (2024 - 11.0%).
§ The private reservation rate per outlet per week increased by 18.6% to 0.51
(2024 - 0.43), including a contribution from bulk sales of 0.06 (2024 - 0.03).
§ The interim dividend has increased to 21.0p per share (2024 - 16.0p) and
underlying dividend cover for the full financial year is expected to be 2.5
times(2,3).
§ We provided £9.4m (2024 - £16.8m) as an adjusting item for legacy
building safety. This mainly comprises an adjusting finance expense, in line
with previous guidance, of £7.3m (2024 - £9.4m).
High-quality land bank and strong balance sheet to support multi-year growth
plans
§ Bellway's land bank comprised a total of 95,506 plots(4) (2024 - 94,492
plots) and includes 48,533 owned and controlled plots (2024 - 49,365 plots),
providing good visibility on outlet openings.
§ We contracted to purchase 5,246 owned and controlled plots (2024 - 1,237
plots) across 32 sites (2024 - 9 sites) during the period.
§ The Group traded from an average of 248 outlets (2024 - 243), an increase
of 2.1% driven by our strong land bank and achieved despite the challenges in
the planning system.
§ Further expansion of our strategic land bank, which rose to 46,100 plots
(2024 - 44,200 plots) and underpins our longer-term growth prospects for a
relatively low initial capital outlay.
§ The Group has a well-capitalised balance sheet with modest net debt of
£8.0m(2) (2024 - net cash of £76.6m) and low adjusted gearing, inclusive of
land creditors, of only 8.5%(2) (2024 - 4.7%).
Encouraging recent trading and order book underpin FY25 targets
§ In the seven weeks since 1 February, the private reservation rate per
outlet per week was 0.76 (1 February to 17 March 2024 - 0.67).
§ The forward order book at 16 March 2025 comprised 5,582 homes (17 March
2024 - 5,063 homes) with a value of £1,581.0m(2) (17 March 2024 -
£1,344.1m).
§ The Group remains on track to deliver full year volume output of at least
8,500 homes (31 July 2024 - 7,654 homes) with output weighted towards the
first half.
§ We continue to expect the full year average selling price to be around
£310,000 (31 July 2024 - £307,909) and the underlying operating margin to
approach 11.0%(2,3) (31 July 2024 - 10.0%).
1 All figures relating to completions, order book, reservations,
cancellations and average selling price exclude the Group's share of its joint
ventures unless otherwise stated.
2 ( ) Bellway uses a range of statutory performance measures and
alternatives performance measures when reviewing the performance of the Group
against its strategy. Definitions of the alternative performance measures,
and a reconciliation to statutory performance measures, are included in note
14.
3 Underlying refers to any statutory performance measure or alternative
performance measure before net legacy building safety expense and exceptional
items (note 2).
4 Includes the Group's share of land owned and controlled through joint
venture partners comprising 873 plots (2024 - 927 plots).
5 As measured by the Home Builders' Federation using the eight-week NHBC
Customer Satisfaction survey.
6 Comparatives are for the half year ended 31 January 2024 or as at 31
January 2024 ('2024') unless otherwise stated.
Analyst presentation, webcast and conference call
There will be an analyst presentation held at the offices of Deutsche Numis at
9.00am today. The presentation will be hosted by Jason Honeyman, Group Chief
Executive and Shane Doherty, Chief Financial Officer.
A listen-only webcast and conference call will accompany the presentation. To
join the webcast, go to the Bellway p.l.c. corporate website,
www.bellwayplc.co.uk/investor-centre
(http://www.bellwayplc.co.uk/investor-centre) .
To join via the conference call, participants should dial +44 (0)33 0551 0200
and quote 'Bellway Interim Results' when prompted by the operator.
A playback facility will be available on our corporate website shortly after
the presentation has finished.
For further information, please contact:
Bellway p.l.c.
Jason Honeyman, Group Chief Executive
Shane Doherty, Chief Financial Officer
Gavin Jago, Group Investor Relations Director
0191 217 0717
Media enquiries
Paul Lawler, Group Head of Communications
paul.lawler@bellway.co.uk
07813 392 669
Sodali & Co (Financial PR)
Justin Griffiths
Victoria Heslop
bellway@sodali.com
0207 250 1446
Chief Executive's Market and Operational Review
Market
Trading through the first half was ahead of the comparative period, driven by
lower mortgage interest rates and an improvement in consumer confidence. While
we did not experience a typical seasonal step-up in reservations during the
autumn, trading was stable and followed by a notable increase in January 2025.
Customer demand was further supported by good availability of mortgage
finance, although affordability remains relatively constrained for those
customers requiring higher loan-to-value mortgages.
The private reservation rate increased by 21.0% to 127 per week (2024 - 105),
with this set against a weaker comparator period and partly driven by an
increase in outlet numbers. The private reservation rate per outlet per week
increased by 18.6% to 0.51 (2024 - 0.43), including a contribution of 0.06
from bulk sales (2024 - 0.03). The overall reservation rate, including social
homes, rose by 14.3% to 160 per week (2024 - 140) and the cancellation rate
reduced to a more normalised level of 14% (2024 - 16%).
The Group traded from an average of 248 outlets in the period (2024 - 243), in
line with our expectations, with a closing position of 245 outlets at 31
January 2025 (2024 - 246). The 2.1% increase in average outlets was driven by
our strong land bank and achieved despite challenges in the planning system.
The Group's Ashberry brand is currently used on around 14% of our active
outlets, and typically on larger sites alongside our core Bellway brand.
Ashberry offers customers a choice of layouts and elevational treatments, from
our standard house type range, and the use of dual branding on sites drives
both enhanced sales rates and an improvement in RoCE.
Overall, headline pricing across our regions has remained firm, and our sales
teams continue to use a range of targeted incentives to encourage further
customer interest and secure reservations. The use of selling incentives has
generally remained stable during the period, although there has been more
limited use in regions where affordability remains good in the context of the
local market and in areas with healthy employment levels.
High-quality land bank to support outlet opening programme and volume growth
ambitions
Bellway has a high-quality land bank, with strength and depth to support our
growth plans, and our experienced land teams have continued with a disciplined
and targeted approach to land acquisition during the period.
The table below analyses the Group's land holdings:
31 January 31 January
2025 2024
DPP: plots with implementable detailed planning permission 31,133 29,765
Pipeline: plots pending an implementable DPP 17,400 19,600
Bellway owned and controlled plots 48,533 49,365
Bellway share of land owned and controlled by joint ventures 873 927
Total owned and controlled plots(4) 49,406 50,292
Strategic land holdings 46,100 44,200
Total land bank(4) 95,506 94,492
The Group's owned and controlled land bank comprises 48,533 plots (2024 -
49,365 plots), including 31,133 plots (2024 - 29,765 plots) with an
implementable detailed planning permission ('DPP') and 17,400 pipeline plots
(2024 - 19,600 plots). This represents a land bank length of 6.0 years (2024 -
5.3 years) based on the last 12 months' legal completions.
During the first half the Group contracted to purchase 5,246 owned and
controlled plots (2024 - 1,237 plots) across 32 sites (2024 - 9 sites) with a
total contract value of £378.2m (2024 - £103.4m). We also have a healthy
future pipeline of potential acquisitions, with Heads of Terms agreed on
around 8,000 plots at 16 March 2025 and we expect overall plots contracted in
financial year 2025 to be similar to volume output.
The Group was operating from 245 outlets as at 31 January 2025, having opened
17 new sales outlets in the period and as noted earlier, traded from an
average of 248 (2024 - 243). We remain on track to open over 30 new outlets
in the second half of the financial year and continue to expect to operate
from an average of around 245 outlets for the full financial year (31 July
2024 - 245).
Our investment in strategic land has continued, which has enhanced our overall
land supply for a relatively low initial capital outlay, while also supporting
our longer-term growth ambitions. In the first half we entered into option
agreements to buy 11 sites (2024 - 10 sites), building upon our increased
activity in the strategic land market in recent years. Bellway's strategic
land portfolio now comprises 46,100 plots (2024 - 44,200 plots), and we expect
to deliver a growing proportion of volume output from our strategically
sourced land bank over the medium term.
We welcome the Government's longer-term approach to increase the supply of new
housing, including the reintroduction of mandatory housing targets and
much-needed reforms to the planning system. While the full intended benefits
of these reforms will take time to be realised, planning delays are beginning
to ease, providing a supportive backdrop for our plans for multi-year volume
growth.
Production and cost control
Overall build cost inflation was running in the low single digits through the
first half. Given the industry-wide decline in construction activity since
2022 there are presently good levels of product availability across the Group
and modest overall material cost inflation on new tenders. Bellway's
experienced procurement teams continue to work closely with our wide range of
supply chain partners to ensure we are prepared for our targeted increase in
volume output in the current financial year and beyond.
The Group's outlet opening programme has provided good visibility on pipeline
work for subcontractors and remains beneficial when negotiating new labour
contracts and pricing. Requests for subcontract price increases remain low for
most trades and typical minimum fixed price periods of 12 months are being
secured.
Bellway has robust cost controls and a consistent focus on margin protection.
Furthermore, as the industry works towards building to the requirements of the
Future Homes Standard, our Artisan Collection of standard house-types and
centralised approach to design, procurement and site layout reviews will
continue to help the Group maintain efficiency and mitigate cost pressures.
The proportion of Artisan homes is expected to increase to around 80% of
housing output (excluding apartments) in the current financial year (31 July
2024 - 70%).
We previously announced that, to support our volume growth ambitions and
carbon reduction goals, the Group is targeting an increase in timber frame use
to around 30% of housing output by 2030 (31 July 2024 - 12%). The planned
growth in timber frame output will be achieved primarily by investing in our
own proprietary timber frame manufacturing facility, 'Bellway Home Space'.
During the first half Bellway signed a long-term lease agreement for a 134,000
square foot industrial unit for 'Bellway Home Space' near Mansfield,
Nottinghamshire. Fit out of the unit has recently commenced and delivery of
computer driven robotic machinery for the facility is scheduled for summer
2025. A management team for our timber frame operations is in place, led by an
experienced Managing Director and we expect to begin supplying our divisions
with frames from the facility in early 2026.
We are confident that our investment in timber frame in the years ahead will
underpin the delivery of our strategic priorities, to drive long-term volume
growth and an improvement in RoCE, and help meet the targets set out in our
'Better with Bellway' sustainability strategy.
Recent trading
The improvement in trading in the first half combined with our robust outlet
numbers, led to a strong increase in the forward order book compared to the
prior year period. This comprised 4,726 homes (2024 - 3,970 homes) and
increased in value by 29.5% to £1,311.5m(2) (2024 - £1,012.5m) at 31 January
2025.
Since the start of the new calendar year there has been sustained improvement
in trading compared to autumn 2024, supported by robust underlying customer
demand and a seasonal uplift. In the seven weeks since 1 February, the private
reservation rate was 184 per week (1 February to 17 March 2024 - 163). This
represented a private reservation rate per outlet per week of 0.76 (1 February
to 17 March 2024 - 0.67), including a contribution from bulk sales of 0.10
(2024 - 0.01). The overall reservation rate rose by 10.2% to 227 per week (1
February to 17 March 2024 - 206).
