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REG - Bellway PLC - Full Year Results

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RNS Number : 1664D  Bellway PLC  14 October 2025

Bellway p.l.c. ('Bellway' or the 'Group'), the national housebuilder,
announces today, Tuesday 14 October 2025, its full year Results for the year
ended 31 July 2025.

 

Summary

 

§ Good performance in FY25.

§ Strongly positioned to deliver sustained growth in returns.

§ Refreshed capital allocation framework and initial £150m share buyback.

 

 

                                            Year ended     Year ended     Movement

                                            31 July        31 July

                                            2025           2024
 Housing completions                        8,749          7,654          +14.3%
 Revenue                                    £2,782.8m      £2,380.2m      +16.9%

 Underlying performance measures:
 Gross profit (underlying)                  £456.8m(2,3)   £381.1m(2,3)   +19.9%
 Gross margin (underlying)                  16.4%(2,3)     16.0%(2,3)     +40 bps
 Operating profit (underlying)              £303.5m(2,3)   £238.1m(2,3)   +27.5%
 Operating margin (underlying)              10.9%(2,3)     10.0%(2,3)     +90 bps
 Profit before taxation (underlying)        £289.1m(2,3)   £226.1m(2,3)   +27.9%
 Earnings per share (underlying)            176.7p(2,3)    135.2p(2,3)    +30.7%
 RoCE (underlying)                          8.7%(2,3)      7.1%(2,3,6)    +160 bps
 Pre-tax RoE (underlying)                   8.2%(2,3)      6.5%(2,3)      +170 bps

 Statutory and other performance measures:
 Adjusting items (pre-tax)                  £67.2m         £42.4m         +58.5%
 Profit before taxation                     £221.9m        £183.7m        +20.8%
 Earnings per share                         132.8p         109.8p         +20.9%
 Proposed total dividend per share          70.0p          54.0p          +29.6%
 Net asset value per share                  2,989p(2)      2,913p(2)      +2.6%
 Net cash/(debt)                            £41.8m(2)      (£10.5m)(2)    +498.1%
 Land bank (plots)                          95,704(4)      95,292(4)      +0.4%

 

 

Jason Honeyman, Chief Executive, commented:

 

"Bellway has delivered a good performance in FY25 with double-digit growth in
volume output and profits, and our sharper focus on balance sheet efficiency
is reflected by the £150m share buyback programme announced today.

 

While we face some near-term market challenges, we have a high-quality land
bank, strong balance sheet and the operational capacity to capitalise on the
positive long-term fundamentals of our industry. Combined with our refreshed
and disciplined approach to capital allocation, I am confident that we can
drive increased volume output, cash generation and shareholder returns in FY26
and beyond.

 

Bellway remains very well-positioned to continue delivering much needed
high-quality new homes in the years ahead. However, supportive Government
policy is essential for the industry to drive a meaningful and sustained
increase in housing output. The Government must demonstrate its commitment to
accelerating housebuilding by driving through planning reform and addressing
the affordability constraints facing first-time buyers across the country."

 

Financial highlights

§ Growth in total housing completions of 14.3% to 8,749 homes (2024 - 7,654)
at an average selling price of £316,412 (2024 - £307,909).

§ Underlying operating profit increased by 27.5% to £303.5m (2024 -
£238.1m) and the underlying operating margin was in line with expectations at
10.9%(2,3) (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).

§ 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.

§ Growth in underlying profit before taxation of 27.9% to £289.1m(2,3) (2024
- £226.1m).

§ Significant increase in adjusted operating cashflow to £638.9m(2,3) (2024
- £425.2m).

§ Adjusting items relating to legacy building safety included £37.4m (2024 -
£19.9m) for the net increase in overall cost estimates. The adjusting finance
expense of £14.4m (2024 - £17.1m) was in line with previous guidance, and
the overall net legacy building safety adjusting expense, before taxation, was
£51.8m (2024 - £37.0m).

§ The costs and voluntary payment associated with the Competition and Markets
Authority ('CMA') investigation totalled £15.4m (2024 - £nil) and have been
treated as an adjusting item.

§ Reported profit before taxation was £221.9m (2024 - £183.7m).

§ Driven by an improvement in asset turn and the underlying operating margin,
underlying pre-tax RoE was 170 bps higher at 8.2%(2,3) (2024 - 6.5%) and
underlying RoCE increased by 160 bps to 8.7%(2,3) (2024 - 7.1%(6)).

 

Operational highlights

§ We have maintained a strong land bank which at 31 July comprised a total of
95,704 plots(4) (2024 - 95,292 plots) and included 47,144 owned and controlled
plots (2024 - 48,887 plots), providing good visibility on outlet openings.

§ 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 (2024 - 4,621 plots) during the year.

§ The Group traded from an average of 246 outlets (2024 - 245), in line with
our expectations, with a closing position of 249 outlets at 31 July 2025 (2024
- 250).

§ Further expansion of our strategic land bank, which rose to 47,800 plots
(2024 - 45,500 plots) and underpins our longer-term growth ambitions for a
relatively low initial capital outlay.

§ The Group's new timber frame facility, 'Bellway Home Space', is progressing
to plan. Increased usage of timber frame construction will deliver a range of
operational, financial and environmental benefits, and we are on track to
begin supplying our divisions with frames in early 2026.

§ Our ongoing focus on providing high-quality homes and service for our
customers has resulted in Bellway retaining its position as a five-star(5)
homebuilder for the ninth consecutive year.

 

Recent trading and outlook

§ Since the start of the new financial year there has been a continuation of
weak consumer sentiment which has carried from late spring. Customer demand
has been affected by ongoing affordability constraints and uncertainties about
potential taxation changes in the Government's Budget in November 2025.

§ In the ten weeks since 1 August, the private reservation rate per outlet
per week excluding bulk sales was 0.48 (1 August to 6 October 2024 - 0.49).
The private reservation rate including bulk sales was 0.51 (1 August to 6
October 2024 - 0.60).

§ The forward order book at 5 October 2025 comprised 5,285 homes (6 October
2024 - 5,164 homes) with a value of £1,526.9m(2) (6 October 2024 -
£1,449.0m).

§ Notwithstanding the near-term market challenges, we have a strong land bank
and outlet opening programme, which together with our healthy order book and
work-in-progress position supports our plans for growth in volume output to
around 9,200 homes in FY26 (2025 - 8,749 homes).

§ We expect the FY26 average selling price to be around £320,000 (2025 -
£316,412) and the underlying operating margin to be similar to FY25 at around
11.0%(2,3) (2025 - 10.9%).

 

Driving capital efficiency to deliver enhanced returns

§ The Group has a strong and well-capitalised balance sheet with year-end net
cash of £41.8m(2) (2024 - net debt of £10.5m) and low adjusted gearing,
inclusive of land creditors, of only 8.3%(2) (2024 - 6.8%).

§ During the year we have refined our capital allocation framework, which is
based on our key value creation principles. These are to maintain a strong
balance sheet, drive capital efficiencies to increase cash generation, and
optimise the balance between investment in growth and returns to
shareholders.

§ We are strongly positioned to deliver multi-year growth in volume output
and returns, assuming a stable market backdrop, and by FY28 we are targeting
volume output of around 10,000 homes (2025 - 8,749) and a significant increase
in underlying pre-tax RoE (2025 - 8.2%).

§ As part of our capital efficiency drive, management incentives are to be
aligned with increasing cash generation and returns. A new LTIP, proposed for
shareholder approval at this year's AGM, includes a challenging FY28
underlying pre-tax RoE stretch target of 14%(2,3), which would require
exceptional delivery and more supportive market conditions.

 

§ We will leverage our strong land bank and work-in-progress ('WIP') position
to drive material improvements in adjusted operating cashflow conversion and
support the return of excess capital to shareholders.

§ Today we are initiating a share buyback programme which will return £150m
over the next twelve months, and the Group intends to continue with the return
of excess capital in future years.

§ The proposed total ordinary dividend per share has increased by 29.6% to
70.0p (2024 - 54.0p), which reflects the increase in underlying earnings.

§ Our ordinary dividend policy will be maintained with underlying dividend
cover of 2.5 times(2,3), and our focus on delivering sustained growth in
earnings will support a commensurate increase in future dividend payments.

 

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 other
exceptional items (note 3).

4    Includes the Group's share of land owned and controlled through joint
venture partners comprising 760 plots (2024 - 905 plots).

5    As measured by the Home Builders' Federation using the eight-week NHBC
Customer Satisfaction survey.

6    The definition of capital employed has been updated to deduct net
cash. The comparative figures for capital employed and RoCE have therefore
been restated to reflect this change (note 14).

7    Comparatives are for the year ended 31 July 2024 or as at 31 July 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, 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 Full Year 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, 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

Madeleine Gordon-Foxwell

bellway@sodali.com

0207 100 6451

 

 

Chair's Statement

 

Introduction

 

Bellway has returned to growth in FY25 and, despite ongoing challenges for our
industry, the Group has delivered higher volume output and margins and a
strong 30.7% increase in underlying earnings per share to 176.7p(2,3) (2024 -
135.2p).

 

On behalf of the Board, I would like to thank our colleagues, subcontractors
and supply chain partners, who are key to driving our long-term success, and
have shown continued commitment to providing high-quality homes and service
for our customers.

 

Shareholder returns

 

During the year we have refined our capital allocation framework, which is
based on maintaining a strong balance sheet, driving capital efficiencies to
increase cash generation, and optimising the balance between investment in
growth and returns to shareholders.

 

As part of this process, we have identified opportunities to drive significant
improvements in adjusted operating cashflow conversion to support the return
of excess capital to shareholders. Reflecting this, we have initiated a share
buyback programme which will return £150m over the next twelve months, and
the Group intends to continue with the return of excess capital in future
years.

 

Within Bellway's capital allocation framework, our ordinary dividend policy is
maintained with underlying dividend cover of 2.5 times(2,3), and for FY25 the
Board has recommended a final dividend of 49.0p per share (2024 - 38.0p). This
brings the proposed total dividend to 70.0p per share (2024 - 54.0p); an
increase of 29.6%, which reflects both the increase in underlying earnings and
the Board's confidence in Bellway's future growth prospects.

 

Strategic priorities

 

The Group has a clear focus on maintaining financial and operational strength,
and the successful delivery against our strategic priorities will ensure the
Group continues to generate long-term value for shareholders. Further details
of these priorities are set out below:

 

§ Deliver long-term volume growth;

§ Drive a long-term improvement in underlying pre-tax RoE; and

§ Operate responsibly and sustainably through our 'Better with Bellway'
strategy.

