REG - Bellway PLC - Trading Update

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RNS Number : 8605U  Bellway PLC  12 August 2025

Bellway p.l.c.

 

Trading Update

 

Tuesday 12 August 2025

 

 

Bellway p.l.c. ('Bellway' or the 'Group') is today issuing a Trading Update
for the year ended 31 July 2025 ahead of its Full Year Results announcement on
Tuesday 14 October 2025.

 

 

Highlights

 

§ Total housing completions increased by 14.3% to 8,749 homes (2024 - 7,654)
at an overall average selling price of around £316,000 (2024 - £307,909),
both slightly ahead of previous guidance.

§ Housing revenue rose by 17% to over £2.76bn (2024 - £2,356.7m) and the
underlying operating margin is expected to approach 11%(3) (2024 - 10.0%).

§ The private reservation rate per outlet per week, including bulk sales, of
0.57 was 11.8% higher than the prior year (2024 - 0.51). The private
reservation rate excluding bulk sales increased by 6.1% to 0.52 (2024 -
0.49).

§ Driven by the higher level of private reservations during the year, the
forward order book at 31 July 2025 increased to 5,307 homes (2024 - 5,144
homes), with a value of £1,519.4m(4) (2024 - £1,412.9m).

§ Reflecting the strength of our land bank and drive for capital efficiency,
we have continued with a disciplined approach to land acquisition and
contracted to purchase 8,120 plots during the year (2024 - 4,621 plots).

§ Bellway has a well-capitalised balance sheet with year-end net cash of
£42m(5), in line with the Board's expectations (2024 - net debt of
£10.5m).

§ The Group has a strong land bank and outlet opening programme, which
together with our healthy order book and work-in-progress position supports
our plans for further growth in volume output to around 9,200 homes in FY26.

§ Bellway remains focused on increasing return on capital employed and
running a more efficient balance sheet to drive higher cash generation and
shareholder returns. A detailed update on our capital allocation framework and
targets will be provided as part of our FY25 results announcement on 14
October 2025.

 

Jason Honeyman, Group Chief Executive, commented:

 

"Bellway has delivered a solid performance despite ongoing headwinds for our
industry. There was good growth in volume output and an improvement in
underlying margin which are set to drive a strong increase in profits for
FY25. We have entered the new financial year with a healthy forward order book
and outlet opening programme and, if market conditions remain stable, we are
well-positioned to deliver further growth in FY26.

We have a high-quality land bank and the operational capacity across the Group
to support our plans to deliver long-term volume growth. During the year we
have made excellent progress with refreshing our approach to capital
efficiency across all our divisions, and I remain confident that we can drive
increased cash generation and shareholder returns in the years ahead."

 

 

Market and trading

 

Customer demand was supported by good availability of mortgage finance and
relative stability in mortgage interest rates during the year and overall,
headline pricing and the level of targeted incentives have remained stable
across our regions. Build cost inflation was in the low single digits
throughout the year and there are presently good levels of building materials
and subcontractor availability across the Group.

 

The private reservation rate increased by 12.1% to an average of 139 per week
(2024 - 124), with trading enhanced by a modest increase in bulk sales.
Reflecting our robust outlet position, the private reservation rate per outlet
per week increased by 11.8% to 0.57 (2024 - 0.51) and included a contribution
of 0.05 from bulk sales (2024 - 0.02). While the private reservation rate
improved in the second half of the financial year to 0.62 compared to 0.51 in
the first half, a solid period of demand through the spring was followed by
softer trading in the final quarter.

 

This private reservation rate per outlet per week, excluding bulk sales, of
0.52 was 6.1% higher than the prior year (2024 - 0.49). The overall
reservation rate, including social homes, rose by 6.2% to 171 per week (2024 -
161) and the cancellation rate remains low at 13% (2024 - 14%).

 

The Group traded from an average of 246 outlets during the year (2024 - 245),
in line with our expectations, with a closing position of 249 outlets at 31
July 2025 (2024 - 250), and we expect to maintain the average number at around
245 in FY26. Driven by the higher level of private reservations during the
year, the forward order book at 31 July 2025 increased to 5,307 homes (2024 -
5,144 homes) with a value of £1,519.4m(4) (2024 - £1,412.9m).

 

 

Results

 

The Group entered FY25 with a strengthened forward order book and combined
with the improvement in trading during the year, this supported a 14.3%
increase in total housing completions to 8,749 homes (2024 - 7,654). The
increase was driven entirely by growth in private output and the proportion of
private completions rose to a more normalised level of 79% of the total (2024
- 75%).

 

The overall average selling price was ahead of the prior year at around
£316,000 (2024 - £307,909), with the increase due to the higher proportion
of private completions together with some geographic and mix changes.