Reflecting recent trading and volume output, the order book has risen from the
level at 31 January 2025. The forward order book at 16 March 2025 comprised
5,582 homes (17 March 2024 - 5,063 homes) with a value of £1,581.0m(2) (17
March 2024 - £1,344.1m).
Outlook
Bellway's healthy forward order book and work-in-progress position leaves the
Group firmly on track to deliver full year volume output of at least 8,500
homes (31 July 2024 - 7,654 homes) with output weighted towards the first
half.
We have been encouraged by a pick-up in customer enquiries and reservation
rates in the spring selling season. While we remain mindful of the
sensitivity of customer demand to mortgage affordability and the evolving
economic backdrop, we currently expect to build the order book through the
second half. This will serve as a platform to drive further increases in
output and, if market conditions remain stable, Bellway can deliver cumulative
volume growth of 20% in the two years to 31 July 2026.
Given the Group's operational strengths and land bank depth, Bellway remains
very well-positioned to capitalise on the positive long-term fundamentals of
the UK housebuilding industry, and deliver ongoing value creation for
shareholders.
Jason Honeyman
Group Chief Executive
24 March 2025
Financial review
Trading performance
The Group has delivered growth in housing revenue of 12.3% to £1,421.6m (2024
- £1,265.6m), which was supported by a strengthened order book at the start
of the financial year. Other revenue was £7.8m (2024 - £7.5m) and
comprises ancillary items including land and commercial sales, and management
fee income earned on our joint venture schemes. Total revenue was 12.3%
higher at £1,429.4m (2024 - £1,273.1m).
The table below shows the number and average selling price of homes completed
in the period, analysed between private and social homes, and against the
prior year period comparative:
2025 2024 Variance (%)
Homes ASP (£000) Homes ASP (£000) Homes ASP
Private 3,617 345.9 3,078 349.6 17.5% (1.1%)
Social 960 177.6 1,014 186.9 (5.3%) (5.0%)
Total 4,577 310.6 4,092 309.3 11.9% 0.4%
Total housing completions increased by 11.9% to 4,577 homes (2024 - 4,092
homes) and overall private output rose by 17.5% to 3,617 homes (2024 - 3,078
homes). There was a modest 5.3% decline in social housing output to 960 homes
(2024 - 1,014 homes) which resulted in the proportion of social completions
decreasing to more normalised level of 21.0% of the total (2024 - 24.8%). We
have good visibility on our near-term build programmes, and we expect a
similar number of social housing completions in the second half of the current
financial year.
The overall average selling price was in line with our expectations at
£310,581 (2024 - £309,278). While there were some geographic and mix
changes, underlying pricing and the level of incentives remained firm through
the period, and we continue to expect the full year average selling price to
be around £310,000 (31 July 2024 - £307,909).
Underlying operating performance
Overall, underlying cost pressures have eased, although the effects of
residual cost inflation, extended site durations and the use of customer
incentives continue to be realised through the income statement. The Group's
commercial disciplines and proactive management of site-based overheads helped
to alleviate some of the margin pressures faced during the period and the
underlying gross margin reduced slightly to 16.4%(2,3) (2024 - 16.5%). Driven
by higher revenues in the period, underlying gross profit increased by 11.1%
to £233.8m(2,3) (2024 - £210.5m).
Other operating income and expenses, which net to a modest expense of £0.3m
(2024 - £0.9m), relate to the running of our part-exchange programme.
Part-exchange activity remained disciplined and was used for only 3.1% (2024 -
2.8%) of completions with a balance sheet investment at 31 January 2025 of
£15.6m (2024 - £20.1m). The Group has strong controls around the use of
part-exchange homes as a selling tool, and we have the financial capacity to
increase its use, in a controlled manner, if market conditions require it.
The administrative expense rose by 10.3% to £76.9m (2024 - £69.7m). The
increase, which was in line with previous guidance, follows two years of
broadly flat overheads and reflects the requirement to continue offering
competitive reward packages to attract and retain talent to support our growth
plans. It also includes the initial, pre-operational costs of our new
proprietary timber frame manufacturing operations. We continue to expect
full year underlying administrative expenses(2,3) to rise by around 10% over
the prior year (31 July 2024 - £141.8m).
The underlying operating margin for the half year was 11.0%(2,3) (2024 -
11.0%). We currently expect there to be a modest reduction in the second half
of the financial year, primarily due to reduced overhead absorption, given the
weighting of housing revenues to the first half. For the full year and in
line with previous guidance, we continue to anticipate the underlying
operating margin to approach 11.0%(2,3) (31 July 2024 - 10.0%).
The Group will continue with a disciplined approach to land investment and
cost management, and together with the support of stable conditions in the
housing market, the Board is confident that an underlying operating margin in
the mid-to high-teens(2,3) is sustainable over the longer term.
Adjusting item: Net legacy building safety expense
Bellway has allocated and committed significant resource and funding to
remediate its legacy apartments. As a result the Group is making good progress
on addressing building safety issues.
In December 2024, following a period of industry-wide delays in obtaining
building access licences, developers and the Government committed to working
together to accelerate developer-led remediation. Our experienced site
remediation teams remain focused on completing works as promptly and
efficiently as possible.
In the first half, the Group has recognised a net adjusting charge of £9.4m
(2024 - £16.8m) in relation to legacy building safety. The total adjusting
expense includes a net adjusting expense of £2.1m through cost of sales,
which relates to the refinement of overall cost estimates in relation to the
SRT and associated review provision.
The adjusting finance expense in the period was £7.3m (2024 - £9.4m) and
related to the unwinding of the discount on both the SRT and associated review
provision and the structural defects provision. This is a technical interest
unwind, which was in line with previous guidance. The adjusting finance
expense is subject to a range of assumptions, and based on the 31 January 2025
forward looking discount rate, we currently anticipate an adjusting finance
expense of around £7m in the second half of financial year 2025.
The total amount Bellway has set aside for legacy buildings in England,
Scotland and Wales since 2017 is £665.1m. Demonstrating our ongoing
commitment to deliver appropriate solutions for legacy buildings, the Group
has spent £163.0m since the start of the remediation programme, with a
remaining provision of £502.1m at 31 January 2025.
The Group's established and dedicated Building Safety division is being
enlarged to ensure every effort is being made to accelerate progress with
assessment and remediation. As at 31 January 2025, and including those
buildings that have been awarded an application by the Building Safety Fund or
ACM Funds, Bellway had a total of 159 buildings where work is complete or
underway.
Bellway has the operational and financial resources to meet its commitments
for legacy building safety and we expect to make further strong progress in
the current financial year and beyond.
Net underlying finance expense
The modest rise in the net underlying finance expense to £5.8m(2,3) (2024 -
£4.3m) was primarily due to the higher interest rates charged on the
increased land creditor balance in the period. This resulted in a higher
non-cash interest charge on land acquired on deferred terms of £7.1m (2024 -
£5.3m). The total underlying non-cash related net finance expense in the
first half was £7.5m(2,3) (2024 - £5.4m), and cash related net finance
income was £1.7m (2024 - £1.1m).
Based on prevailing interest rates and in line with previous guidance, the net
underlying interest expense(2,3) in financial year 2025 is anticipated to be
around £15m (31 July 2024 - £9.7m).
Profit for the period
Including our share of loss from joint ventures of £0.6m (2024 - £1.4m),
which reflects upfront financing costs on a long-term scheme, underlying
profit before taxation increased by 11.9% to £150.2m(2,3) (2024 - £134.2m).
Reported profit before taxation was £140.8m (2024 - £117.4m).
The income tax expense was £40.4m (2024 - £33.4m), reflecting an effective
tax rate of 28.7% (2024 - 28.4%). The effective tax rate reflects the standard
rate of UK corporation tax of 25% and also includes the Residential Property
Developer Tax ('RPDT'), which is charged at a rate of 4% of relevant taxable
profits.
The underlying profit for the period rose by 11.7% to £107.1m(2,3) (2024 -
£95.9m) and underlying earnings per share was 90.3p(2,3) (2024 - 80.6p).
After considering the adjusting items, reported profit for the period was
£100.4m (2024 - £84.0m). Basic earnings per share was 84.6p (2024 -
70.6p).
Strong balance sheet and financial position
Bellway's well-capitalised balance sheet principally comprises amounts
invested in land and work-in-progress. Within total inventories of £4,764.3m
(2024 - £4,542.4m), the carrying value of land was £2,538.2m (2024 -
£2,438.2m), with the modest increase due to a normalisation of land buying
activity and several pipeline sites receiving an implementable DPP during the
period. While our work-in-progress also increased modestly to £2,064.2m (2024
- £1,953.8m), the balance was lower than the position of £2,123.9m at 31
July 2024. This movement since the start of the financial year reflects the
increase in volume output together with our ongoing disciplined investment in
site infrastructure and programme of outlet openings.
We have maintained financial resilience, and net debt at 31 January 2025 was
low and in line with expectations at £8.0m(2) (2024 - net cash of £76.6m).
During the first half, expenditure on land, including payment of land
creditors, was £302m (2024 - £257m), primarily comprising cash payments on
contracts approved in previous financial years. Committed land obligations
were £289.7m (2024 - £238.5m) and adjusted gearing, inclusive of land
creditors, remains low at 8.5%(2) (2024 - 4.7%). We remain focused on
preserving Bellway's balance sheet strength and expect to end the current
financial year maintaining a low level of adjusted gearing(2).
Delivering value for shareholders
Net assets increased in the half year to £3,522.4m (31 July 2024 -
£3,465.4m), with the improvement in profitability partly offset by cash
dividend payments made in the period totalling £45.1m. As a result, NAV per
share increased to 2,960p(2) (31 July 2024 - 2,913p). Underlying post-tax
return on equity was 6.1%(2,3) (2024 - 5.6%) and underlying RoCE was 8.9%(2,3)
(2024 - 8.1%).
The Board remains confident that, with supportive market conditions, Bellway
is in an excellent position to capitalise on future growth opportunities.
Combined with our drive for greater cash generation and capital efficiency, we
are well-placed to deliver multi-year growth in both asset turn and margin to
deliver a sustained recovery in returns.
Shane Doherty
Chief Financial Officer
24 March 2025
'Better with Bellway'
Our responsible and sustainable approach to business
'Better with Bellway' is our approach to acting responsibly and delivering
sustainable homes. The strategy encompasses issues around people and the
environment, is central to the underlying operations of the Group and includes
ambitious targets for eight priority areas. Some recent highlights from our
three flagship priority areas of Carbon Reduction, Customers and Communities,
and becoming an Employer of Choice are included below:
Carbon Reduction
To achieve a lower carbon footprint at Bellway, we have committed to a
significant reduction in scope 1 to 3 greenhouse gas emissions by 2030. We
have several research projects underway across the business to drive best
practice for carbon reduction, and we have continued to make strong progress
to meet our targets, which have been validated by the Science Based Targets
initiative ('SBTi').
Our flagship research project is at the University of Salford where a Bellway
'Future Home' has been constructed in the 'Energy House 2.0' environmental
chamber. In this controlled environment, a variety of innovative technologies
are being tested, and the project is producing valuable data on the
performance of these technologies and the fabric of the 'Future Home'. This is
helping to inform how Bellway will build homes in the years ahead and achieve
the requirements of the Future Homes Standard.