 

Long-term volume growth

 

Bellway has a high-quality land bank, a strong balance sheet and operational
capacity across the Group to support our plans to deliver long-term volume
growth.

 

In the years ahead, our industry should benefit from the Government's planning
reforms, although we continue to experience delays to planning decisions as
local authorities are taking time to adopt new local plans and implement the
updated National Planning Policy Framework. Furthermore, the availability of
mortgage products and affordability remains relatively constrained for
customers requiring higher loan-to-value mortgages. To complement the
supply-side measures and to meet its ambitious housing targets, the Government
also needs to address the demand-side pressures, and particularly those facing
first-time buyers.

 

Notwithstanding the current industry headwinds, we have excellent visibility
on planned outlet openings for the current financial year, and the Board is
confident that with a stable housing market, Bellway is in a strong position
to build on its proven track record of organic volume growth in FY26 and into
the longer term.

 

Long-term improvement in RoE

 

The Group is focused on driving both profitable growth and a long-term
improvement in RoE, given the positive compounding effect on shareholder value
that this can create. We have made good early progress in FY25, with a higher
asset turn and underlying operating margin leading to growth in underlying
pre-tax RoE to 8.2%(2,3) (2024 - 6.5%).

 

To support a sustained increase in RoE, we expect to deliver a growing
proportion of volume output from our strategic land bank, which will underpin
our long-term volume growth aspirations and, in turn, help to improve asset
turn and margin.

 

We are also increasing the use of timber frame construction across the Group,
which will improve build efficiencies and asset turn, as well as reducing
carbon emissions in the supply chain. Our timber frame production facility,
'Bellway Home Space', is on track to begin supplying our divisions with frames
in early 2026 and we are aiming to grow timber frame construction to around
30% of housing output by 2030.

These measures, together with our focus on volume growth and a refreshed
approach to capital efficiency, provide a strong platform from which to drive
a continued recovery in RoE.

 

'Better with Bellway'

 

'Better with Bellway' is our approach to acting responsibly and delivering
sustainable homes. The strategy reflects our commitment to putting people and
the environment first, is central to the underlying operations of the Group
and includes targets in respect of our three flagship areas of Customers and
Communities, Employer of Choice, and Carbon Reduction.

 

Customer satisfaction remains a core focus, and I am very proud that the hard
work and dedication of our teams has been recognised through Bellway being
awarded five-star(5) homebuilder status by the HBF for the ninth consecutive
year.

 

There has also been an excellent response to our most recent employee
engagement survey, and 91% of colleagues (2024 - 87%) said they would
recommend Bellway as 'a great place to work'. During the year, Cecily Davis
was appointed as the Non-Executive Director of Workforce Engagement, and she
chairs our National Employee Listening Group which is instrumental in
surfacing ideas and feedback that help Bellway further improve culture and
ways of working.

 

We have ambitious carbon reduction targets and have seen a reduction across
all scopes since our base year of 2019. Notably, our scope 1 and scope 2
carbon emissions have reduced by 48% since our base year of 2019, meeting our
goal of a 46% reduction by 2030 significantly ahead of target. Supported by
several research projects underway across the business, we are advancing our
award-winning Carbon Reduction strategy, updating our targets, and aiming for
Net Zero by 2045.

 

In addition to the flagship priority areas, the 'Better with Bellway' strategy
includes targets in respect of nature, resource efficiency, charitable
engagement, sustainability throughout the supply chain and building quality
homes safely. More details are set out later in this report and are also
available on our website at www.bellwayplc.co.uk/sustainability.

 

Board changes

 

Shane Doherty joined the Board as Chief Financial Officer in December 2024,
with an impressive track record of delivering financial and operational growth
across a number of industries in a range of financial and commercial
disciplines. Shane is already making a significant contribution to Bellway and
has been instrumental in refreshing our approach to capital efficiency and
embedding it across the Group.

 

We were delighted to welcome Gill Barr to the Board in September 2025 as an
independent Non-Executive Director. Gill has also been appointed as a member
of the Audit, Nomination, and Remuneration Committees and will become Chair of
the Remuneration Committee in April 2026 when Jill Caseberry steps down from
this role before retiring from the Board later in the year.

 

Gill's significant experience and expertise as an executive combined with over
twenty years in non-executive roles, including in the construction sector,
will be invaluable to the Board and we look forward to working with her.

 

The future

 

Bellway has an experienced leadership team with operational strength-in-depth
across the organisation, and I believe that we are very well-positioned for
the future. Combined with our strong land bank and balance sheet, and
disciplined approach to capital allocation, we have an excellent platform from
which to navigate near-term market challenges and deliver sustainable growth
and an improvement in returns in the years ahead.

 

We remain committed to building lasting communities, delivering against our
strategic priorities and enhancing shareholder value, and I am confident that
Bellway will continue creating a positive outcome for our stakeholders over
the long term.

 

 

John Tutte

Chair

13 October 2025

 

 

 

 

Chief Executive's Market and Operational Review

 

Market

Customer demand was supported by generally good availability of mortgage
finance and relative stability in mortgage interest rates during the year.
Overall, headline pricing and the level of targeted incentives was stable
across our regions, although there has been more limited use of incentives in
areas with healthy affordability and good levels of employment.

 

The private reservation rate increased 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.

 

The 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 remained low at 13% (2024 - 14%).

 

High-quality land bank

 

The strength and depth of the Group's land bank support our growth plans and
largely replacement only land strategy. We have continued with our disciplined
approach to land acquisition, and the table below shows the Group's land
holdings:

 

                                                               2025     2024
                                                               Plots    Plots
 DPP:  plots with implementable detailed planning permission   30,544   30,787
 Pipeline:  plots pending an implementable DPP                 16,600   18,100

 Bellway owned and controlled plots                            47,144   48,887
 Bellway share of land owned and controlled by joint ventures  760      905

 Total owned and controlled plots                              47,904   49,792
 Strategic land holdings                                       47,800   45,500

 Total land bank(4)                                            95,704   95,292

 

The Group's owned and controlled land bank comprises 47,144 plots (2024 -
48,887 plots), including 30,544 plots (2024 - 30,787 plots) with an
implementable detailed planning permission ('DPP') and 16,600 pipeline plots
(2024 - 18,100 plots). This represents a healthy land bank length of 5.4 years
(2024 - 6.4 years) based on the last 12 months' legal completions.

 

During the year land approval activity normalised, and the Group contracted to
purchase 8,120 plots (2024 - 4,621 plots) across 51 sites (2024 - 27 sites)
with a total contract value of £566.8m (2024 - £344.8m). We also have a good
future pipeline of potential acquisitions, with Heads of Terms agreed on
around 4,400 plots at 5 October 2025 and, reflecting our largely replacement
only land strategy, we expect overall plots contracted in FY26 to be similar
to volume output.

 

The Group traded from an average of 246 outlets (2024 - 245), having opened 56
new sales outlets and with a closing position of 249 outlets as at 31 July
2025. We have good visibility on outlet openings and remain on track to open a
similar number of new outlets to FY25 in the year ahead. In line with previous
guidance, we expect to operate from an average of around 245 outlets in FY26.

 

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. We entered into option agreements to buy 30
sites in FY25 (2024 - 35 sites), building upon our increased activity in the
strategic land market in recent years. Bellway's strategic land portfolio has
increased by over 75% in the last five years and now comprises 47,800 plots
(2024 - 45,500 plots). We expect to deliver a growing proportion of volume
output from our strategically sourced land bank, with a target of 15-20% over
the medium term.

 

Production and cost control

 

Overall build cost inflation was running in the low single digits through the
year and 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 recovery.
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 increased to 80% of housing output (excluding
apartments) in FY25 (2024 - 70%).

 

As part of our long-term growth strategy, we are increasing the use of
sustainably sourced timber frame construction and as previously announced, the
Group is targeting an increase in timber frame use to around 30% of housing
output by 2030 (2025 - 14.0%). The planned growth in timber frame output will
deliver a range of operational, financial and environmental benefits and will
be achieved primarily by investing in our own proprietary timber frame
manufacturing facility, 'Bellway Home Space'.

 

During the year we entered into a long-term lease for a 134,000 square foot
industrial unit for 'Bellway Home Space' near Mansfield, Nottinghamshire. The
facility is progressing to plan, with fit out substantially complete,
installation of computer driven robotic machinery underway and being
commissioned, and we are on track to begin supplying our divisions with frames
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 RoE, and help meet the targets set out in our
'Better with Bellway' sustainability strategy.

 

Recent trading

 

Since the start of the new financial year there has been a continuation of
weak consumer sentiment which has carried from late spring. Customer demand
has been affected by ongoing affordability constraints and uncertainties about
potential taxation changes in the Government's Budget in November 2025.

 

In the ten weeks since 1 August, the private reservation rate per outlet per
week excluding bulk sales was 0.48 (1 August to 6 October 2024 - 0.49). The
private reservation rate including bulk sales was 0.51 (1 August to 6 October
2024 - 0.60).

 

Reflecting recent trading and volume output, the order book at 5 October 2025
comprised 5,285 homes (6 October 2024 - 5,164 homes) with a value of
£1,526.9m(2) (6 October 2024 - £1,449.0m).

 

Outlook

 

Bellway has a healthy forward order book and work-in-progress position and
despite the softer market conditions in recent months, we remain on track for
further growth in FY26. If market conditions remain stable, based on a private
reservation rate per site per week similar to the 0.57 achieved in FY25, we
are well-positioned to deliver volume output of around 9,200 homes (2025 -
8,749 homes). By FY28 we are targeting an increase in volume output to around
10,000 homes, and this growth together with our sharp focus on capital
efficiency will drive an increase in cash generation for shareholder returns.

 

For the industry to drive a meaningful and sustained increase in housing
output, supportive Government policy is also essential. The Government must
demonstrate its commitment to accelerating housebuilding by driving through
planning reform and addressing the affordability constraints facing first-time
buyers across the country.

 

Notwithstanding the current industry headwinds, Bellway's operational
strengths and land bank depth provide a strong platform to capitalise on the
positive long-term fundamentals of the UK housebuilding industry. Given the
significant capacity in our divisional structure, we remain very
well-positioned to deliver sustained volume growth in the years ahead.