 

Housing revenue rose by 17% to over £2.76bn (2024 - £2,356.7m) and, in line
with previous guidance, the underlying operating margin is expected to
approach 11%(3) (2024 - 10.0%).

 

The strong growth in housing completions and revenue has been delivered whilst
maintaining our sharp focus on providing high-quality homes and service for
our customers, and this has been reflected by Bellway retaining its status as
a five-star(6) homebuilder for the ninth consecutive year. In addition, 47 of
our site managers won NHBC Pride in the Job Awards during the year (2024 -
45), with our winners ranked among the top five per cent of over 8,000
entrants.

 

 

Land investment

 

The strength and depth of the Group's land bank has enabled an ongoing
disciplined approach to land acquisition. The Group contracted to purchase
8,120 plots during the year (2024 - 4,621 plots) across 51 sites (2024 - 27
sites) with a total contract value of £567m (2024 - £345m).

 

Our strategic land bank has also been further strengthened to support our
longer-term growth ambitions, with the Group entering into option agreements
to buy 30 sites (2024 - 35 sites).

 

 

Financial position and dividend

 

The Group has a well-capitalised balance sheet with year-end net cash of
£42m(5), in line with the Board's expectations (2024 - net debt of £10.5m).
We remain focused on preserving balance sheet strength, and our adjusted
gearing(7), inclusive of land creditors, remains low at around 10% (2024 -
6.8%).

 

The Board continues to expect underlying dividend cover for the full financial
year will be around 2.5 times(8), and the strong growth in earnings will drive
a commensurate increase in dividend payments.

 

 

Capital allocation

 

As outlined in our previous announcements this year, Bellway is focused on
increasing return on capital employed and running a more efficient balance
sheet. With a stable market backdrop, we are confident that our strong
work-in-progress position and land bank will enable us to deliver multi-year
growth in volume output and returns.

 

During the year we have refreshed our approach to capital efficiency and
embedded it across the Group, and we have identified opportunities to increase
cash generation and make significant improvements in operating cashflow
conversion in the medium term.

 

The Group is now finalising details of a refined capital allocation framework
which will be anchored to operating cashflow and will support our plans to
optimise the balance between investment in growth and returns to shareholders
via both dividends and share buybacks.

 

We look forward to setting out our detailed capital allocation framework,
including targets for cash generation and returns to shareholders, as part of
our FY25 results announcement on 14 October 2025.

 

 

Outlook

 

Bellway has delivered a solid performance in FY25 and despite the softer
market conditions in recent months, we have entered the new financial year
with a healthy order book. For FY26, we expect to maintain broadly flat
average outlet numbers and based on a private reservation rate per site per
week similar to the 0.57 achieved in FY25, we are well-positioned to deliver
further growth in volume output to around 9,200 homes and increase cash
generation for shareholder returns.

 

In the years ahead, our industry should benefit from the Government's recent
planning reforms, although we continue to experience delays to planning
decisions as local authorities are taking time to adopt new local plans and
the updated National Planning Policy Framework. To complement these
supply-side measures and to meet its ambitious housing targets, the Government
also needs to address the demand-side constraints facing first-time buyers.

 

Notwithstanding the current industry headwinds, the Board is confident that,
given the strength of the Group's land bank and balance sheet, Bellway is in a
strong position to deliver continued volume growth into the longer term. Our
reaffirmed approach to driving greater cash generation and capital efficiency,
alongside growing volume, leaves us well-placed to deliver multi-year growth
in both asset turn and margin to drive a sustained recovery in returns and
ongoing value creation for our shareholders.

 

 

Notes:

 

1    All figures relating to completions, order book, reservations,
cancellations, and average selling price exclude the Group's share of its
joint ventures.

2    Comparatives are for the year ended 31 July 2024 or as at 31 July 2024
('2024') unless otherwise stated.

3    Underlying operating margin is operating profit before net legacy
building safety expense and exceptional items divided by total revenue.

4    Order book is the total expected sales value of current reservations
that have not legally completed.

5    Net cash/(debt) is cash plus cash equivalents, less debt financing.

6    As measured by the Home Builders Federation using the eight week NHBC
Customer Satisfaction survey.

7    Adjusted gearing is the total of net cash/(debt) and land creditors
divided by total equity.

8    Underlying dividend cover is underlying profit for the year per
ordinary share divided by the dividend per ordinary share relating to that
period.

 

 

For further information, please contact:

 

Bellway p.l.c.

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 100 6451

 

 

Certain statements in this announcement 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', 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.  Given these risks and uncertainties, prospective investors are
cautioned not to place undue reliance on forward-looking statements.
Forward-looking statements speak only as of the date of such statements and,
except as required by applicable law, 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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