The efforts of our colleagues and the work being carried across the research
projects have been recognised through several industry awards, including 'Best
Carbon Reduction Innovation or Practice' for the second year running at the
2024 Building Innovation Awards.
Customers and Communities
Bellway aims to provide a consistently high service and quality homes to all
our customers, and the efforts under our Customer First programme have
resulted in the Group retaining its position as a five-star(5) homebuilder.
This is awarded by the HBF using the NHBC's Customer Satisfaction survey,
which asks customers whether they would recommend Bellway to a friend, when
surveyed eight weeks after their moving date.
Bellway's overall drive to deliver high-quality homes has also been reflected
by 45 of our site managers winning NHBC Pride in the Job Awards during the
year. This is the NHBC's flagship competition for build quality across the UK,
with ten of our winners also receiving a Seal of Excellence Award; three of
which went on to win Pride in the Job Regional Awards.
Employer of Choice
Bellway is an 'Employer of Choice' in the industry by providing a safe,
diverse and inclusive environment that our colleagues can thrive in, and we
are very proud that this priority area of our 'Better with Bellway' strategy
won the 'Best Staff Development Award' at the 2024 Housebuilder Awards.
Bellway is a fully accredited Living Wage Employer, which covers both directly
employed and subcontracted staff, and we have an ongoing programme of
structured apprenticeships and graduate training to help address the current
skills gap in the UK construction industry. Overall, these measures will help
to achieve our aim of increasing the proportion of employees in 'earn and
learn' positions and support the ongoing success of the business.
Further progress
The Group continues to make good headway towards the targets and KPIs set for
the other priority areas within 'Better with Bellway', and we look forward to
reporting further progress on our sustainability strategy with our Preliminary
Results in October 2025.
All our targets and KPIs, together with further background information, are
published on our website at www.bellwayplc.co.uk/sustainability.
Jason Honeyman
Group Chief Executive
24 March 2025
Condensed Group Income Statement
Note Half year Half year Year
ended ended ended
31 January 31 January 31 July
2025 2024 2024
£m £m £m
Revenue 1 1,429.4 1,273.1 2,380.2
Cost of sales (1,197.7) (1,070.0) (2,019.0)
Analysed as:
Underlying cost of sales (1,195.6) (1,062.6) (1,999.1)
Adjusting item: net legacy building safety expense 2 (2.1) (7.4) (19.9)
Gross profit 231.7 203.1 361.2
Other operating income 31.5 22.7 50.6
Other operating expenses (31.8) (23.6) (51.8)
Administrative expenses (76.9) (69.7) (147.2)
Analysed as:
Underlying administrative expenses (76.9) (69.7) (141.8)
Adjusting item: aborted transaction costs 2 - - (5.4)
Operating profit 154.5 132.5 212.8
Finance income 8 5.0 4.7 9.5
Finance expenses 8 (18.1) (18.4) (36.3)
Analysed as:
Underlying finance expenses (10.8) (9.0) (19.2)
Adjusting item: net legacy building safety expense 2,8 (7.3) (9.4) (17.1)
Share of result of joint ventures (0.6) (1.4) (2.3)
Profit before taxation 140.8 117.4 183.7
Income tax expense 4 (40.4) (33.4) (53.2)
Profit for the period * 100.4 84.0 130.5
Earnings per ordinary share - Basic 3 84.6p 70.6p 109.8p
Earnings per ordinary share - Diluted 3 84.0p 70.1p 109.0p
Dividend per ordinary share 11 21.0p 16.0p 54.0p
* All attributable to equity holders of the parent.
Adjusting items
Note Half year ended Half year ended Year
31 January 2025 31 January 2024 ended
31 July
2024
£m £m £m
Gross profit
Gross profit per the Condensed Group Income Statement 231.7 203.1 361.2
Adjusting item: net legacy building safety expense 2 2.1 7.4 19.9
Underlying gross profit 233.8 210.5 381.1
Operating profit
Operating profit per the Condensed Group Income Statement 154.5 132.5 212.8
Adjusting item: net legacy building safety expense 2 2.1 7.4 19.9
Adjusting item: aborted transaction costs 2 - - 5.4
Underlying operating profit 156.6 139.9 238.1
Profit before taxation
Profit before taxation per the Condensed Group Income Statement 140.8 117.4 183.7
Adjusting item: net legacy building safety expense 2 9.4 16.8 37.0
Adjusting item: aborted transaction costs 2 - - 5.4
Underlying profit before taxation 150.2 134.2 226.1
Profit for the period
Profit for the period per the Condensed Group Income Statement 100.4 84.0 130.5
Adjusting item: net legacy building safety expense 2 9.4 16.8 37.0
Adjusting item: aborted transaction costs 2 - - 5.4
Adjusting item: income tax on exceptional items 2 (2.7) (4.9) (12.3)
Underlying profit for the period 107.1 95.9 160.6
Condensed Group Statement of Comprehensive Income
Note Half year Half year Year
ended ended ended
31 January 31 January 31 July
2025 2024 2024
£m £m £m
Profit for the period 100.4 84.0 130.5
Other comprehensive expense
Items that will not be recycled to the income statement:
Remeasurement losses on defined benefit pension plans (0.4) (1.1) (1.6)
Income tax on other comprehensive expense 4 0.1 0.3 0.5
Other comprehensive expense for the period, net of income tax (0.3) (0.8) (1.1)
Total comprehensive income for the period * 100.1 83.2 129.4
* All attributable to equity holders of the parent.
Condensed Group Statement of Changes in Equity
Note Issued capital Share premium Capital redemption Other reserves Retained earnings Total
reserve equity
£m £m £m £m £m £m
Half year ended 31 January 2025
Balance at 1 August 2024 14.8 183.2 20.6 1.5 3,245.3 3,465.4
Total comprehensive income for the period
Profit for the period - - - - 100.4 100.4
Other comprehensive expense * - - - - (0.3) (0.3)
Total comprehensive income for the period - - - - 100.1 100.1
Transactions with shareholders recorded directly in equity:
Dividends on equity shares 11 - - - - (45.1) (45.1)
Credit in relation to share options and tax thereon
4 - - - - 2.0 2.0
Total contributions by and distributions to shareholders - - - - (43.1) (43.1)
Balance at 31 January 2025 14.8 183.2 20.6 1.5 3,302.3 3,522.4
Half year ended 31 January 2024
Balance at 1 August 2023 15.0 182.0 20.4 1.5 3,242.7 3,461.6
Total comprehensive income for the period
Profit for the period - - - - 84.0 84.0
Other comprehensive expense * - - - - (0.8) (0.8)
Total comprehensive income for the period - - - - 83.2 83.2
Transactions with shareholders recorded directly in equity:
Dividends on equity shares 11 - - - - (112.7) (112.7)
Credit in relation to share options and tax thereon
4 - - - - 2.5 2.5
Share buyback programme and cancellation of shares - -
10 (0.2) 0.2 (0.4) (0.4)
Total contributions by and distributions to shareholders (0.2) - 0.2 - (110.6) (110.6)
Balance at 31 January 2024 14.8 182.0 20.6 1.5 3,215.3 3,434.2
Year ended 31 July 2024
Balance at 1 August 2023 15.0 182.0 20.4 1.5 3,242.7 3,461.6
Total comprehensive income for the year
Profit for the year - - - - 130.5 130.5
Other comprehensive expense * - - - - (1.1) (1.1)
Total comprehensive income for the year - - - - 129.4 129.4
Transactions with shareholders recorded directly in equity:
Dividends on equity shares 11 - - - - (131.7) (131.7)
Shares issued - 1.2 - - - 1.2
Credit in relation to share options and tax thereon
4 - - - - 5.3 5.3
Share buyback programme and cancellation of shares
10 (0.2) - 0.2 - (0.4) (0.4)
Total contributions by and distributions to shareholders (0.2) 1.2 0.2 - (126.8) (125.6)
Balance at 31 July 2024 14.8 183.2 20.6 1.5 3,245.3 3,465.4
* An additional breakdown is provided in the Condensed Group Statement of
Comprehensive Income.
Condensed Group Balance Sheet
Note At At At
31 January 31 January 31 July
2025 2024 2024
£m £m £m
ASSETS
Non-current assets
Property, plant and equipment 41.7 30.1 30.2
Financial assets 49.8 47.6 47.7
Equity accounted joint arrangements 9.3 3.5 9.8
Deferred tax assets 4 0.8 - -
Retirement benefit assets 0.6 1.4 0.9
102.2 82.6 88.6
Current assets
Inventories 5 4,764.3 4,542.4 4,714.8
Trade and other receivables 87.7 66.6 76.8
Cash and cash equivalents 7 122.0 206.6 119.5
4,974.0 4,815.6 4,911.1
Total assets 5,076.2 4,898.2 4,999.7
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 7 (130.0) (130.0) (130.0)
Trade and other payables (100.2) (97.0) (93.6)
Deferred tax liabilities 4 - (2.4) (0.7)
Provisions 6 (358.1) (401.5) (376.5)
(588.3) (630.9) (600.8)
Current liabilities
Corporation tax payable 4 (9.1) (11.1) (7.9)
Trade and other payables (812.4) (713.4) (792.9)
Provisions 6 (144.0) (108.6) (132.7)
(965.5) (833.1) (933.5)
Total liabilities (1,553.8) (1,464.0) (1,534.3)
Net assets 3,522.4 3,434.2 3,465.4
EQUITY
Issued capital 10 14.8 14.8 14.8
Share premium 183.2 182.0 183.2
Capital redemption reserve 10 20.6 20.6 20.6
Other reserves 1.5 1.5 1.5
Retained earnings 3,302.3 3,215.3 3,245.3
Total equity 3,522.4 3,434.2 3,465.4
Condensed Group Cash Flow Statement
Note Half year ended Half year ended Year
31 January 2025 31 January 2024 ended
31 July
2024
£m £m £m
Cash flows from operating activities
Profit for the period 100.4 84.0 130.5
Depreciation charge 2.7 2.6 5.1
Loss on the sale of property, plant and equipment 0.1 - -
Finance income 8 (5.0) (4.7) (9.5)
Finance expenses 8 18.1 18.4 36.3
Share-based payment expense 2.4 2.3 4.5
Share of post tax result of joint ventures 0.6 1.4 2.3
Income tax expense 4 40.4 33.4 53.2
(Increase)/decrease in inventories (49.5) 33.2 (139.2)
(Increase)/decrease in trade and other receivables (11.5) 21.6 11.5
Increase/(decrease) in trade and other payables 11.0 (167.3) (98.8)
Decrease in provisions 6 (14.4) (7.5) (16.1)
Cash from/(utilised in) operations 95.3 17.4 (20.2)
Interest paid (3.3) (3.3) (6.8)
Income tax paid (40.3) (15.1) (38.5)
Net cash inflow/(outflow) from operating activities 51.7 (1.0) (65.5)
Cash flows from investing activities
Acquisition of property, plant and equipment (6.0) (0.9) (1.4)
Increase in loans to joint ventures (0.6) (7.0) (13.9)
Dividends from joint ventures 1.0 - 2.0
Interest received 2.4 2.9 5.3
Net cash outflow from investing activities (3.2) (5.0) (8.0)
Cash flows from financing activities
Payment of lease liabilities (0.9) (1.8) (3.6)
Proceeds from the issue of share capital on exercise of share options - - 1.2
Share buyback programme 10 - (34.9) (34.9)
Dividends paid 11 (45.1) (112.7) (131.7)
Net cash outflow from financing activities (46.0) (149.4) (169.0)
Net increase/(decrease) in cash and cash equivalents 2.5 (155.4) (242.5)
Cash and cash equivalents at beginning of period 119.5 362.0 362.0
Cash and cash equivalents at end of period 7 122.0 206.6 119.5
Notes
Basis of preparation
Bellway p.l.c. (the 'Company') is a company incorporated in England and Wales.