 

 

Jason Honeyman

Chief Executive

13 October 2025

 

 

 

Chief Financial Officer's Review

 

Trading performance

The Group has delivered growth in housing revenue of 17.5% to £2,768.3m (2024
- £2,356.7m), which was driven by a strengthened order book at the start of
the financial year and the higher level of private reservations. Other revenue
was £14.5m (2024 - £23.5m) and comprises ancillary items including land and
commercial sales, and management fee income earned on our joint venture
schemes.  Total revenue was 16.9% higher at £2,782.8m (2024 - £2,380.2m).

 

The table below shows the number and average selling price of homes completed
in the year, analysed between private and social homes, and against the prior
year comparative:

 

          2025                2024                Variance (%)
          Homes  ASP (£000)   Homes  ASP (£000)   Homes    ASP
 Private  6,924  350.4        5,758  347.7        20.3%    0.8%
 Social   1,825  187.3        1,896  186.9        (3.7%)   0.2%
 Total    8,749  316.4        7,654  307.9        14.3%    2.8%

 

Total housing completions increased by 14.3% to 8,749 homes (2024 - 7,654
homes) and overall private output rose by 20.3% to 6,924 homes (2024 - 5,758
homes). There was a modest 3.7% decline in social housing output to 1,825
homes (2024 - 1,896 homes) which resulted in the proportion of social
completions decreasing to a more normalised level of 20.9% of the total (2024
- 24.8%). We have good visibility on our near-term build programmes, and we
expect social housing completions to be a similar proportion of the total in
FY26.

 

The overall average selling price was in line with our expectations at
£316,412 (2024 - £307,909). While there were some geographic and mix
changes, underlying pricing and the level of incentives remained broadly
stable through the year, and we currently expect the average selling price in
FY26 to be around £320,000.

 

Underlying operating performance

 

The Group's strong commercial disciplines and proactive management of
site-based overheads helped to alleviate some of the margin pressures faced
during the year. Notwithstanding this, margins face ongoing pressures from the
effects of residual cost inflation and extended site durations, and the
absence of underlying house price inflation. As a result, the underlying gross
margin increased only slightly to 16.4%(2,3) (2024 - 16.0%). Driven by this
and the higher revenues in the year, underlying gross profit increased by
19.9% to £456.8m(2,3) (2024 - £381.1m).

 

Other operating income and expenses, which net to a modest expense of £1.3m
(2024 - £1.2m), relate to the running of our part-exchange programme.
Part-exchange activity remained disciplined and was used for only 3.8% (2024 -
2.8%) of completions with a balance sheet investment at 31 July 2025 of
£25.3m (2024 - £14.5m). 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 underlying administrative expense rose by 7.2% to £152.0m(2,3) (2024 -
£141.8m). 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
'Bellway Home Space' timber frame facility.

 

The underlying operating margin increased to 10.9%(2,3) (2024 - 10.0%) and we
currently expect it to be at a similar level at around 11.0%(2,3) in FY26.

 

The Group will continue with a disciplined approach to land investment and
cost management, and with the support of stable conditions in the housing
market, the Board is confident that an underlying operating margin in the
mid-teens(2,3) is sustainable over the longer term.

 

Adjusting item: Net legacy building safety expense

 

The Group has allocated and committed significant resource and funding to
remediate its legacy apartments, and we continue to make good progress on
addressing building safety issues.

 

During the year, following a period of industry-wide delays in obtaining
building access licences, developers and the Government committed to working
together through a 'Joint Plan' to accelerate developer-led remediation.

 

In relation to legacy building safety, the net adjusting expense includes
£37.4m through cost of sales (2024 - £19.9m), which relates to the movement
in overall cost estimates for both the SRT and associated review and
structural defects

provisions. It also includes an adjusting finance expense for the year of
£14.4m (2024 - £17.1m), which was in line with previous guidance. In total
for FY25, a net pre-tax expense of £51.8m (2024 - £37.0m) has been
recognised in relation to legacy building safety.

 

The following table shows the primary components of the net adjusting expense
relating to legacy building safety, split by half year:

 

                                                       H1 25  H2 25   FY25    FY24
                                                       £m     £m      £m      £m
 SRT and associated review - cost of sales expense     3.2    47.7    50.9    6.1
 SRT and associated review - cost of sales recoveries  (0.2)  -       (0.2)   (0.3)
 Structural defects - cost of sales (credit)/expense   (0.9)  (12.4)  (13.3)  14.1

 Net cost of sales expense                             2.1    35.3    37.4    19.9
 SRT and associated review - finance expense           6.4    6.2     12.6    15.9
 Structural defects - finance expense                  0.9    0.9     1.8     1.2

 Total net legacy building safety expense              9.4    42.4    51.8    37.0

 

In relation to the SRT and associated review and as required by the Joint
Plan, Bellway has now made determinations of which developments require works
for all its legacy buildings in England and Wales. Following this accelerated
and extensive survey programme, a higher proportion of legacy buildings were
found to require works, both externally and internally, than was previously
assumed, which has led to an increase in the SRT and associated review
provision. This amounts to a net adjusting expense of £50.7m through cost of
sales, which comprises £50.9m in relation to the increase in overall cost
estimates, and a modest £0.2m of recoveries.

 

With regards to structural defects, a remediation strategy has now been
finalised for an issue relating to a reinforced concrete frame identified at a
high-rise apartment scheme in Greenwich, London in FY23. This strategy is less
invasive than the remediation design applied in the previous year and has led
to a reduction in the cost estimate for the Greenwich scheme of £19.3m.

 

During the year a mid-rise building was identified with a similar issue to the
Greenwich building and has led to an expense recognised in cost of sales of
£6.0m. This building was not included in the previous review undertaken by
the Group as it was less than 18 metres in height and at the time of that
review the Government required buildings to be classified into two groups by
reference to height. The Group has carried out a further review in the year of
all buildings over 11 metres in height constructed by, or on behalf of
Bellway, where the same third parties responsible for the design of the frame
at these two developments have been involved. To date, no other similar design
issues with reinforced concrete frames have been identified. Overall in FY25 a
net credit through cost of sales of £13.3m has been recognised in relation to
historical structural defects.

 

The adjusting finance expense was £14.4m (2024 - £17.1m) 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 July 2025 forward looking
discount rate, we currently anticipate an adjusting finance expense of around
£15m in FY26.

 

The total amount Bellway has set aside for legacy buildings in England,
Scotland and Wales since 2017 is £707.5m. Demonstrating our ongoing
commitment to deliver appropriate solutions for legacy buildings, the Group
has spent £191.1m since the start of the remediation programme, with a
remaining provision of £516.4m at 31 July 2025.

 

During FY25, we have delivered against our requirements of the Joint Plan,
with a particular focus on accelerating building surveys and procuring works.
As at 31 July 2025, and including those buildings that have been awarded an
application by the Building Safety Fund or ACM Funds, Bellway had a total of
168 buildings where work is complete or underway.

 

Looking ahead, our experienced site remediation teams remain focused on
completing works as promptly and efficiently as possible. The Group 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.

 

Adjusting item: Competition and Markets Authority investigation

 

On 9 July 2025, the Competition and Markets Authority ('CMA') announced its
intention to close its investigation into Bellway and six other UK
housebuilders, accepting voluntary commitments from all parties.

 

Under the terms of the offered commitments, Bellway will contribute £13.5m to
a total payment of £100m to be paid by the seven UK housebuilders in
aggregate to Government programmes that fund and support the construction of
affordable housing across the UK.

 

Bellway's offer of commitments does not constitute an admission of any
wrongdoing, and the CMA has made no determination as to the existence of any
infringement of competition law. We will continue to work constructively with
the CMA as the process concludes.

 

Bellway's voluntary contribution together with associated legal expenses,
totalled £15.4m, and these have been recognised as an adjusting item through
administrative expenses.

 

Net underlying finance expense

 

The rise in the net underlying finance expense to £12.9m(2,3) (2024 - £9.7m)
was primarily due to the higher interest rates charged on the increased land
creditor balance in the year. This resulted in a higher non-cash interest
charge on land acquired on deferred terms of £14.9m (2024 - £11.1m). The
total underlying non-cash related net finance expense in the year was
£15.7m(2,3) (2024 - £11.5m), and cash related net finance income was £2.8m
(2024 - £1.8m).

 

Based on prevailing interest rates the net underlying interest expense in FY26
is anticipated to be around £15m(2,3).

 

Profit for the year

 

Including our share of loss from joint ventures of £1.5m (2024 - £2.3m),
which reflects upfront financing costs on a long-term scheme, underlying
profit before taxation increased by 27.9% to £289.1m(2,3) (2024 - £226.1m).
Reported profit before taxation was £221.9m (2024 - £183.7m).

 

The income tax expense was £64.4m (2024 - £53.2m), reflecting an effective
tax rate of 29.0% (2024 - 29.0%). 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 year rose by 30.6% to £209.7m(2,3) (2024 -
£160.6m) and underlying earnings per share was 176.7p(2,3) (2024 - 135.2p).
After considering the adjusting items, reported profit was £157.5m (2024 -
£130.5m) and basic earnings per share was 132.8p (2024 - 109.8p).

 

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 £4,838.1m
(2024 - £4,714.8m), the carrying value of land was £2,502.9m (2024 -
£2,431.4m). The work-in-progress balance rose modestly to £2,165.0m (2024 -
£2,123.9m).

 

We have maintained a strong balance sheet with net cash at 31 July 2025 of
£41.8m(2) (2024 - net debt of £10.5m), and average net debt was £49.2m(2)
(2024 - £45.8m). During the year, expenditure on land, including payment of
land creditors, was £472m (2024 - £465m), primarily comprising cash payments
on contracts approved in previous financial years.

 

Committed land obligations increased to £337.6m (2024 - £225.3m), with the
movement reflecting a normalisation of land buying activity. The increase in
committed land obligations and focus on better discipline around WIP
investment has had a positive impact on cash from operations which increased
to £222.0m (2024 - cash utilised in operations of £20.2m).  Adjusted
gearing, inclusive of land creditors, remains low at 8.3%(2) (2024 - 6.8%).

 

Capital allocation framework

 

During the year we have refreshed our approach to capital efficiency and
embedded it across the Group. Our refined capital allocation framework is
based on maintaining balance sheet strength and low gearing, driving capital
efficiencies to increase cash generation, and optimising the balance between
investment in growth and returns to shareholders.