These condensed consolidated interim financial statements, prepared to 31
January 2025, include the results of the Company, its subsidiaries and the
Group's interest in joint arrangements (together referred to as the
'Group').
These condensed consolidated interim financial statements are unaudited and
were authorised for issue by the Board on 24 March 2025.
a) Basis of preparation
This set of condensed consolidated interim financial statements has been
prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by
the UK.
The comparative figures for the financial year ended 31 July 2024 are not the
Group's statutory financial statements for that financial year as defined in
section 434 of the Companies Act 2006. Those financial statements have been
reported on by the Group's auditor and delivered to the Registrar of
Companies. The report of the auditor was (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
The annual financial statements of the Group for financial year ending 31 July
2025 will be prepared in accordance with UK adopted International Accounting
Standards ('IAS'). As required by the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority, these condensed consolidated interim
financial statements have been prepared applying the accounting policies and
presentation that were applied in the preparation of the Group's published
consolidated financial statements for the year ended 31 July 2024.
b) Going concern
The Group's activities are financed principally by a combination of ordinary
shares and cash in hand less debt. At 31 January 2025, Bellway had net debt
of £8.0 million(2) (note 7), having cash inflows of £2.5 million (note 7)
during the period, including £95.3 million of cash generated from operations.
The Group has operated within all its debt covenants throughout the period,
and covenant compliance was considered as part of the going concern
assessment. In addition, the Group had bank facilities of £400.0 million at
31 January 2025, expiring in tranches up to December 2028. Furthermore, in
February 2021 the Group drew down a sterling US Private Placement ('USPP') for
a total amount of £130.0 million, as part of its ordinary course of business
financing arrangements, which has maturity dates in 2028 and 2031. In
aggregate, the Group had committed debt lines of £530.0 million at 31 January
2025.
Including committed debt lines and cash, Bellway had access to total funds of
£522.0 million, along with net current assets (excluding cash) of £3,886.5
million at 31 January 2025, providing the Group with appropriate liquidity to
meet its current liabilities as they fall due.
The Group's internal forecasts have been regularly updated, incorporating our
actual experience along with our expected future outturn. The latest available
base forecast has been sensitised, setting out the Group's resilience to the
principal risks and uncertainties in the most severe but plausible scenario.
The sensitivity includes a recession due to economic uncertainty and a
deterioration in customer confidence. This could lead to a reduction in both
the total number of legal completions and the private average selling price,
with overheads, land spend and construction spend reducing accordingly.
This sensitivity includes the following principal assumptions:
§ Private completions in H2 FY25 are supported by the forward order book. In
the 12 months to 31 July 2026, private completions reduce by around 50%
compared to the 12-month pre-stress peak in FY22. This is followed by a
gradual recovery based on the lower base position.
Notes (continued)
Basis of preparation (continued)
b) Going concern (continued)
§ Private average selling price in H2 FY25 remains in line with internal
forecasts due to the order book position. In the 12 months to 31 July 2026,
the private average selling price reduces by 10% compared to the latest
achieved pricing. This is followed by a gradual recovery based on the lower
base position.
§ These assumptions reflect the Group's experience in the 2008-09 Global
Financial Crisis.
A number of prudent mitigating actions were incorporated into the plausible
but severe downside scenario, including:
§ Plots in the land bank only being replaced at the same rate that they are
utilised.
§ Construction spend is reduced in line with housing revenue.
§ Dividends were reduced in line with earnings.
The sensitivity analysis was modelled over the period to 31 July 2026 for the
going concern assessment. In addition to the scenario, several additional
mitigating measures remain available to management that were not included in
the scenario. These include withholding discretionary land spend and instead
trading out of the substantial existing land holdings.
In the scenario, the Group had significant headroom in both its financial debt
covenants and existing debt facilities and met its liabilities as they fall
due. In relation to climate risks, and in particular the requirement of the
Group to reduce carbon emissions, the going concern assessment is not
considered to be materially affected by the Future Homes Standard.
The Directors consider that the Group is well placed to manage business and
financial risks in the current economic environment. Consequently, the
Directors are confident that the Group will have sufficient funds to continue
to meet its liabilities as they fall due for the period to 31 July 2026,
aligning with the first year end after the minimum 12 month assessment period,
and have therefore prepared the condensed consolidated interim financial
statements on a going concern basis.
c) Accounting policies
Effect of new accounting standards and amendments
The adoption of the new accounting standards and amendments effective for the
first time in these condensed consolidated interim financial statements have
not had a material effect on the Groups' equity or profit for the period.
d) Accounting estimates and judgements
While preparing these condensed consolidated interim financial statements, the
Directors are required to make significant estimates and judgements that could
have a significant effect on these financial statements when applying the
Group's accounting policies.
When preparing these condensed consolidated interim financial statements, the
major judgements in applying the Group's accounting policies and the major
sources of estimation uncertainty were those applied in the Group's Annual
Report and Accounts for the year ended 31 July 2024.
e) Seasonality
In common with the rest of the UK housebuilding industry, activity occurs
throughout the year, but is subject to the two main house selling seasons of
spring and autumn. As these seasons fall in separate half years, the Group's
financial results are not usually subject to significant seasonal variations.
Notes (continued)
Performance for the period
1. Revenue
Segmental analysis
The Executive Board (the Chief Operating Decision Maker as defined in IFRS 8
'Operating Segments') regularly reviews the Group's performance and balance
sheet position at both a consolidated and divisional level. Each division is
an operating segment as defined by IFRS 8 in that the Executive Board assess
performance and allocates resources at this level. All of the divisions have
been aggregated in to one reporting segment on the basis that they share
similar economic characteristics including:
§ National supply agreements are in place for key inputs including materials.
§ Debt is raised centrally and the cost of capital is the same at each
division.
§ Sales demand at each division is subject to the same macroeconomic factors,
such as mortgage availability and government policy.
Additional information on average selling prices and the unit sales split
between private and social has been included in the Financial Review. The
Board does not, however, consider these categories to be separate reportable
segments as they review the entire operations at a consolidated and divisional
level when assessing performance and making decisions about the allocation of
resources.
Revenue from contracts with customers
An analysis of the Group's revenue is as follows:
Housing completions Revenue
Half year ended Half year ended Year Half year ended Half year ended Year
31 January 31 January ended 31 January 31 January ended
2025 2024 31 July 2025 2024 31 July
2024 2024
Number Number Number £m £m £m
Housing - private 3,617 3,078 5,758 1,251.1 1,076.0 2,002.3
Housing - social 960 1,014 1,896 170.5 189.6 354.4
Total housing 4,577 4,092 7,654 1,421.6 1,265.6 2,356.7
Non-housing revenue - - - 7.8 7.5 23.5
Total 4,577 4,092 7,654 1,429.4 1,273.1 2,380.2
Notes (continued)
2. Net legacy building safety expense and exceptional items
Profit before taxation has been arrived at after recognising the following
items in the income statement:
Half year ended 31 January 2025 Half year ended 31 January 2024
SRT and associated review Structural defects Total net legacy building safety expense SRT and associated review Structural defects Total net legacy building
safety expense
£m £m £m £m £m £m
Provisions (note 6) 3.2 (0.9) 2.3 8.0 (0.6) 7.4
Reimbursement assets (0.2) - (0.2) - - -
Net cost of sales (note 6) 3.0 (0.9) 2.1 8.0 (0.6) 7.4
Finance expenses (notes 6, 8) 6.4 0.9 7.3 8.8 0.6 9.4
Total net legacy building safety expense 9.4 - 9.4 16.8 - 16.8
Year ended 31 July 2024
SRT and associated review Structural defects Total net legacy building Aborted transaction costs Total adjusting items
safety expense
£m £m £m £m £m
Provisions 6.1 14.1 20.2 - 20.2
Reimbursement assets (0.3) - (0.3) - (0.3)
Net cost of sales 5.8 14.1 19.9 - 19.9
Administrative expenses - - - 5.4 5.4
Finance expenses (note 8) 15.9 1.2 17.1 - 17.1
Total net legacy building safety expense and exceptional items 21.7 15.3 37.0 5.4 42.4
The income tax rate applied to the total net legacy building safety expense
and adjusting items in the income statement is the Group's standard rate of
income tax, including both corporation tax and Residential Property Developer
Tax ('RPDT'), of 29.0% (31 January 2024 - 29.0%, 31 July 2024 - 29.0%).
SRT and associated review
Bellway continues to act responsibly with regards to building and resident
safety, and this is reflected by the significant resource and funding the
Group has committed to remediate its legacy apartments.
In March 2023 the Group signed the SRT with MHCLG. Under the terms of the SRT,
developers have agreed to identify and remediate life-critical fire safety
defects in residential buildings over 11 metres in height that they have
developed or refurbished since April 1992. The Group contractually committed
to remediate its legacy buildings in both Wales and Scotland by signing the
Pact with The Welsh Ministers (the 'Pact') in May 2023 and the Scottish Safer
Buildings Accord in July 2023.
Signing the SRT has led to improved clarity on the standards required for
internal and external remediation, including Publicly Available Specification
('PAS') 9980:2022, which is the code of practice for Fire Risk Appraisals of
External Wall construction ('FRAEW'). Buildings are deemed to be assessed
under the requirements of the SRT when a qualifying assessment has been
approved by the MHCLG. This requires the completion of both a FRAEW and a Fire
Safety Assessment ('FSA').
Notes (continued)
2. Net legacy building safety expense and exceptional items (continued)
In total, for the half year ended 31 January 2025 Bellway set aside a net
exceptional pre-tax expense of £9.4 million (2024 - £16.8 million), in
relation to the SRT and associated review. Of this expense, a net £3.0
million (2024 - £8.0 million) is recognised in cost of sales and an adjusting
finance expense of £6.4 million (2024 - £8.8 million) in relation to the
unwinding of the discount of the provision to present value. The net expense
recognised in cost of sales includes an expense of £10.6 million (2024 -
£10.3 million) relating to cost estimate increases, offset by £2.1 million
(2024 - £7.8 million expense) following an increase (2024 - decrease) in
discount rates during the period (note 6), provision releases of £5.3 million
(2024 - £10.1 million), and one-off cost recoveries of £0.2 million (2024 -
£nil).
The total amount Bellway has set aside in relation to the SRT and associated
review since 2017 is £619.3 million (31 July 2024 - £609.7 million). Costs
have been provided regardless of whether Bellway still retains ownership of
the freehold interest in the building or whether warranty providers have a
responsibility to carry out remedial works.