 

At the core of our framework, we will run the business through the cycle with
a strong and efficient balance sheet. As part of this, and as land investment
has started to normalise, we expect a modest increase in the use of land
creditors in the medium term to between 15% and 20% of land value (2025 -
13.5%).

 

The strength of our balance sheet will enable the Group to continue investing
in attractive land opportunities to deliver long-term volume growth. Given the
ongoing sluggish planning environment, we currently expect broadly flat
average outlet numbers of around 245 in FY26, with potential for modest growth
in FY27 and FY28. Notwithstanding these near-term planning constraints, with a
stable market backdrop, we are well-positioned to increase volumes, and we are
targeting volume output of around 10,000 homes by FY28, which equates to
annual growth of between 4% and 5%.

 

Over this period, we expect to maintain our overall land bank at around
current levels, with an increased contribution from our higher margin
strategic land holdings. The targeted volume growth, coupled with the largely
replacement only land strategy and focus on monetising our well-invested WIP
position, will support healthy improvements in asset turn and WIP turn over
the next three years.

 

In FY25 we delivered a significant increase in adjusted operating cashflow to
£638.9m(2,3) (2024 - £425.2m). Looking ahead, we will leverage our strong
land bank and WIP position to drive material improvements in adjusted
operating cashflow conversion and support the return of excess capital to
shareholders.

 

Today, we are initiating a share buyback programme which will return £150m
over the next twelve months, and the Group intends to continue with the return
of excess capital in future years.

 

Bellway also has a sustainable ordinary dividend policy. The proposed total
ordinary dividend per share has risen by 29.6% to 70.0p for FY25 (2024 -
54.0p), which reflects the increase in underlying earnings.

 

Our ordinary dividend policy will be maintained with underlying dividend cover
of 2.5 times(2,3), and our focus on delivering sustained growth in earnings
will support a commensurate increase in future dividend payments.

 

Bellway remains focused on driving growth and an improvement in returns, and
we are targeting a significant increase in underlying RoE in the years ahead.
As part of our capital efficiency drive, management incentives are to be
aligned with increasing cash generation and returns. A new long-term incentive
plan, proposed for shareholder approval at this year's AGM, includes a
challenging FY28 underlying pre-tax RoE stretch target of 14%(2,3), which
would require exceptional delivery and more supportive market conditions.

 

Overall, our framework reflects our disciplined approach to capital
allocation, and I am confident of delivering increased cash generation to meet
the investment needs of the business, regular dividend payments and additional
returns to shareholders.

 

Delivering value for shareholders

 

Net assets increased in the year to £3,556.2m (2024 - £3,465.4m), with the
improvement in underlying profitability partly offset by cash dividend
payments and adjusting items. As a result, NAV per share increased to
2,989p(2) (2024 - 2,913p).

 

Driven by an improvement in both asset turn and the underlying operating
margin, our underlying pre-tax RoE was 170 bps higher at 8.2%(2,3) (2024 -
6.5%) and underlying RoCE increased by 160 bps to 8.7%(2,3) (2024 - 7.1%(6)).

 

The Board remains confident that, with supportive market conditions, Bellway
is in an excellent position to capitalise on future growth opportunities.
Together 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 and ongoing value creation for our
shareholders.

 

 

Shane Doherty

Chief Financial Officer

13 October 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 reflects our commitment to putting people and
the environment first, 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 Customers and
Communities, Employer of Choice, and Carbon Reduction are included below.

 

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 for
the ninth consecutive year. This was awarded with an improved score of 95.4%
(2024 - 91.6%) in the HBF's most recent 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 been reflected by 47
of our site managers winning NHBC Pride in the Job Awards during the year
(2024 - 45). This is the NHBC's flagship competition for build quality across
the UK and, from a field of over 8,000 site managers entering, only around 5%
receive these awards.

 

We are also proud to report further improvement in our NHBC Construction
Quality Review score, a measure of underlying construction quality. Our score
has risen to 92.9% at 31 July 2025 (2024 - 89.9%), a record high for the
Group.

 

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.

 

There has also been an excellent response to our most recent employee
engagement survey and despite the ongoing challenges in the market during the
year, 91% of colleagues (2024 - 87%) said they would recommend Bellway as 'a
great place to work'.

 

Bellway is a fully accredited Living Wage Employer, which covers both directly
employed and subcontracted labour, 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.

 

Carbon Reduction

 

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').

 

As a result of our initiatives, the Group's scope 1 and scope 2 carbon
emissions have reduced by 48% since our base year of 2019, and we have met our
goal of a 46% reduction significantly ahead of the 2030 target.

 

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.

 

Looking ahead, to continue lowering our carbon footprint at Bellway, we are
advancing our carbon reduction strategy, updating our targets, and aiming for
Net Zero by 2045.

 

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 Interim
Results in March 2026.

 

All our targets and KPIs, together with further background information, are
published on our website at www.bellwayplc.co.uk/sustainability.

 

Jason Honeyman

Chief Executive

13 October 2025

 

Group Income Statement

for the year ended 31 July 2025

 

                                                      Note  2025       2024
                                                            £m         £m

 Revenue                                              2     2,782.8    2,380.2

 Cost of sales                                              (2,363.4)  (2,019.0)

 Analysed as:
 Underlying cost of sales                                   (2,326.0)  (1,999.1)
 Adjusting item: net legacy building safety expense   3     (37.4)     (19.9)

 Gross profit                                               419.4      361.2

 Other operating income                                     69.3       50.6

 Other operating expenses                                   (70.6)     (51.8)

 Administrative expenses                                    (167.4)    (147.2)

 Analysed as:
 Underlying administrative expenses                         (152.0)    (141.8)
 Adjusting item: other exceptional items              3     (15.4)     (5.4)

 Operating profit                                           250.7      212.8

 Finance income                                       9     9.6        9.5

 Finance expenses                                     9     (36.9)     (36.3)

 Analysed as:
 Underlying finance expenses                                (22.5)     (19.2)
 Adjusting item: net legacy building safety expense   3, 9  (14.4)     (17.1)

 Share of result of joint ventures                          (1.5)      (2.3)

 Profit before taxation                                     221.9      183.7

 Income tax expense                                   5     (64.4)     (53.2)

 Profit for the year *                                      157.5      130.5

 Earnings per ordinary share - Basic                  4     132.8p     109.8p
 Earnings per ordinary share - Diluted                4     131.8p     109.0p

 * All attributable to equity holders of the parent.

 

 

 Adjusting items
                                                        Note  2025    2024
                                                              £m      £m
 Gross profit
 Gross profit per the Group Income Statement                  419.4   361.2
 Adjusting item: net legacy building safety expense     3     37.4    19.9

 Underlying gross profit                                      456.8   381.1

 Operating profit
 Operating profit per the Group Income Statement              250.7   212.8
 Adjusting item: net legacy building safety expense     3     37.4    19.9
 Adjusting item: other exceptional items                3     15.4    5.4

 Underlying operating profit                                  303.5   238.1

 Profit before taxation
 Profit before taxation per the Group Income Statement        221.9   183.7
 Adjusting item: net legacy building safety expense     3     51.8    37.0
 Adjusting item: other exceptional items                3     15.4    5.4

 Underlying profit before taxation                            289.1   226.1

 Profit for the year
 Profit for the year per the Group Income Statement           157.5   130.5
 Adjusting item: net legacy building safety expense     3     51.8    37.0
 Adjusting item: other exceptional items                3     15.4    5.4
 Adjusting item: income tax on exceptional items        3     (15.0)  (12.3)

 Underlying profit for the year                               209.7   160.6

Group Statement of Comprehensive Income

for the year ended 31 July 2025

 

                                                               Note  2025    2024
                                                                     £m      £m

 Profit for the year                                                 157.5   130.5

 Other comprehensive expense
 Items that will not be recycled to the income statement:
 Remeasurement losses on defined benefit pension plans               -       (1.6)
 Income tax on other comprehensive expense                     5     -       0.5

 Other comprehensive expense for the year, net of income tax         -       (1.1)

 Total comprehensive income for the year *                           157.5   129.4

 * All attributable to equity holders of the parent.

Group Statement of Changes in Equity

at 31 July 2025

 

                                                              Note  Issued capital  Share premium  Capital redemption  Other reserves  Retained earnings  Total

                                                                                                   reserve                                                equity
                                                                    £m              £m             £m                  £m              £m                 £m

 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                                   12    -               -              -                   -               (131.7)            (131.7)
 Shares issued                                                      -               1.2            -                   -               -                  1.2
 Credit in relation to share options and tax thereon

                                                              5     -               -              -                   -               5.3                5.3
 Share buyback programme and cancellation of shares

                                                              11    (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

 Total comprehensive income for the year
 Profit for the year                                                -               -              -                   -               157.5              157.5
 Other comprehensive expense *                                      -               -              -                   -               -                  -

 Total comprehensive income for the year                            -               -              -                   -               157.5              157.5

 Transactions with shareholders recorded directly in equity:
 Dividends on equity shares                                   12    -               -              -                   -               (70.0)             (70.0)
 Purchase of own shares                                             -               -              -                   -               (1.0)              (1.0)
 Shares issued                                                      -               0.3            -                   -               -                  0.3
 Credit in relation to share options and tax thereon

                                                              5     -               -              -                   -               4.0                4.0
 Total contributions by and distributions to shareholders

                                                                    -               0.3            -                   -               (67.0)             (66.7)

 Balance at 31 July 2025                                            14.8            183.5          20.6                1.5             3,335.8            3,556.2

 

  * An additional breakdown is provided in the Group Statement of
Comprehensive Income.

 

Group Balance Sheet

at 31 July 2025

 

                                        Note  2025     2024
                                              £m       £m
 ASSETS
 Non-current assets
 Property, plant and equipment                45.5     30.2
 Financial assets                             54.0     47.7
 Equity accounted joint arrangements          0.1      9.8
 Deferred tax assets                    5     2.7      -
 Retirement benefit assets                    0.9      0.9

                                              103.2    88.6

 Current assets
 Inventories                            6     4,838.1  4,714.8
 Trade and other receivables                  81.0     76.8
 Corporation tax receivable                   0.4      -
 Cash and cash equivalents              8     171.8    119.5

                                              5,091.3  4,911.1

 Total assets                                 5,194.5  4,999.7

 LIABILITIES
 Non-current liabilities
 Interest-bearing loans and borrowings  8     130.0    130.0
 Trade and other payables                     90.5     93.6
 Deferred tax liabilities               5     -        0.7
 Provisions                             7     350.5    376.5
                                              571.0    600.8

 Current liabilities
 Corporation tax payable                      -        7.9
 Trade and other payables                     901.4    792.9
 Provisions                             7     165.9    132.7

                                              1,067.3  933.5

 Total liabilities                            1,638.3  1,534.3

 Net assets                                   3,556.2  3,465.4

 EQUITY
 Issued capital                               14.8     14.8
 Share premium                          11    183.5    183.2
 Capital redemption reserve             11    20.6     20.6
 Other reserves                               1.5      1.5
 Retained earnings                      11    3,335.8  3,245.3

 Total equity                                 3,556.2  3,465.4

 

Group Cash Flow Statement

for the year ended 31 July 2025

 

                                                                        Note  2025     2024
                                                                              £m       £m

 Cash flows from operating activities
 Profit for the year                                                          157.5    130.5

 Depreciation charge                                                          5.5      5.1
 Finance income                                                         9     (9.6)    (9.5)
 Finance expenses                                                       9     36.9     36.3
 Share-based payment expense                                                  4.6      4.5
 Share of post tax result of joint ventures                                   1.5      2.3
 Income tax expense                                                     5     64.4     53.2
 Increase in inventories                                                6     (101.9)  (139.2)
 (Increase)/decrease in trade and other receivables                           (4.4)    11.5
 Increase/(decrease) in trade and other payables                              74.7     (98.8)
 Decrease in provisions                                                 7     (7.2)    (16.1)

 Cash from/(utilised in) operations                                           222.0    (20.2)

 Interest paid                                                                (6.7)    (6.8)
 Income tax paid                                                              (76.1)   (38.5)

 Net cash inflow/(outflow) from operating activities                          139.2    (65.5)

 Cash flows from investing activities
 Acquisition of subsidiary, net of cash acquired                              (4.6)    -
 Acquisition of property, plant and equipment                                 (11.9)   (1.4)
 Increase in loans to joint ventures                                          (6.5)    (13.9)
 Repayment of loans by joint ventures                                         3.3      -
 Dividends from joint ventures                                                3.1      2.0
 Interest received                                                            3.7      5.3

 Net cash outflow from investing activities                                   (12.9)   (8.0)

 Cash flows from financing activities
 Payment of lease liabilities                                                 (3.3)    (3.6)
 Proceeds from the issue of share capital on exercise of share options        0.3      1.2
 Purchase of own shares                                                       (1.0)    -
 Share buyback programme                                                      -        (34.9)
 Dividends paid                                                         12    (70.0)   (131.7)

 Net cash outflow from financing activities                                   (74.0)   (169.0)

 Net increase/(decrease) in cash and cash equivalents                         52.3     (242.5)

 Cash and cash equivalents at beginning of year                               119.5    362.0

 Cash and cash equivalents at end of year                               8     171.8    119.5

 

 

 

Notes

 

1.   Basis of preparation and accounting policies

 

a)   Basis of consolidation

 

Bellway p.l.c. (the 'Company') is a company incorporated in England and Wales.

 

The financial information set out above does not constitute the Group's
statutory financial statements for the years ended 31 July 2025 or 2024, but
is derived from those financial statements. Statutory financial statements for
2024 have been delivered to the registrar of companies, and those for 2025
will be delivered in due course. The auditor, Ernst & Young LLP, has
reported on those financial statements; their reports were (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.

 

Whilst the financial information included in this announcement has been
prepared in accordance with Adopted IFRSs,

this announcement does not itself contain sufficient information to comply
with Adopted IFRSs. The Group expects to

send its 2025 Annual Report and Accounts to shareholders on 27 October 2025.

 

b)   Other financial statement considerations

 

In preparing the Group financial statements, management has considered the
impact of climate change, and the possible impact of climate-related and other
emerging business risks.  A rigorous assessment of the impact of
climate-related risks has been performed, and disclosed in the Strategic
Report, in accordance with the recommendations of the Task Force on
Climate-related Financial Disclosures. This included an assessment of
inventories and how they could be affected by measures taken to address global
warming.  No issues were identified that would materially impact the carrying
values of either the Group's assets or liabilities, or have any other material
impact on the financial statements.

 

The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses.  The
estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about the carrying values of assets and liabilities that are not readily
apparent from other sources.  Actual results may differ from these estimates.

 

The accounting policies set out within the notes to the financial statements
have been applied consistently to all periods presented in these consolidated
financial statements.

 

 

c)   Going concern

 

The Group's activities are financed principally by a combination of ordinary
shares and cash in hand less debt.  At 31 July 2025, Bellway had net cash of
£41.8m(2) (note 8), having generated cash of £52.3m (note 8) during the
year, including £222.0m of cash generated from operations.

 

The Group has operated within all its debt covenants throughout the year, and
covenant compliance was considered as part of the going concern assessment.
In addition, the Group had bank facilities of £400.0m at 31 July 2025,
expiring in tranches up to December 2029.  Furthermore, in February 2021 the
Group entered into a contractual arrangement to issue a sterling US Private
Placement ('USPP') for a total amount of £130.0m, 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 £530.0m at 31
July 2025.

 

Including committed debt lines and cash, Bellway had access to total funds of
£571.8m, along with net current assets (excluding cash) of £3,852.2m at 31
July 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 private average
selling price, with overheads, land spend and construction spend reducing
accordingly.

 

 

 

Notes (continued)

 

1.   Basis of preparation and accounting policies (continued)

 

This sensitivity includes the following principal assumptions:

 

§ Private completions in H1 FY26 are supported by the forward order book.
In the 12 months to 31 January 2027, private completions reduce by around 50%
compared to the 12 month pre-stress peak achieved in FY22.  This is followed
by a gradual recovery based on the lower base position.

 

§ Private average selling price in H1 FY26 remains in line with internal
forecasts due to the forward order book position.  In the 12 months to 31
January 2027, 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 within the Directors' control 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 reducing in line with housing revenue.

 

§ Dividends reducing in line with earnings.

 

The sensitivity analysis was modelled over the period to 31 July 2027 for the
going concern assessment, but extended to 31 July 2029 for the Directors'
long-term viability assessment.  In addition to the above, 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 and Company will have sufficient funds
to continue to meet its liabilities as they fall due for the period to 31 July
2027, aligning with the first year end after the minimum 12 month assessment
period, and have therefore prepared the financial statements on a going
concern basis.

 

d)   Accounting policies

 

Effect of new standards and amendments effective for the first time

 

The Group adopted and applied the following amendments in the year, none of
which had a material effect on the financial statements:

 

§ Classification of Liabilities as Current or Non-current and Non-current
liabilities with covenants - Amendments to IAS 1 'Presentation of Financial
Statements';

 

§ Lease Liability in Sale and Leaseback - amendments to IFRS 16 'Leases'; and

 

§ Supplier Finance Arrangements - amendments to IAS 7 'Statement of Cash
Flows' and IFRS 7 'Financial Instruments Disclosure'.

 

Notes (continued)

 

1.   Basis of preparation and accounting policies (continued)

 

Standards and amendments in issue but not yet effective

 

At the date of authorisation of these financial statements there were a number
of standards and amendments which were in issue but not yet effective. These
have not been applied in these financial statements and are not expected to
have a material effect when adopted.

 

e)   Accounting estimates and judgements

 

While preparing these 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 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 2024 Annual Report and Accounts.

 

2.   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 assesses
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 Chief Financial Officer's
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
                      2025            2024            2025            2024
                      Number          Number          £m              £m

 Housing - private    6,924           5,758           2,426.4         2,002.3
 Housing - social     1,825           1,896           341.9           354.4

 Total housing        8,749           7,654           2,768.3         2,356.7

 Non-housing revenue  -               -               14.5            23.5

 Total                8,749           7,654           2,782.8         2,380.2

 

 

Notes (continued)

 

3.   Net legacy building safety expense and other exceptional items

 

Profit before taxation for the years ended 31 July 2025 and 31 July 2024 has
been arrived at after recognising the following items in the income statement:

 

                                                                                                                      2025
                                                                       SRT and associated review  Structural defects  Total net legacy building safety expense  Other exceptional items  Total

                                                                                                                                                                                         adjusting items
                                                                       £m                         £m                  £m                                        £m                       £m

 Provisions (note 7)                                                   50.9                       (13.3)              37.6                                      -                        37.6
 Reimbursement assets (note 7)                                         (0.2)                      -                   (0.2)                                     -                        (0.2)
 Net cost of sales                                                     50.7                       (13.3)              37.4                                      -                        37.4
 Administrative expenses                                               -                          -                   -                                         15.4                     15.4
 Finance expenses (notes 7, 9)                                         12.6                       1.8                 14.4                                      -                        14.4
 Total net legacy building safety expense and other exceptional items

                                                                       63.3                       (11.5)              51.8                                      15.4                     67.2

 

                                                                                                                      2024
                                                                       SRT and associated review  Structural defects  Total net legacy building safety expense  Other exceptional items  Total

                                                                                                                                                                                         adjusting items
                                                                       £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 9)                                             15.9                       1.2                 17.1                                      -                        17.1
 Total net legacy building safety expense and other exceptional items

                                                                       21.7                       15.3                37.0                                      5.4                      42.4

 

The income tax rate applied to the exceptional items in the income statement
is the Group's standard rate of 29.0% (2024 - 29.0%), inclusive of corporation
tax and Residential Property Developer Tax ('RPDT'), adjusted for the impact
of non-deductible items.

 

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 DLUHC. 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 ('FRAEW') construction. 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').

 

In total, for the year ended 31 July 2025 Bellway set aside a net exceptional
pre-tax expense of £63.3m (2024 - £21.7m), in relation to the SRT and
associated review. Of this expense, a net £50.7m (2024 - £5.8m) is
recognised in cost of sales and an adjusting finance expense of £12.6m (2024
- £15.9m) 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 £81.6m (2024 - £32.7m) relating to cost estimate increases, and a further
expense of £0.2m (2024 - £6.7m) following a decrease (2024 - decrease) in
discount rates during the period (note 7), which are offset by provision
releases of £30.9m (2024 - £33.3m).

 

Notes (continued)

 

3.   Net legacy building safety expense and other exceptional items
(continued)

 

The net exceptional cost of sales expense includes one-off cost recoveries of
£0.2m (2024 - £0.3m),across several sites, which have been pursued for
several years.

 

The total amount Bellway has set aside in relation to the SRT and associated
review since 2017 is £673.2m (2024 - £609.7m). 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.