The provision has been calculated using cost estimates based on our extensive
experience to date, using analysis of previously tendered works and prudent,
professional estimates based on knowledge of known issues. In addition, on
developments where full investigations have not yet been undertaken or cost
reports obtained, costs to date on similar developments have been used to
estimate the likely cost. We have also made assumptions with regards to the
likely cost of resolving potential issues, that we have not yet been made
aware of, on blocks constructed since 1992.
Cost estimates have been reviewed and updated in the period based on the
latest scopes following surveys undertaken,
tendered works and progress with remediation.
The provision calculation uses the expected timings of cash outflows which are
adjusted for future estimated cost inflation in accordance with the Build Cost
Information Service ('BCIS') index, a leading provider of cost and price
information to the construction industry. The provision is discounted back to
a present value using UK gilt rates with maturities which reflect the expected
timing of cash outflows. The unwinding of this discount is charged through the
income statement as an adjusting finance expense. The majority of the cash
outflow is expected to be over the next five years, although there will be
some residual expenditure beyond this. The anticipated timing reflects the
complex issues around remediation including identifying the works required,
design and planning obligations, interpretation of the PAS 9980:2022, liaison
and negotiations with building owners, appointment of contractors and time
taken to obtain access licences. As at 31 January 2025, and including those
buildings that have been awarded an application by the Building Safety Fund or
ACM Funds, Bellway had a total of 159 buildings where work is complete or
underway.
Total recoveries recognised since 2017 are £80.5 million (31 July 2024 -
£80.3 million). Reimbursement assets of £0.1 million (2024 - £nil) remained
outstanding at the period end.
Structural defects
During the year ended 31 July 2023 a structural defect relating to the
reinforced concrete frame was identified at a historical high-rise apartment
scheme in Greenwich, London. The current provision for the cost of the
remediation work is £45.4 million (31 July 2024 - £45.6 million). This cost
estimate is based on an expert third-party report and reflects management's
expected scope of works.
In total, for the half year ended 31 January 2025 Bellway set aside an
exceptional pre-tax expense of £nil (2024 - £nil), in relation to the
structural defects. Of this, £0.9 million of net income (2024 - £0.6
million) is recognised in cost of sales which is offset by an adjusting
finance expense of £0.9 million (2024 - £0.6 million) relating to the
unwinding of the discount of the provision to present value. The amount
recognised in cost of sales includes a credit of £0.8 million (2024 - £0.9
million) relating to provisions releases and £0.1 million (2024 - £0.3
million expense) following an increase (2024 - decrease) in discount rates
during the period (note 6).
Notes (continued)
2. Net legacy building safety expense and exceptional items (continued)
The provision calculation uses the expected timings of cash outflows which are
adjusted for future estimated cost inflation in accordance with the BCIS
index. The provision is discounted back to a present value using UK gilt rates
with maturities which reflect the expected timing of cash outflows. The
unwinding of this discount is charged through the income statement as an
adjusting finance expense.
The Group has carried out a review of other buildings constructed by, or on
behalf of Bellway, where the same third parties responsible for the design of
the frame in the Greenwich development have been involved. To date, no other
similar design issues with reinforced concrete frames have been identified.
We are actively seeking recoveries in relation to the structural defect
identified, but as these are not virtually certain at the balance sheet date,
no reimbursement assets have been recognised.
The cash outflow is expected to be over the next three years.
Aborted transaction costs
During the previous financial year, the Group announced that it made an
all-share offer to acquire Crest Nicholson Holdings plc. On 13 August 2024,
the Board decided not to progress with this acquisition and recognised £nil
(31 January 2024 - £nil, 31 July 2024 - £5.4 million) of costs associated
with this aborted transaction as exceptional.
3. Earnings per ordinary share
Basic earnings per ordinary share is calculated by dividing profit for the
period by the weighted average number of ordinary shares in issue during the
six month period (excluding the weighted average number of ordinary shares
held by the Bellway Employee Share Trust (1992) which are treated as
cancelled).
Diluted earnings per ordinary share uses the same profit for the period figure
as the basic calculation. The weighted average number of shares has been
adjusted to reflect the dilutive effect of outstanding share options allocated
under employee share schemes where the market value exceeds the option
price. Diluted earnings per ordinary share is calculated by dividing
earnings by the diluted weighted average number of ordinary shares.
Reconciliations of the profit for the period and weighted average number of
shares used in the calculations are outlined below:
( ) Profit for the period Weighted average number of ordinary Earnings per share Profit for the period Weighted average Earnings per share
shares number of ordinary
shares
2025 2025 2025 2024 2024 2024
£m Number p £m Number p
For basic earnings per ordinary share 100.4 118,656,710 84.6 84.0 119,014,789 70.6
Dilutive effect of options and awards 898,347 (0.6) 764,651 (0.5)
For diluted earnings per ordinary share 100.4 119,555,057 84.0 84.0 119,779,440 70.1
Notes (continued)
3. Earnings per ordinary share (continued)
Underlying basic and underlying diluted earnings per share exclude the effect
of adjusting items and any associated net tax amounts. Reconciliations of
these are outlined below:
( ) Underlying Weighted average number of ordinary Underlying earnings per share Underlying Weighted average Underlying earnings per share
profit for the period shares profit for the period number of ordinary
shares
2025 2025 2025 2024 2024 2024
£m Number p £m Number p
For basic underlying earnings per ordinary share 107.1 118,656,710 90.3 95.9 119,014,789 80.6
Dilutive effect of options and awards 898,347 (0.7) 764,651 (0.5)
For diluted underlying earnings per ordinary share
107.1 119,555,057 89.6 95.9 119,779,440 80.1
Taxation
4. Taxation
The income tax expense includes both corporation tax and RPDT. This is
calculated by applying the best estimate of the expected annual corporation
tax rate and RPDT rate to the profit before taxation adjusted for non-taxable
items and enhanced deductions.
The effective rate of taxation, including RPDT, for the period is 28.7% (31
January 2024 - 28.4%, 31 July 2024 - 29.0%).
As part of the UK adoption of the Organisation for Economic Cooperation and
Development ('OECD') Pillar Two rules, the UK government announced two new
taxes, the Multinational Top-up Tax and the Domestic Top-up Tax which are
designed to ensure corporations pay tax at a rate of at least 15%. The
Domestic Top-up Tax applied to the Group from 1 August 2024. As the Group's
current effective tax rate is in excess of 15%, it is expected the
introduction of this tax will not affect Bellway. The Multinational Top-up Tax
is not expected to affect Bellway. The Group applies the exception to
recognising and disclosing information about deferred tax assets and
liabilities relating to Pillar Two income taxes, as provided in the amendments
to IAS 12 issued in May 2023.
The carrying amount of the gross deferred tax assets are reviewed at each
balance sheet date and are recognised to the extent that there will be
sufficient taxable profits to allow the asset to be recovered.
The deferred tax assets/(liabilities) of the Group at 31 January 2025 were
valued at the substantively enacted corporation tax and RPDT rates of 29.0%
(31 January 2024 - 29.0%, 31 July 2024 - 29.0%). At 31 January 2025 the
Group recognised a deferred tax asset of £0.8 million (31 January 2024 -
deferred tax liability of £2.4 million, 31 July 2024 - deferred tax liability
of £0.7 million).
Working capital
5. Inventories
Half year Half year Year
ended ended ended
31 January 31 January 31 July
2025 2024 2024
£m £m £m
Land 2,538.2 2,438.2 2,431.4
Work-in-progress 2,064.2 1,953.8 2,123.9
Showhomes 146.3 130.3 145.0
Part-exchange properties 15.6 20.1 14.5
Total 4,764.3 4,542.4 4,714.8
Notes (continued)
5. Inventories (continued)
In the ordinary course of business, inventories have been written back by a
net £2.8 million in the period (31 January 2024 - written down by £4.6
million, 31 July 2024 - written down by £8.2 million).
The Directors consider all inventories to be essentially current in nature
although the Group's operational cycle is such that a proportion of
inventories will not be realised within 12 months. It is not possible to
determine with accuracy when specific inventory will be realised as this is
subject to a number of factors including consumer demand and planning
permission delays.
6. Provisions and reimbursement assets
SRT and associated review Structural defects Total legacy building safety improvements
Provision Reimbursement assets Total Provision Reimbursement assets Total Provision Reimbursement assets Total
£m £m £m £m £m £m £m £m £m
At 1 August 2024 (463.6) 0.1 (463.5) (45.6) - (45.6) (509.2) 0.1 (509.1)
Adjusting item - cost of sales (note 2) (3.2) 0.2 (3.0) 0.9 (2.1)
0.9 - (2.3) 0.2
Analysed as:
Additions (10.6) 0.2 (10.4) - - - (10.6) 0.2 (10.4)
Released 5.3 - 5.3 0.8 - 0.8 6.1 - 6.1
Change in 2.1 - 2.1 0.1 2.2
discount rate 0.1 - 2.2 -
Utilised/(received) 16.5 (0.2) 16.3 0.2 - 0.2 16.7 (0.2) 16.5
Unwinding of discount (notes 2,8) (6.4) (0.9) - (0.9) (7.3) - (7.3)
(6.4) -
At 31 January 2025 (456.6) (45.4) - (45.4) (502.1) 0.1 (502.0)
(456.7) 0.1
Provisions are classified as follows:
SRT and associated review Structural defects Total legacy building safety improvements
£m £m £m
Current (142.5) (1.5) (144.0)
Non-current (314.2) (43.9) (358.1)
Total (456.7) (45.4) (502.1)
The Group has established a provision for the cost of performing fire remedial
works on a number of legacy developments and a structural defect relating to a
historical high rise apartment scheme (note 2).
Financing
7. Analysis of net debt
At 1 August Cash At 31 January
2024 flows 2025
£m £m £m
Cash and cash equivalents 119.5 2.5 122.0
Fixed rate sterling USPP notes (130.0) - (130.0)
Net debt (10.5) 2.5 (8.0)
Notes (continued)
8. Finance income and expenses
Half year Half year ended Year
ended 31 January ended
31 January 2024 31 July
2025 2024
£m £m £m
Interest receivable on short-term bank deposits 1.8 2.3 3.8
Net interest receivable on defined benefit asset - 0.1 -
Other interest receivable 3.2 2.3 5.7
Finance income
5.0 4.7 9.5
Interest payable on bank loans 1.6 1.8 3.8
Interest payable on fixed rate sterling USPP notes 1.7 1.7 3.4
Interest on deferred term land payables 7.1 5.3 11.1
Unwinding of the discount on the legacy building safety improvements provision 7.3 9.4 17.1
(notes 2, 6)
Interest payable on leases 0.4 0.2 0.4
Other interest payable - - 0.5
Finance expenses
18.1 18.4 36.3
The unwinding of the discount on the legacy building safety improvements
provision is an adjusting item (note 2).
9. Financial instruments - fair value disclosures
The fair value of financial assets and liabilities are determined based on
discounted cash flow analysis using current market rates for similar
instruments.
The carrying values of the majority of financial assets and liabilities
reasonably approximate their fair values.
The fair value of derivative financial instruments at fair value through
profit or loss ('FVTPL') held by the Group is determined using a discounted
cash flow valuation technique at forward exchange rates and therefore can be
considered as a level 2 fair value as defined within IFRS 13 'Fair Value
Measurement'.