 

We have undertaken an extensive survey program in the year as required by the
Joint Plan, such that we have now made determinations of which buildings
require works for all buildings in England and Wales. A higher proportion of
buildings were found to require works, both externally and internally, than
was previously assumed which has led to an increase in the provision.

 

Cost estimates have been reviewed and updated in the year based on the latest
scopes following surveys undertaken, tendered works and progress with
remediation. These cost estimates are based on our extensive experience to
date, using analysis of previously tendered works, costs to date on similar
developments and prudent, professional estimates based on knowledge of known
issues.

 

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 July 2025, and including those buildings that have been awarded an
application by the Building Safety Fund or ACM Funds, Bellway had a total of
168 buildings where work is complete or underway.

 

Total recoveries recognised since 2017 are £80.5m (2024 - £80.3m).
Reimbursement assets of £0.1m (2024 - £0.1m) remained outstanding at the
year end.

 

A recovery of £4.7m was awarded during the year under adjudication with one
subcontractor; however, as this recovery is not virtually certain, it has not
been recognised in the financial statements.

 

Structural defects

 

The Building Safety Act 2022 introduced an amendment to the limitation period
applicable to claims under the Defective Premises Act 1972, retrospectively
increasing the liability period for structural defects in all dwellings built
prior to 28 June 2022 from 6 years to 30 years.

 

Due to the change in legislation establishing a retrospective legal obligation
for structural defects in dwellings, this is seen as a highly unusual event
and is the primary reason the structural defects provision is treated as an
adjusting item.

 

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.

 

During the current year, following a further review of historical buildings,
the Group was notified of the same structural defect at a mid-rise apartment
scheme in Slough, which completed in 2006. This building also has a reinforced
concrete frame and was designed by the same structural engineer.  This
building was not included in the previous review undertaken by the Group as it
was less than 18 metres in height and at the time of that review the
government required buildings to be classified into two groups by reference to
height. The taller group, considered to be the higher risk buildings were
classified as above 18 metres in height, and this formed the basis of the
initial review.  The definition of a higher risk building was widened as part
of the Building Safety Act 2022 to include buildings with seven or more
storeys, with the Slough site meeting this wider definition.

 

Notes (continued)

 

3.   Net legacy building safety expense and other exceptional items
(continued)

 

The increase in the limitation period means Bellway has a legal obligation for
undertaking the remedial works at both the Greenwich and Slough sites.

 

The Group has carried out a further review in the year of all buildings over
11 metres in height constructed by, or on behalf of Bellway, where the same
third parties responsible for the design of the reinforced concrete frame at
these two developments have been involved. To date, no other similar design
issues with reinforced concrete frames have been identified.

 

The current provision for the cost of the remediation work across both
buildings is £33.5m (2024 - £45.6m).

 

During the year, the remediation strategy has been finalised for the Greenwich
scheme. This strategy is less invasive than the remediation design applied in
the previous year which has led to a reduction in the cost estimate. This cost
estimate is based on an expert third-party report and reflects management's
expected scope of works.

 

In total, for the year ended 31 July 2025 Bellway recognised an exceptional
pre-tax credit of £11.5m (2024 - expense of £15.3m), in relation to the
structural defects. Of this, a credit of £13.3m (2024 - expense of £14.1m)
is recognised in cost of sales.

 

The net credit recognised in cost of sales includes an expense of £6.0m (2024
- £13.8m) relating to the cost estimate for the additional building
identified, and a further expense of £0.2m (2024 - £0.3m) following a
decrease (2024 - decrease) in discount rates during the year (note 7), which
are offset by provision releases of £19.5m (2024 - nil).

 

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.

 

We are actively seeking recoveries in relation to the structural defects
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.

 

Other exceptional items

 

During the prior 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 (2024 - £5.4m) of
costs associated with this aborted transaction as exceptional.

 

In the current year, there is an expense of £15.4m (2024 - £nil) for costs
incurred relating to the CMA market investigation, including a voluntary
commitment to the CMA. These non-recurring costs have been classified as
exceptional given their size and nature. The voluntary commitment is included
in accruals and is expected to be paid within three months from the CMA
accepting the commitments.

 

Bellway has engaged proactively with the CMA throughout its investigation,
including by voluntarily offering binding commitments, alongside the six other
housebuilders, in response to the potential concerns investigated by the CMA,
and with a view to resolving expeditiously the investigation.  Under the
terms of the offered commitments, Bellway will contribute £13.5m to a total
payment of £100m to be paid by the seven UK housebuilders in aggregate to
government programmes that fund and support the construction of affordable
housing across the UK. Bellway's offer of commitments does not constitute an
admission of any wrongdoing, and the CMA has made no determination as to the
existence of any infringement of competition law. Bellway welcomes the CMA's
consultation on the voluntary commitments and will continue to work
constructively with the CMA throughout the process.

 

 

Notes (continued)

 

4.   Earnings per ordinary share

 

Basic earnings per ordinary share is calculated by dividing profit for the
year by the weighted average number of ordinary shares in issue during the
year (excluding the weighted average number of ordinary shares held by the
Company or Trust which are treated as cancelled).

 

Diluted earnings per ordinary share uses the same profit for the year 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 profit
for the year by the diluted weighted average number of ordinary shares.

 

Reconciliations of the profit for the year and weighted average number of
shares used in the calculations are outlined below:

 

 ( )                                       Profit    Weighted average number of ordinary shares  Earnings per share  Profit      Weighted average number of ordinary shares  Earnings per share

                                           for the                                                                    for the

                                            year                                                                      year
                                           2025      2025                                        2025                2024        2024                                        2024
                                           £m        Number                                      p                   £m          Number                                      p

 For basic earnings per ordinary share     157.5     118,644,063                                 132.8               130.5       118,830,821                                 109.8
 Dilutive effect of options and awards               889,652                                     (1.0)                           846,522                                     (0.8)

 For diluted earnings per ordinary share   157.5     119,533,715                                 131.8               130.5       119,677,343                                 109.0

 

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 shares  Underlying earnings  Underlying   Weighted average number of ordinary shares  Underlying

                                                      profit for                                               per share            profit for                                               earnings

                                                       the year                                                                      the year                                                per share
                                                      2025         2025                                        2025                 2024         2024                                        2024
                                                      £m           Number                                      p                    £m           Number                                      p

 For basic underlying earnings per ordinary share     209.7        118,644,063                                 176.7                160.6        118,830,821                                 135.2
 Dilutive effect of options and awards                             889,652                                     (1.3)                             846,522                                     (1.0)

 For diluted underlying earnings per ordinary share   209.7        119,533,715                                 175.4                160.6        119,677,343                                 134.2

 

Notes (continued)

 

5.   Taxation

 

The effective tax expense is 29.0% of profit before taxation (2024 - 29.0%).
Both the standard tax rate and effective

tax rate include RPDT.

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%, the introduction of this has
not affected Bellway and no additional tax is expected to be due.  The
Multinational Top-up Tax does not 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.

It is currently expected that the Group's standard rate of tax, including
RPDT, for the year ending 31 July 2026 will be 29%.

 

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) held by the Group are valued at the
substantively enacted corporation tax and RPDT rates totalling 29% that will
be effective when they are expected to be realised.

 

 

6.   Inventories

 

                           2025     2024
                           £m       £m

 Land                      2,502.9  2,431.4
 Work-in-progress          2,165.0  2,123.9
 Showhomes                 144.9    145.0
 Part-exchange properties  25.3     14.5

 Total                     4,838.1  4,714.8

 

In the ordinary course of business, inventories have been written down by a
net £1.2m in the year (2024 - £8.2m).

 

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.

 

Notes (continued)

 

7.   Provisions and reimbursement assets

 

                                          SRT and associated review            Structural defects                 Total legacy building safety improvements
                                          Provision  Reimbursement  Total      Provision  Reimbursement  Total    Provision       Reimbursement   Total

                                                      assets                               assets                                  assets
                                          £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 3)  (50.9)     0.2            (50.7)     13.3       -              13.3     (37.6)          0.2             (37.4)
 Analysed as:
 Additions                                (81.6)     0.2            (81.4)     (6.0)      -              (6.0)    (87.6)          0.2             (87.4)
 Released                                 30.9       -              30.9       19.5       -              19.5     50.4            -               50.4
 Change in discount rate                  (0.2)      -              (0.2)      (0.2)      -              (0.2)    (0.4)           -               (0.4)
 Utilised/(received)                      44.2       (0.2)          44.0       0.6        -              0.6      44.8            (0.2)           44.6
 Unwinding of discount (notes 3, 9)       (12.6)     -              (12.6)     (1.8)      -              (1.8)    (14.4)          -               (14.4)

 At 31 July 2025                                     0.1            (482.8)    (33.5)     -              (33.5)   (516.4)         0.1             (516.3)

                                          (482.9)

 

The provision is classified as follows:

 

              SRT and associated review  Structural defects  Total

                                                             legacy building safety improvements
              £m                         £m                  £m

 Current      (164.8)                    (1.1)               (165.9)
 Non-current  (318.1)                    (32.4)              (350.5)

 Total        (482.9)                    (33.5)              (516.4)

 

The Group has established a provision for the cost of performing fire remedial
works on a number of legacy developments and structural defects relating to
historical apartment schemes (note 3).

 

8.   Analysis of net cash/(debt)

 

                                 At 1 August  Cash   At 31 July
                                 2024         flows  2025
                                 £m           £m     £m

 Cash and cash equivalents       119.5        52.3   171.8
 Fixed rate sterling USPP notes  (130.0)      -      (130.0)

 Net (debt)/cash                 (10.5)       52.3   41.8

 

 

Notes (continued)

 

9.   Finance income and expenses

 

                                                                                 2025  2024
                                                                                 £m    £m

 Interest receivable on short-term bank deposits                                 3.8   3.8
 Other interest receivable                                                       5.8   5.7

 Finance income                                                                  9.6   9.5

                                                                                 2025  2024

£m
                                                                                 £m

 Interest payable on bank loans                                                  3.4   3.8
 Interest payable on fixed rate sterling USPP notes                              3.4   3.4
 Interest on deferred term land payables                                         14.9  11.1
 Unwinding of the discount on the legacy building safety improvements provision  14.4  17.1
 (notes 3, 7)
 Interest payable on leases                                                      0.8   0.4
 Other interest payable                                                          -     0.5

 Finance expenses                                                                36.9  36.3

 

The unwinding of the discount on the legacy building safety improvements
provision is an adjusting item (note 3).

 

10.  Financial instruments - fair value disclosures

 

The fair value of financial assets and liabilities are determined based on
discounted cash flow analysis using prevailing market rates for similar
instruments.

 

The carrying values of financial assets and liabilities reasonably approximate
the fair value of the instruments.

 

11.  Reserves

 

Share premium

 

This reserve is not distributable.

 

Own shares held

 

Bellway p.l.c. 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.

 

                                        2025     2024
                                        Number   Number

 At start of year                       326,114  327,202
 Transferred to employees or Directors  (1,000)  (1,088)

 Shares purchased                       44,983   -

 At end of year                         370,097  326,114

 

                                           2025  2024
                                           £m    £m

 Cost of shares held in the Trust          9.8   8.8
 Market value of shares held in the Trust  9.2   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 £20.0m, 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 Bellway p.l.c. purchased 4,560,057
of its own shares which it cancelled. On cancellation of the shares, the
aggregate nominal value of £0.6m was transferred from issued capital to the
capital redemption reserve. This reserve is not distributable.

 

Notes (continued)

 

11.  Reserves (continued)

 

                                                                              2025  2024
                                                                              £m    £m

 At start of year                                                             20.6  20.4
 Amounts transferred in respect of own shares purchased and cancelled during  -     0.2
 the year

 At end of year                                                               20.6  20.6

 

12.  Dividends on equity shares

 

                                                                              2025   2024
                                                                              £m     £m

 Amounts recognised as distributions to equity holders in the year:
 Final dividend for the year ended 31 July 2024 of 38.0p per share (2023 -    45.1   112.7
 95.0p)
 Interim dividend for the year ended 31 July 2025 of 21.0p per share (2024 -  24.9   19.0
 16.0p)

                                                                              70.0   131.7

 Proposed final dividend for the year ended 31 July 2025 of 49.0p per share   58.1   45.1
 (2024 - 38.0p)

 

The 2025 proposed final dividend is subject to approval by shareholders at the
Annual General Meeting on 27 November 2025 and, in accordance with IAS 10
'Events after the Reporting Period', has not been included as a liability in
these financial statements. The proposed final dividend, subject to
shareholder approval, will be paid on 14 January 2026 to all ordinary
shareholders on the Register of Members on 5 December 2025. The ex-dividend
date is 4 December 2025. At the record date for the final dividend for the
year ended 31 July 2024, shares were held by the Trust on which dividends had
been waived (see note 11).

 

The level of distributable reserves are sufficient in comparison to the
proposed dividend.

 

13.  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 3, 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.

 

 

 

Notes (continued)

 

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 other
exceptional items, and are reconciled to total gross profit and total
operating profit on the face of the Group income statement.  The Directors
consider that the removal of the net legacy building safety expense and other
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 other 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
other 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 other 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 other 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 other exceptional items.  The
Directors consider this to be an important indicator of the profitability of
the Group before taxation.

 

§  Underlying profit for the year - This is the profit for the year before
net legacy building safety expense and other 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 year divided by the weighted average number of ordinary shares in
issue during the year (excluding the weighted average number of ordinary
shares held by the Company or Trust which are treated as cancelled).  This is
calculated in note 4.

 

§  Underlying dividend cover - This is calculated as underlying profit for
the year per ordinary share divided by the dividend per ordinary share
relating to that period.  At the half year the dividend per ordinary share is
the proposed 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.

 

§  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 proposed
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.

 

Notes (continued)

 

14.  Alternative performance measures (continued)

 

§  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 indicator of the net investment by the Group in the period to achieve
future growth.

 

                                                                            2025     2024     Mvt      2024     2023     Mvt
 Per balance sheet                                                          £m       £m       £m       £m       £m       £m

 Land                                                                       2,502.9  2,431.4  71.5     2,431.4  2,578.8  (147.4)
 Work-in-progress                                                           2,165.0  2,123.9  41.1     2,123.9  1,861.6  262.3

 Increase in capital invested in land and work-in-progress in the year

                                                                                              112.6                      114.9

 Land creditors                                                             (337.6)  (225.3)  (112.3)  (225.3)  (368.8)  143.5

 Increase in capital invested in land, net of land creditors, and work-in-
 progress in the year

                                                                                              0.3                        258.4

 

§ 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 plus
net debt or less net cash. The Directors consider this to be an important
indicator of the operating efficiency and performance of the Group. The
definition has been updated in the year as explained below in the calculation
for underlying return on capital employed.

§ Underlying return on capital employed ('underlying RoCE') - This is
calculated as operating profit before net legacy building safety expense and
other exceptional items divided by the average capital employed. Average
capital employed is calculated based on opening, half year and closing 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.

 

                                                                                                                        *Restated                     *Restated
                                             2025            2025            2025                                       2024              2024        2024
                                           Capital employed  Land creditors  Capital employed including land creditors  Capital employed  Land        Capital employed including land

                                                                                                                                          creditors   creditors
                                           £m                £m              £m                                         £m                £m          £m

 Underlying operating profit               303.5                             303.5                                      238.1                         238.1

 Capital employed/land creditors:
                      Opening              3,475.9           225.3           3,701.2                                    3,229.6           368.8       3,598.4
                      Half year            3,530.4           289.7           3,820.1                                    3,357.6           238.5       3,596.1
                      Closing              3,514.4           337.6           3,852.0                                    3,475.9           225.3       3,701.2

                      Average              3,506.9           284.2           3,791.1                                    3,354.4           277.5       3,631.9

 Underlying return on capital employed

                                           8.7%                              8.0%                                       7.1%                          6.6%

 *The definition of capital employed has been updated to deduct net cash. The
 comparative figures have therefore been restated to reflect this change. This
 was done to ensure consistency in the calculation of the performance measure
 with other companies in the housebuilding sector to allow for more meaningful
 comparison.

 

§ 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, half year and closing 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.

 

Notes (continued)

 

14.  Alternative performance measures (continued)

 

                                                                                                                    *Restated                     *Restated
                                       2025              2025            2025                                       2024              2024        2024
                                       Capital employed  Land creditors  Capital employed including land creditors  Capital employed  Land        Capital employed including land

                                                                                                                                      creditors   creditors
                                       £m                £m              £m                                         £m                £m          £m

 Operating profit                      250.7                             250.7                                      212.8                         212.8

 Capital employed/land creditors:
                    Opening            3,475.9           225.3           3,701.2                                    3,229.6           368.8       3,598.4
                    Half year          3,530.4           289.7           3,820.1                                    3,357.6           238.5       3,596.1
                    Closing            3,514.4           337.6           3,852.0                                    3,475.9           225.3       3,701.2

                    Average            3,506.9           284.2           3,791.1                                    3,354.4           277.5       3,631.9

 Return on capital employed            7.1%                              6.6%                                       6.3%                          5.9%

 *The definition of capital employed has been updated to deduct net cash. The
 comparative figures have therefore been restated to reflect this change. This
 was done to ensure consistency in the calculation of the performance measure
 with other companies in the housebuilding sector to allow for more meaningful
 comparison.

 

§ Asset turn - Asset turn is calculated as revenue divided by the average
capital employed.  Average capital employed is calculated based on opening,
half year and closing capital employed.  The Directors consider this to be an
important indicator of how efficiently the Group is using its assets to
generate revenue

 

§ Underlying pre-tax return on equity ('underlying RoE') - This is calculated
as profit before taxation before net legacy building safety expense and other
exceptional items, divided by the average of the opening, half year and
closing net assets.  The Directors consider this to be a good indicator of
the operating efficiency of the Group.

 

                                         2025      2024
                                         £m        £m

 Underlying profit before taxation       289.1     226.1

 Net assets:
                     Opening             3,465.4   3,461.6
                     Half year           3,522.4   3,434.2
                     Closing             3,556.2   3,465.4

                     Average             3,514.7   3,453.7

 Underlying pre-tax return on equity     8.2%      6.5%

 

§ Pre-tax return on equity ('RoE') - This is calculated as profit before
taxation divided by the average of the opening, half year and closing net
assets.  The Directors consider this to be a good indicator of the operating
efficiency of the Group.

 

                               2025      2024
                               £m        £m

 Profit before taxation        221.9     183.7

 Net assets:
                Opening        3,465.4   3,461.6
                Half year      3,522.4   3,434.2
                Closing        3,556.2   3,465.4

                Average        3,514.7   3,453.7

 Pre-tax return on equity      6.3%      5.3%

 

 

Notes (continued)

 

14.  Alternative performance measures (continued)

 

·      Underlying post tax return on equity - This is calculated as
profit for the year before net legacy building safety expense and other
exceptional items, divided by the average of the opening, half year and
closing net assets.  The Directors consider this to be a good indicator of
the operating efficiency of the Group.

 

 

                                           2025      2024
                                           £m        £m

 Underlying profit for the year            209.7     160.6

 Net assets:
                      Opening              3,465.4   3,461.6
                      Half year            3,522.4   3,434.2
                      Closing              3,556.2   3,465.4

                      Average              3,514.7   3,453.7

 Underlying post tax return on equity      6.0%      4.7%

 

 

·      Post tax return on equity - This is calculated as profit for the
year divided by the average of the opening, half year and closing net
assets.  The Directors consider this to be a good indicator of the operating
efficiency of the Group.

 

 

                               2025      2024
                               £m        £m

 Profit for the year           157.5     130.5

 Net assets:
                Opening        3,465.4   3,461.6
                Half year      3,522.4   3,434.2
                Closing        3,556.2   3,465.4

                Average        3,514.7   3,453.7

 Post tax return on equity     4.5%      3.8%

 

 

§ Total growth in value per ordinary share - The Directors use this as a
proxy for the increase in shareholder value since 31 July 2022.  A period of
3 years is used to reflect medium-term growth.

 

 Net asset value per ordinary share:
                          At 31 July 2025          2,989p
                          At 31 July 2022          2,727p

 Net asset value growth per ordinary share                 262p

 Dividend paid per ordinary share:
                          Year ended 31 July 2025  59.0p
                          Year ended 31 July 2024  111.0p
                          Year ended 31 July 2023  140.0p

 Cumulative dividends paid per ordinary share              310.0p

 Total growth in value per ordinary share                  572.0p

 

 

 

 

Notes (continued)

14. Alternative performance measures (continued)

 

 

§ Annualised accounting return in NAV and dividends paid since 31 July 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 July
2022 (as detailed above) divided by the net asset value per ordinary share at
31 July 2022.  The Directors use this as a proxy for the increase in
shareholder value since 31 July 2022.