The Group does not hold any financial assets or liabilities whose fair value
would be considered as a level 1 or 3 fair value as defined within IFRS 13.
Notes (continued)
Shareholder capital
10. Reserves
Issued capital
Half year ended 31 January 2025 Half year ended 31 January 2024 Year ended 31 July 2024
Number Number Number
000 £m 000 £m 000 £m
Allotted, called up and fully paid 12.5p ordinary shares
At start of the period 118,980 14.8 120,559 15.0 120,559 15.0
Issued on exercise of options 2 - 1 - 52 -
Buyback and cancellation of shares - - (1,631) (0.2) (1,631) (0.2)
At end of period 118,982 14.8 118,929 14.8 118,980 14.8
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
During the half year ended 31 January 2024, the Company purchased 1,631,263 of
its ordinary shares for a total consideration of £34.9 million, including
transaction costs of £0.4 million. All shares purchased were for
cancellation, as part of the £100.0 million share buyback programme entered
into on 28 March 2023 and completed on 27 October 2023.
Own shares held
The Group holds shares within the Bellway Employee Share Trust (1992) (the
'Trust'), on which dividends have been waived, for participants of certain
share-based payment schemes. The cost of these is charged to retained
earnings.
Half year ended 31 January Half year ended 31 January Year
2025 2024 ended
31 July
2024
Number Number Number
Allotted, called up and fully paid 12.5p ordinary shares
At start of the period 326,114 327,202 327,202
Transferred to employees or Directors (1,000) (1,000) (1,088)
At end of period
325,114 326,202 326,114
Half year ended 31 January Half year ended 31 January Year
2025 2024 ended
31 July
2024
£m £m £m
Cost of shares held in Trust 8.8 8.8 8.8
Market value of shares held in Trust 8.5 9.0 9.3
Capital redemption reserve
On 7 April 2014 the Group redeemed 20,000,000 £1 preference shares, being all
of the preference shares in issue. An amount of £20.0 million, equivalent
to the nominal value of the shares redeemed, was transferred to a capital
redemption reserve on the same date.
Over the course of the calendar year 2023 the Group purchased 4,560,057 of its
own shares which it cancelled. On cancellation of the shares, the aggregate
nominal value of £0.6 million was transferred from issued capital to the
capital redemption reserve.
This reserve is not distributable.
Notes (continued)
11. Dividends on equity shares
Amounts recognised as distributions to equity holders in the period:
Half year Half year Year
ended ended ended
31 January 31 January 31 July
2025 2024 2024
£m £m £m
Final dividend for the year ended 31 July 2024 of 38.0p per share (2023 - 45.1 112.7 112.7
95.0p)
Interim dividend for the year ended 31 July 2024 of 16.0p per share (2023 - - - 19.0
45.0p)
45.1 112.7 131.7
19.0
Interim dividend for the year ending 31 July 2025 of 21.0p per share (2024 - 24.9 19.0
16.0p)
The interim dividend was approved by the Board on 24 March 2025 and, in
accordance with IAS 10 'Events after the Reporting Period', has not been
included as a liability in these condensed consolidated interim financial
statements. The interim dividend will be paid on Tuesday 1 July 2025 to all
ordinary shareholders on the Register of Members on Friday 23 May 2025. The
ex-dividend date is Thursday 22 May 2025.
Contingencies and related parties
12. Contingent liabilities
SRT and associated review
We continue to take a proactive approach to nationwide concerns with regards
to fire safety in high-rise buildings across the UK. Bellway recognises its
responsibilities in its legacy apartment portfolio and continues to review
combustion risks, in external wall systems, on past high-rise developments.
As detailed in note 2, Bellway has identified a number of developments, which
obtained building regulation approval at the time of construction, where the
building materials used may not fully comply with the most recent government
guidance or where remedial works may need to be performed in line with the
SRT, Welsh Pact or Scottish Safer Buildings Accord. For these developments we
have established that the cost of the remedial works satisfies the accounting
requirements of a provision at the balance sheet date. While a prudent
approach has been taken, the extent of the provision could increase or reduce
in line with normal accounting practice, if new issues are identified or if
estimates change, as Bellway and building owners continue to undertake
investigative works on these and other schemes within the legacy portfolio.
Market investigation by the Competition and Markets Authority
The UK Competition and Markets Authority ('CMA') launched a market study into
the housebuilding sector in England,
Scotland and Wales in February 2023, the results of which were published in
the CMA's final report on 26 February 2024.
During the study, the CMA stated that it also found evidence which indicated
some housebuilders may be sharing commercially sensitive information with
competitors, which could be influencing the build-out rate of sites and the
prices of new homes. While the CMA does not consider such sharing of
information to be one of the main factors in the persistent under delivery of
homes, the CMA is concerned that it may weaken competition in the market. As a
result, the CMA launched an investigation under the Competition Act 1998 into
eight housebuilders, including Bellway. The CMA has not yet reached any
conclusions, and Bellway will continue to engage positively and co-operate
fully with the CMA during the investigation.
Notes (continued)
13. Related party transactions
There have been no related party transactions in the first six months of the
current financial year which have materially affected the financial position
or performance of the Group.
The related parties are consistent with those disclosed in the Group's Annual
Report and Accounts for the year ended 31 July 2024, other than the following
changes:
§ the dissolution of DFE TW Residential Limited, a 50% owned joint
arrangement;
§ the dissolution of MI New Home Insurance PCC Limited and HBF Insurance PCC
Limited;
§ the incorporation of Bellway Joint Ventures Limited, a 100% owned
subsidiary;
§ Artex Insurance (Guernsey) PCC Limited has changed its company name to
Artex Axcell (Guernsey) PCC Limited; and
§ the changes in Directors as set out in the Statement of Directors'
Responsibilities.
Notes (continued)
Other information
14. Alternative performance measures
Bellway uses a variety of alternative performance measures ('APMs') which,
although financial measures of either historical or future performance,
financial position or cash flows, are not defined or specified by IFRSs. The
Directors use a combination of APMs and IFRS measures when reviewing the
performance, position and cash of the Group.
The APMs used by the Group are defined below:
§ Underlying gross profit and underlying operating profit - Both of these
measures are stated before net legacy building safety expense and exceptional
items, and are reconciled to total gross profit and total operating profit on
the face of the Condensed Group Income Statement. The Directors consider
that the removal of the net legacy building safety expense and exceptional
items provides a better understanding of the underlying performance of the
Group.
§ Underlying gross margin - This is gross profit before net legacy building
safety expense and exceptional items divided by total revenue. The Directors
consider this to be an important indicator of the underlying trading
performance of the Group.
§ Underlying administrative expenses as a percentage of revenue - This is
calculated as the administrative expenses before any directly attributable
administrative expenses relating to the net legacy building safety expense and
exceptional items divided by total revenue. The Directors consider this to be
an important indicator of how efficiently the Group is managing its
administrative overhead base.
§ Administrative expenses as a percentage of revenue - This is calculated as
the total administrative expenses divided by total revenue. The Directors
consider this to be an important indicator of how efficiently the Group is
managing its administrative overhead base.
§ Underlying operating margin - This is operating profit before net legacy
building safety expense and exceptional items divided by total revenue. The
Directors consider this to be an important indicator of the operating
performance of the Group.
§ Net underlying finance expense - This is the net finance expense before any
directly attributable finance expense or finance income relating to the net
legacy building safety expense and exceptional items. The Directors consider
this to be an important measure when assessing whether the Group is using the
most cost effective source of finance.
§ Net finance expense - This is finance expenses less finance income. The
Directors consider this to be an important measure when assessing whether the
Group is using the most cost effective source of finance.
§ Underlying profit before taxation - This is the profit before taxation
before net legacy building safety expense and exceptional items. The
Directors consider this to be an important indicator of the profitability of
the Group before taxation.
§ Underlying profit for the period - This is the profit for the period before
net legacy building safety expense and exceptional items. The Directors
consider this to be an important indicator of the profitability of the Group.
§ Underlying earnings per share - This is calculated as underlying profit for
the period divided by the weighted average number of ordinary shares in issue
during the period (excluding the weighted average number of ordinary shares
held by the Group or Trust which are treated as cancelled).
§ Underlying dividend cover - This is calculated as underlying profit for the
period per ordinary share for the period divided by the dividend per ordinary
share relating to that period. At the half year the dividend per ordinary
share is the approved interim ordinary dividend, and for the full year it is
the interim dividend paid plus the proposed final dividend. The Directors
consider this an important indicator of the proportion of underlying earnings
paid to shareholders and reinvested in the business.
Notes (continued)
14. Alternative performance measures (continued)
§ Dividend cover - This is calculated as earnings per ordinary share for the
period divided by the dividend per ordinary share relating to that period.
At the half year the dividend per ordinary share is the approved interim
ordinary dividend, and for the full year it is the interim dividend paid plus
the proposed final dividend. The Directors consider this an important
indicator of the proportion of earnings paid to shareholders and reinvested in
the business.
§ Capital invested in land, net of land creditors, and work-in-progress -
This is calculated as shown in the table below. The Directors consider this
as an important indicator of the net investment by the Group in the period to
achieve future growth.
31 January 2025 31 January 2024
31 January 2025 31 July Movement 31 January 2024 31 July Movement
2024 2023
Per balance sheet £m £m £m £m £m £m
Land 2,538.2 2,431.4 106.8 2,438.2 2,578.8 (140.6)
Work-in-progress 2,064.2 2,123.9 (59.7) 1,953.8 1,861.6 92.2
Increase/(decrease) in capital invested in land and work-in-progress in the
period
47.1 (48.4)
Land creditors (289.7) (225.3) (64.4) (238.5) (368.8) 130.3
(Decrease)/increase in capital invested in land, net of land creditors, and
work-in-progress in the period
(17.3) 81.9
§ Net asset value per ordinary share ('NAV') - This is calculated as total
net assets divided by the number of ordinary shares in issue at the end of
each period. The Directors consider this to be a proxy when reviewing
whether value, on a share by share basis, has increased or decreased in the
period.
§ Capital employed - Capital employed is defined as the total of equity and
net debt. Equity is not adjusted where the Group has net cash. The
Directors consider this to be an important indicator of the operating
efficiency and performance of the Group.
§ Underlying return on capital employed ('underlying RoCE') - This is
calculated as operating profit before net legacy building safety expense and
exceptional items divided by the average capital employed. Average capital
employed is calculated based on opening and half year capital employed. The
calculation is shown in the table below. The Directors consider this to be
an important indicator of whether the Group is achieving a sufficient return
on its investments.
( ) 31 January 2025 31 January 2024
Capital employed Land creditors Capital employed including land creditors Capital employed Land creditors Capital employed including land creditors
£m £m £m £m £m £m
Underlying operating profit 156.6 156.6 139.9 139.9
Capital employed/land creditors:
Opening 3,475.9 225.3 3,701.2 3,461.6 368.8 3,830.4
Half year 3,530.4 289.7 3,820.1 3,434.2 238.5 3,672.7
257.5 3,760.7
Average 3,503.2 3,447.9 303.7 3,751.6
Annualised underlying return on capital employed
8.9% 8.3% 8.1% 7.5%
Notes (continued)
14. Alternative performance measures (continued)
§ Return on capital employed ('RoCE') - This is calculated as operating
profit divided by the average capital employed. Average capital employed is
calculated based on opening and half year capital employed. The calculation
is shown in the table below. The Directors consider this to be an important
indicator of whether the Group is achieving a sufficient return on its
investments.