 

 Net asset value growth per ordinary share           262p
 Cumulative dividends paid per ordinary share        310.0p

 Total growth in value per ordinary share            572.0p

 Net asset value per ordinary share at 31 July 2022  2,727p

 Total value per ordinary share                      3,299.0p

 Annualised accounting return                        6.6%

 

§ Annualised accounting return in NAV and dividends paid since 31 July 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 July
2015 divided by the net asset value per ordinary share at 31 July 2015.  The
Directors use this as a proxy for the increase in shareholder value since 31
July 2015.

 

 Net asset value per ordinary share:
                             At 31 July 2025             2,989p
                             At 31 July 2015             1,286p

 Net asset value growth per ordinary share                       1,703p

 Dividend paid per ordinary share:
                             Year ended 31 July 2025     59.0p
                             Year ended 31 July 2024     111.0p
                             Year ended 31 July 2023     140.0p
                             Year ended 31 July 2022     127.5p
                             Year ended 31 July 2021     85.0p
                             Year ended 31 July 2020     100.0p
                             Year ended 31 July 2019     145.4p
                             Year ended 31 July 2018     132.5p
                             Year ended 31 July 2017     111.5p
                             Year ended 31 July 2016     86.0p

 Cumulative dividends paid per ordinary share                    1,097.9p

 Total growth in value per ordinary share                        2,800.9p

 Net asset value per ordinary share at 31 July 2015              1,286p

 Total value per ordinary share                                  4,086.9

 Annualised accounting return = -1                               12.3%

 

 

§ Underlying capital growth in the period - This is calculated as capital
growth in the period before net legacy building safety expense and other
exceptional items per share.

 Capital growth in the period                                              135.0p
 Net legacy building safety expense and other exceptional items per share  43.9p

 Underlying capital growth in the period                                   178.9p

 Net asset value at 31 July 2024                                           2,913p

 Underlying capital growth                                                 6.1%

 (178.9p/2,913p)

 

Notes (continued)

14. Alternative performance measures (continued)

 

§ Capital growth in the period - This is calculated as the increase in NAV in
the period combined with the ordinary dividend paid in the year.

 Net asset value per ordinary share:
 At 31 July 2025                            2,989p
 At 31 July 2024                            2,913p

 Net asset value growth per ordinary share          76p

 Dividend paid per ordinary share:
 Year ended 31 July 2025                            59.0p

 Capital growth in the period                       135.0p

 

§ Net cash/(debt) - This is the cash and cash equivalents less bank debt and
fixed rate sterling USPP notes. Net cash/(debt) 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 8.

 

§ Average net cash/(debt) - This is calculated by averaging the net
cash/(debt) position at 1 August and each month end during the year. The
Directors consider this to be a good indicator of the financing position of
the Group throughout the year.

§ 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.

                                                                         2025    2024
                                                                         £m      £m

 Cash from/(utilised in) operations                                      222.0   (20.2)

 Add: increase in capital invested in land, net of land creditors, and   0.3     258.4
 work-in-progress (as described above)

 Cash generated from operations before investment in land, net of land   222.3   238.2
 creditors, and work-in-progress

§ Adjusted operating cashflow (before land spend, legacy building safety
spend, and shareholder returns)  - This is calculated as the net change in
cash and cash equivalents, adding back cashflows relating to land spend, the
utilisation of the legacy building safety provision and shareholder returns.
Land spend is cashflows related to the acquisition of land. Shareholder
returns include payments to shareholders through dividends and share buyback
programmes. The Directors consider this as an indicator of how effective the
Group is at generating cash to invest in future growth and drive long term
value creation for shareholders.

                                                                               2025    2024
                                                                               £m      £m

 Net increase/(decrease) in cash and cash equivalents                          52.3    (242.5)

 Add back:
 Land spend                                                                    472.0   465.0
 Utilisation of total legacy building safety improvements provision, net of    44.6    36.1
 reimbursement assets
 Dividends paid                                                                70.0    131.7
 Share buyback programme                                                       -       34.9

 Adjusted operated cashflow (before land spend, legacy building safety spend   638.9   425.2
 and shareholder returns)

 

 

 

 

Notes (continued)

14. Alternative performance measures (continued)

 

§ Adjusted gearing - This is calculated as the total of net cash/(debt) 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.

 

                    2025        2024
                    £m          £m

 Net cash/(debt)    41.8        (10.5)
 Land creditors     (337.6)     (225.3)

                    (295.8)     (235.8)

 Total equity       (3,556.2)   (3,465.4)

 Adjusted gearing   8.3%        6.8%

§ 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.

 

                  2025        2024
                  £m          £m

 Net cash/(debt)  41.8        (10.5)

 Total equity     (3,556.2)   (3,465.4)

 Gearing          -           0.3%

 

 

§ 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.

 

 

15.  Post balance sheet events

Share buyback

 

The Board has approved a return of £150m surplus capital to shareholders,
through a share buyback programme, with contract terms agreed on Monday 13
October 2025. The buyback programme will consist of two tranches. The first
£75m tranche is irrevocable, and it was recognised as a liability, on 13
October 2025. The second £75m tranche is not yet contracted; it can therefore
be revoked and, as such, it is not yet recognised as a liability.

 

 

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 which includes 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. The
Directors confirm that they have conducted a robust assessment of the
principal risks facing the Group.

 

The Board has completed its assessment of the Group's emerging and principal
risks. The following nine principal risks to our business have been
identified:

 

 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, impacting the ability to deliver volume growth targets.
                                                     requirements.

                                                                                § Operating profit.

                                                                                  § Pricing pressures / increased costs impact returns.
                                                     § Processes are in place to select, appoint, manage, and build long-term
                                                                                                                                                                   § Operating margin.                                   relationships with subcontractors and suppliers.

                                                                                                                                                                   § EPS.

                                                                                                                                                                   § Gross margin.

                                                                                                                                                                   § Customer satisfaction score.
 Climate change and the environment

 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.    § Consultation with specialist external advisers and subject matter experts
 climate change, including physical environmental impacts and transition risks    to climate change and the disclosures made. Failure to improve policies,
                                                     (e.g. sustainability consultants).
 associated with new regulation, reporting requirements, and increased            reporting and performance in line with new government regulations and            § Percentage of renewable electricity.

 social/market expectations.                                                      heightened expectations could lead to financial penalties and reputational
                                                     § Continual monitoring of new and evolving requirements as part of our legal
                                                                                  damage.                                                                          § Tonnes of waste per home built.                     and regulatory compliance framework.

                                                                                  § The physical impacts of climate change could lead to disruptions within the    § Percentage of waste diverted from landfill.         § Carbon reduction is a key priority under the Group's 'Better with Bellway'
                                                                                  supply chain and build programmes.                                                                                                     sustainability strategy.

                                                                                                                                                                                                                         § Dedicated sustainability, innovations and biodiversity resources in place
                                                                                                                                                                                                                         to assess risks, monitor performance and drive improvement.

                                                                                                                                                                                                                         § Regular review of the design and features of new homes, along with
                                                                                                                                                                                                                         construction methods and the sustainability of materials.

 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 policy) reduce the affordability of new homes, resulting in reduced                                                                                    § Operating profit.                                   necessary.
 sales rates.

                                                                                                                                                                   § 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.

                                                                                                                                                                   § Average selling price.

 

 Health and safety

 A serious health and safety or environmental 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 while at one of our business locations could delay     § Health and safety incident rates.                                        § 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 near-miss incidents reported.                                  standards and performance against health and safety policies and legislation.

                                                                                                                                                                  § Number of NHBC Pride in the Job awards.                                  § 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 voluntary turnover rate.                                        § 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 over ten years or more.      management.

                                                                                                                                                                  § Training days per employee.                                              § Monitoring staff turnover, absence data and feedback from exit interviews.

                                                                                                                                                                  § Senior management gender split.                                          § Competitive salary and benefits packages which are regularly reviewed and

                                                                          benchmarked.
                                                                                                                                                                  § Percentage of staff in earn and learn roles.

                                                                          § Employee engagement activities undertaken, including an annual survey, with
                                                                                                                                                                  § Employee Engagement Survey response rate.                                results communicated to the Board.

                                                                                                                                                                  § Percentage of staff who would describe Bellway as a 'great place to      § Succession plans in place and key person dependencies identified and
                                                                                                                                                                  work'.                                                                     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 systems.
 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
                                                                                                                                                                  § RoE.                                                                     training.

                                                                                                                                                                  § EPS.                                                                     § Regular review and testing of our IT security measures, contingency plans

                                                                          and policies.
                                                                                                                                                                  § Gross margin.

                                                                          § Security Committee in place.
                                                                                                                                                                  § Customer satisfaction score.
 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
                                                                                                                                                                  § RoE.                                                                     of implementable planning permissions.

                                                                                                                                                                  § Number of plots in 'pipeline'.

                                                                                                                                                                  § 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, including the   § 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,
 Self Remediation Terms.                                                         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 advisers

                                                                          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 event      § NAV.                                                                     § Strong balance sheet, low financial gearing, committed bank loan facilities
                                                                                 could materially impact the Group's operations and liquidity.
                                                                          and USPP debt which would help ensure resilience during a recession.

                                                                                § Operating profit.

                                                                                 § Damage to reputation if the Group is not perceived to be following
                                                                          § Maintenance of business resilience and continuity plans covering offices,
                                                                                 government guidelines and acting responsibly.                                    § Operating margin.                                                        sites, and IT.

                                                                                                                                                                  § RoCE.                                                                    § Experienced and well-established senior management team.

                                                                                                                                                                  § EPS.                                                                     § Continued investment in systems and infrastructure to enable robust agile

                                                                          working.
                                                                                                                                                                  § Total dividend per ordinary share.

                                                                          § Monitoring of government guidelines (including the Construction Leadership
                                                                                                                                                                  § Gross margin.                                                            Council).

                                                                                                                                                                  § Reservation rate.                                                        § Regular communications with subcontractors and suppliers to understand any

                                                                          potential issues as a result of the event on their own business and supply
                                                                                                                                                                  § Order book value.                                                        chain.

                                                                                                                                                                  § Employee turnover.

 

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 of Directors, 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 housing revenue 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 year,
excluding the weighted average number of ordinary shares held by the Company
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 of Housing, Communities and Local Government formally called
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 improvements 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 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
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
other 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.

 

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", "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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