( ) 31 January 2025 31 January 2024
Capital employed Land creditors Capital employed including land creditors Capital employed Land creditors Capital employed including land creditors
£m £m £m £m £m £m
Operating profit 154.5 154.5 132.5 132.5
Capital employed/land creditors:
Opening 3,475.9 225.3 3,701.2 3,461.6 368.8 3,830.4
Half year 3,530.4 289.7 3,820.1 3,434.2 238.5 3,672.7
257.5 3,760.7
Average 3,503.2 3,447.9 303.7 3,751.6
Annualised return on capital employed 8.8% 8.2% 7.7% 7.1%
§ Asset turn - Asset turn is calculated as revenue divided by the average
capital employed. Average capital employed is calculated based on opening
and half year capital employed. The Directors consider this to be an
important indicator of how efficiently the Group is using its assets to
generate revenue.
§ Underlying post-tax return on equity - This is calculated as profit for the
period before net legacy building safety expense and exceptional items,
divided by the average of the opening and half year net assets. The
Directors consider this to be a good indicator of the operating efficiency of
the Group.
31 January 2025 31 January 2024
£m £m
Underlying profit for the period 107.1 95.9
Net assets:
Opening 3,465.4 3,461.6
Half year 3,522.4 3,434.2
Average 3,493.9 3,447.9
Annualised underlying post-tax return on equity 6.1% 5.6%
§ Post-tax return on equity - This is calculated as profit for the period
divided by the average of the opening and half year net assets. The
Directors consider this to be a good indicator of the operating efficiency of
the Group.
31 January 2025 31 January 2024
£m £m
Profit for the period 100.4 84.0
Net assets:
Opening 3,465.4 3,461.6
Half year 3,522.4 3,434.2
Average 3,493.9 3,447.9
Annualised post-tax return on equity 5.7% 4.9%
Notes (continued)
14. Alternative performance measures (continued)
§ Total growth in value per ordinary share - The Directors use this as a
proxy for the increase in shareholder value since 31 January 2022. A period
of 3 years is used to reflect medium-term growth.
Net asset value per ordinary share:
At 31 January 2025 2,960p
At 31 January 2022 2,779p
Net asset value growth per ordinary share 181p
Dividend paid per ordinary share:
12 months to 31 January 2025 54.0p
12 months to 31 January 2024 140.0p
12 months to 31 January 2023 140.0p
Cumulative dividends paid per ordinary share 334.0p
Total growth in value per ordinary share 515.0p
§ Annualised accounting return in NAV and dividends paid since 31 January
2022 - This is calculated as the annualised increase in net asset value per
ordinary share plus cumulative ordinary dividends paid per ordinary share
since 31 January 2022 (as detailed above) divided by the net asset value per
ordinary share at 31 January 2022. The Directors use this as a proxy for the
increase in shareholder value since 31 January 2022.
Net asset value growth per ordinary share 181p
Dividend paid per ordinary share 334.0p
Total growth in value per ordinary share 515.0p
Net asset value per ordinary share at 31 January 2022 2,779p
Total value per ordinary share 3,294.0p
Annualised accounting return = (3,294.0/2,779)^(1/3)-1 5.8%
Notes (continued)
14. Alternative performance measures (continued)
§ Annualised accounting return in NAV and dividends paid since 31 January
2015 - This is calculated as the annualised increase in net asset value per
ordinary share plus cumulative ordinary dividends paid per ordinary share
since 31 January 2015 divided by the net asset value per ordinary share at 31
January 2015. The Directors use this as a proxy for the increase in
shareholder value since 31 January 2015.
Net asset value per ordinary share:
At 31 January 2025 2,960p
At 31 January 2015 1,181p
Net asset value growth per ordinary share 1,779p
Dividend paid per ordinary share:
12 months to 31 January 2025 54.0p
12 months to 31 January 2024 140.0p
12 months to 31 January 2023 140.0p
12 months to 31 January 2022 117.5p
12 months to 31 January 2021 50.0p
12 months to 31 January 2020 150.4p
12 months to 31 January 2019 143.0p
12 months to 31 January 2018 122.0p
12 months to 31 January 2017 108.0p
12 months to 31 January 2016 77.0p
Cumulative dividends paid per ordinary share 1,101.9p
Total growth in value per ordinary share 2,880.9p
Net asset value per ordinary share at 31 January 2015 1,181p
Total value per ordinary share 4,061.9p
Annualised accounting return = (4,061.9/1,181)^(1/10)-1 13.1%
§ Underlying capital growth in the 12 month period - This is calculated as
capital growth in the 12 month period before net legacy building safety
expense and exceptional items per share.
Capital growth in the 12 month period 126.0p
Net legacy building safety expense and exceptional items per share 20.9p
Underlying capital growth in the period 146.9p
Net asset value at 31 January 2024 2,888p
Underlying capital growth (146.9p/2,888p) 5.1%
Notes (continued)
14. Alternative performance measures (continued)
§ Capital growth in the 12 month period - This is calculated as the increase
in NAV in the 12 month period combined with the ordinary dividend paid in the
period.
Net asset value per ordinary share:
At 31 January 2025 2,960p
At 31 January 2024 2,888p
Net asset value growth per ordinary share 72p
Dividend paid per ordinary share:
12 months to 31 January 2025 54.0p
Capital growth in the 12 month period 126.0p
§ Net (debt)/cash - This is the cash and cash equivalents less bank debt and
fixed rate sterling USPP notes. Net (debt)/cash does not include lease
liabilities, which are reported within trade and other payables on the balance
sheet. The Directors consider this to be a good indicator of the financing
position of the Group. This is reconciled in note 7.
§ Average net (debt)/cash - This is calculated by averaging the net
(debt)/cash position at 1 August and each month end during the period. The
Directors consider this to be a good indicator of the financing position of
the Group throughout the period.
§ Cash generated from operations before investment in land, net of land
creditors, and work-in-progress - This is calculated as shown in the table
below. The Directors consider this as an indicator of whether the Group is
generating cash before investing in land and work-in-progress to achieve
future growth.
31 January 2025 31 January 2024
£m £m
Cash from operations 95.3 17.4
Add: (decrease)/increase in capital invested in land, net of land creditors, (17.3) 81.9
and work-in-progress in the period (as described above)
Cash generated from operations before investment in land, net of land 78.0 99.3
creditors, and work-in-progress
§ Adjusted gearing - This is calculated as the total of net (debt)/cash and
land creditors divided by total equity. The Directors believe that land
creditors are a source of long-term finance so this provides an alternative
indicator of the financial stability of the Group.
§ Gearing - This is calculated as net debt divided by total equity. The
Directors consider this to be a good indicator of the financial stability of
the Group.
§ Order book - This is calculated as the total expected sales value of
current reservations that have not legally completed. The Directors consider
this to be an important indicator of the likely future operating performance
of the Group.
§ Underlying non-cash related finance income and expenses - Underlying
non-cash related finance income and expenses consists of net interest on the
defined benefit asset, interest payable on land creditors and interest payable
on leases. The Directors consider this to be an important measure when
assessing whether the Group is using the most cost effective source of
finance.
Principal risks and uncertainties
A risk register is maintained detailing all potential risks and our risk
management processes ensure that all aspects of the Group are considered, from
strategy through to operational execution including any specialist business
areas.
The risk register is reviewed as part of our management reporting processes,
resulting in the regular assessment of risk, severity and any required
mitigating actions. The severity of risk is determined based on a defined
scoring system assessing risk impact and likelihood.
A summary of risks is reported to management, the Audit Committee and the
Board, which is mainly, but not exclusively, comprised of risks considered to
be outside of our risk appetite after mitigation. This summary is reviewed
throughout the year, with the Board systematically considering the risks and
any changes that have occurred. Once a year, via the Audit Committee, the
Board determines whether the risk management framework is appropriately
designed and operating effectively.
We have identified the following principal risks to our business:
Risk and description Strategic relevance KPIs Mitigation
Construction resources
Shortages of building materials and appropriately skilled § Failure to secure the required quantity and quality of resources causes § Number of homes sold. § Robust forecasting and forward planning of labour and materials
subcontractors at competitive prices. delays in construction, impacting the ability to deliver volume growth
requirements.
targets. § Operating profit.
§ Processes are in place to select, appoint, manage, and build long-term
§ Pricing pressures / increased costs impact returns. § Operating margin. relationships with subcontractors and suppliers.
§ EPS.
§ Gross margin.
§ Customer satisfaction score.
Environment and climate change
Failure to evolve sustainable business practices and operations in response to § There is an increased focus on the actions taken by businesses in response § Tonnes of carbon emissions per legal completion. § Continual monitoring of new and evolving requirements as part of our legal
climate change, including physical environmental impacts and transition risks to climate change and the disclosures made. Failure to improve policies,
and regulatory compliance framework, including TCFD, the Future Homes Standard
associated with new regulation, reporting requirements, and increased reporting and performance in line with new Government regulations and § Percentage of renewable electricity. and the Environment Act.
social/market expectations. heightened social/market expectations could lead to financial penalties and
reputational damage. § Tonnes of waste per home built. § Climate change and carbon reduction is a key priority under the Group's
'Better with Bellway' sustainability strategy.
§ The physical impacts of climate change (such as extreme weather) could lead Percentage of waste diverted from landfill.
to disruptions within the supply chain and build programmes. § Dedicated biodiversity, sustainability and innovations resource in place to
assess risks relating to climate change, monitor performance and drive
improvement.
§ Consultation with specialist external advisors and subject matter experts
(e.g. sustainability consultants).
§ Regular review of the design and features of new homes, along with
construction methods and the sustainability of materials, to increase energy
efficiency and reduce waste.
§ Investment in energy-saving measures for offices and sites, including
transition to REGO certified electricity.
Development and monitoring of science-based carbon reduction targets.
Economy and market
Changes in the external environment (including, but not limited to, house § Reduced affordability has a negative impact on customer demand for new § Number of homes sold. § Board level monitoring of the housing market and economic environment
price inflation, interest rates, mortgage availability, unemployment, homes and consequently our ability to generate sales at good returns.
alongside key business metrics, leading to development of action plans as
Government housing policy and post-Brexit trade agreements) reduce the § Operating profit. necessary.
affordability of new homes.
§ Operating margin. § Disciplined operating framework, strong balance sheet and low financial
gearing.
§ RoCE.
§ Product range and pricing strategy based on regional market conditions.
§ EPS.
§ Regular engagement with industry peers, representative bodies, and new
§ Gross margin. build mortgage lenders.
§ Customer satisfaction score. § Use of sales incentives such as part-exchange, and Government-backed
schemes to encourage the selling process.
§ Reservation rate.
§ Quarterly site valuations and monthly budget reviews based on latest market
§ Order book value. data.
Health and safety
A serious health and safety breach and/or incident occurs. § Failure to maintain safe working conditions would impact employee wellbeing § Number of RIDDOR seven-day reportable incidents per 100,000 site § Health and safety policy and procedures in place, supported by Group-wide
and the creation of a positive working environment. operatives. training.
§ Injury to an individual whilst at one of our business locations could delay § Health and safety incident rate. § Regular visits to sites by both our Group Health and Safety function
construction and result in criminal prosecution, civil litigation, and
(independent of divisions) and external specialist consultants to monitor
reputational damage. § Number of NHBC Pride in the Job Awards. standards and performance against health and safety policies and legislation.
§ The Board considers health and safety matters at each meeting.
Human resources
Inability to attract, recruit and retain high-quality people. § Failure to attract and retain people with appropriate skills would affect § Employee turnover. § Continued development of our Group HR function and implementation of our
our ability to perform and deliver our strategy and volume growth targets.
people strategy.
§ Number of graduates, trainees, and apprentices.
§ Established human resources programme for apprentices, graduates, and site
§ Employees who have worked for the Group for 10 years or more. management.
§ Training days per employee. § Monitoring of staff turnover and analysis of feedback from exit interviews.
§ Senior management gender split. § Competitive salary and benefits packages which are regularly reviewed and
benchmarked.
§ Percentage of staff in earning and learning roles.
§ Employee engagement activities undertaken, including an annual survey, with
§ Employee engagement survey response rate. results communicated to the Board.
§ Succession plans in place and key person dependencies identified and
mitigated.
§ Robust programme of training provided to employees which is regularly
updated and refreshed.
§ Development programmes for senior leaders and middle managers in place.
IT and security
Failure to have suitable IT systems in place that are appropriately supported § Poor performance of our systems would disrupt operational activity and § Operating profit. § Continued investment in infrastructure and security measures.
and secured. impact the delivery of our strategy.
§ Operating margin. § Group-wide systems in operation which are centrally controlled by an
§ An IT security breach could result in the loss of data, with significant
in-house IT function, supported by a specialist outsourced provider.
potential fines and reputational damage. § RoCE.
§ IT security policy and procedures in place with regular Group-wide
§ EPS. training.
§ Gross margin. § Regular review and testing of our IT security measures, contingency plans
and policies.
§ Customer satisfaction score.
§ Security Committee in place.
Land and planning
Inability to source suitable land at appropriate gross margins and return on § Insufficient land at appropriate margins, onerous planning conditions or a § Number of homes sold. § Continued development of our Group Strategic Land function and
capital employed. failure to obtain planning approval within appropriate timescales would
implementation of our land strategy.
exacerbate the challenge of developing new homes, restrict our ability to § Operating profit.
deliver volume growth targets and impact future returns.
§ Increased investment in land and more sites with DPP.
§ Operating margin.
Delays and complexity in the planning process.
§ Regular review by Group and divisions of the quantity, location, and
§ RoCE. planning status of land against growth targets to ensure our land bank
supports immediate, medium-term, and strategic requirements.
§ EPS.
§ Formal land acquisition process in place for the appraisal and approval of
§ Gross margin. all land purchases, including pre-purchase due diligence and Group level
challenge of viability assumptions.
§ Number of plots in owned and controlled land bank with DPP.
§ Group and divisional planning specialists in place to support the securing
§ Number of plots in 'pipeline'. of implementable planning permissions.
§ Number of plots in strategic land bank - positive planning status.
§ Number of plots in strategic land bank - longer-term interests.
§ Number of plots acquired with DPP.
§ Number of plots converted from medium-term 'pipeline'.
Legal and regulatory compliance
Failure to comply with legislation and regulatory requirements. § Lack of an appropriate compliance framework and/or compliance breaches § Number of homes sold. § In-house expertise from Group functions such as Company Secretariat, Legal,
could incur fines, delay business operations and lead to re-work across sites,
Health and Safety and Technical/Design, who advise and support divisions on
which will impact our reputation and profitability. § Operating profit. legal compliance and regulatory matters.
§ Operating margin. § Consultation with Government agencies, specialist external legal advisors
and subject matter experts, (e.g. fire safety engineers).
§ RoCE.
§ Strengthened Group-wide policies, guidance, and training in place supported
§ EPS. by externally facilitated whistleblowing and reporting procedures.
§ Gross margin. § Continual monitoring and review of changes to legislation and regulation,
including Government guidance, advice notes and sector specific updates.
§ Regular liaison with industry peers and the HBF on compliance requirements
and matters.
Unforeseen significant event
An unforeseen significant national or global event occurs. § The economic uncertainty brought about by an unforeseen significant § NAV. § Strong balance sheet, low financial gearing, committed bank loan facilities
national or global event could materially impact the Group's operations and
and USPP debt which would help ensure resilience during a recession.
liquidity. § Operating profit.
§ Maintenance of business resilience and continuity plans covering offices,
§ Damage to reputation if the Group is not perceived to be following § Operating margin. sites, and IT.
Government guidelines and acting responsibly.
§ RoCE. § Experienced and well-established senior management teams.
§ EPS. § Continued investment in systems and infrastructure to enable robust agile
working.
§ Total dividend per ordinary share.
§ Risk assessments in place and safe working practices implemented across
§ Gross margin. offices and sites.
§ Reservation rate. § Monitoring of Government guidelines (including the Construction Leadership
Council).
§ Order book value.
§ Regular communications with subcontractors and suppliers to understand
§ Employee turnover. their position and any potential issues with their own supply chain.
The Group also considers any emerging risks that have the potential to impact
the achievement of our strategy, but which cannot yet be fully defined and
assessed. These uncertainties are reviewed as part of our established risk
management framework, discussed regularly by management, the Audit Committee
and the Board, and elevated to principal risks (either as new risks or an
extension of existing risks) when warranted.
Glossary
Affordable Housing
Social rented and intermediate housing provided to specified eligible
households whose needs are not met by the market, at a cost low enough for
them to afford, determined with regard to local incomes and local house
prices. It is generally provided by councils and not-for-profit organisations
such as housing associations.
Average Selling Price
Calculated by dividing the total price of homes sold by the number of homes
sold.
Biodiversity Net Gain ('BNG')
Is an approach to development and land management, that aims to leave the
natural environment in a measurably better state than it was beforehand.
Cancellation Rate
The rate at which customers withdraw from a house purchase after paying the
reservation fee, but before contracts are exchanged, usually due to
difficulties in obtaining mortgage finance. Reservation fees are refunded in
accordance with the
New Homes Quality Code.
Earnings per Share ('EPS')
Profit attributable to ordinary equity shareholders divided by the weighted
average number of ordinary shares in issue during the financial period,
excluding the weighted average number of ordinary shares held by the Group or
Trust which are treated as cancelled.
Executive Board
The Executive Board is made up of the Executive Directors of Bellway p.l.c.
Home Builders' Federation ('HBF')
The HBF is an industry body representing the homebuilding industry in England
and Wales. It represents member interests on a national and regional level to
create the best possible environment in which to deliver new homes.
Land Bank
The land bank is comprised of three tiers: i) owned or unconditionally
contracted land with an implementable detailed
planning permission ('DPP'); ii) medium-term 'pipeline' land owned or
controlled by the Group, pending an implementable
DPP; iii) strategic long-term plots which are typically held under option or
through a promotion agreement.
Land with DPP
Plots owned or unconditionally contracted by the Group where there is an
implementable detailed planning permission.
Legacy Building Safety Improvements Provision
Included within this provision, there are two components (i) SRT and
associated review, and (ii) structural defects provision.
MHCLG
Ministry for Housing, Communities and Local Government formerly Department for
Levelling up, Housing and Communities ('DLUHC').
National House Building Council ('NHBC')
The NHBC is the leading warranty insurance provider and body responsible for
setting standards of construction for UK housebuilding for new and newly
converted homes.
Net Legacy Building Safety Expense
This contains the income statement movements in relation to the legacy
building safety provision and any associated reimbursement assets.
New Homes Quality Board ('NHQB')
An independent not-for-profit body which was established for the purpose of
developing a new framework to oversee reforms in the build quality of new
homes and the customer service provided by developers.
New Homes Quality Code ('NHQC')
An industry code of practice that lays out a mandatory set of requirements
which must be adopted and observed by all registered developers.
Pipeline
Plots which are either owned or contracted by the Group, pending an
implementable detailed planning permission, with development generally
expected to commence within the next three years.
Planning Permission
Usually granted by the local planning authority, this permission allows a plot
of land to be built on, change its use or for an
existing building to be redeveloped or altered.
Permission is either 'outline' when detailed plans are still to be approved,
or 'detailed' when detailed plans have been
approved.
REGO
Renewable Energy Guarantees of Origin.
Residential Property Developer Tax ('RPDT')
RPDT is a tax, introduced in April 2022, which is charged at a rate of 4% on
certain profits of companies carrying out residential property development.
Science Based Target initiative ('SBTi')
Science-based targets provide companies and financial institutions with a
clearly defined pathway to future-proof growth by specifying how much and how
quickly they need to reduce their greenhouse gas emissions.
Self-Remediation Terms ('SRT')
Is a commitment to remediate buildings over 11 metres in height with
identified life critical fire safety issues, which were constructed in England
and Wales since 5 April 1992.
Site/Phase
A site is a concise area of land on which homes are being constructed. Larger
sites may be divided into a number of phases which are developed at different
times.
Social Housing
Housing that is let at low rents and on a secure basis to people in housing
need. It is generally provided by councils and not-for-profit organisations
such as housing associations.
Strategic Land Holdings
These are plots which are typically held under option or through a promotion
agreement.
The 5% Club
Members of The 5% Club aspire to achieve 5% of their workforce in 'earn and
learn' positions (including apprentices, sponsored students and graduates on
formalised training schemes) within 5 years of joining.
Underlying
Underlying refers to any statutory performance measure or alternative
performance measure which is before net legacy
building safety expense and exceptional items. The Group believes that
underlying metrics are useful for investors as these
measures are closely monitored by the Directors in assessing Bellway's
operating performance, thereby allowing investors
to understand and evaluate performance on the same basis as management.
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
§ the condensed consolidated interim financial statements have been prepared
in accordance with UK adopted IAS 34 'Interim Financial Reporting';
§ the Half Year Report 2025 includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed consolidated interim
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
The directors of Bellway p.l.c. are listed in the Annual Report and Accounts
for the year ended 31 July 2024. Shane Doherty was appointed to the Board as
an executive director on 2 December 2024 and Keith Adey retired from the Board
as an executive director on 21 March 2025.
For and on behalf of the Board
Jason Honeyman
Group Chief Executive
Registered number 1372603
24 March 2025
Note on forward-looking statements
Certain statements in this presentation are forward-looking statements which
are based on Bellway p.l.c.'s expectations, intentions and projections
regarding its future performance, anticipated events or trends and other
matters that are not historical facts. Such forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts. Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "may", "could", "should" or other words of similar meaning. These
statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements including, but not limited to, those risks set out
in the "Principal Risks" section in our most recently published annual report
and accounts. Given these risks and uncertainties, no assurance can be given
that any particular expectation will be met and reliance should not be placed
on any forward-looking statement. Forward-looking statements speak only as of
the date of such
statements and, except as required by applicable law or regulation, Bellway
p.l.c. undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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