REG - Bellway PLC - Trading Update

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RNS Number : 4491H  Bellway PLC  09 June 2026

9 June
2026

Trading update

 

Bellway p.l.c. is today issuing a trading update in respect of the period from
1 February to 29 May 2026.

 

Jason Honeyman, Chief Executive, commented:

 

"Bellway continues to perform robustly in an increasingly challenging market,
with customer demand having moderated in recent weeks, after a positive start
to the spring selling season. Notwithstanding this, and supported by our
forward order book, we are on track to deliver FY26 underlying operating
profit within the previously guided range of £320m - £330m(1).

 

The outlook beyond the current financial year remains uncertain, reflecting
ongoing geopolitical tensions in the Middle East and a less predictable
domestic political environment. Against this backdrop our clear focus on
self-help and drive for capital efficiency provides resilience while
supporting our strategy to increase cash generation and shareholder returns."

 

 

Market and trading

 

Trading in the early part of the spring selling season showed a marked
improvement compared to autumn 2025, however we have seen a moderation in
customer demand in April and May in response to the recent rise in mortgage
rates. Current reservation rates generally remain above the levels in the
first half of the financial year, with incentive usage averaging around 5%.

 

There is renewed upward pressure on building material costs stemming from
higher fuel and energy input costs, and we are seeing increased prices and the
introduction of surcharges by certain supply chain partners. Together with the
benefits of our scale, we are actively managing cost pressures through a
combination of disciplined procurement, the introduction of new standard house
types, and close control of site production and overheads. We will have better
visibility on overall build cost inflation for FY27 when we report later in
the year.

 

Due to the planned timing of outlet closures and openings, the Group traded
from an average of 233 outlets in the period (2025 - 242), and we continue to
expect to operate from an average of around 240 outlets for the full financial
year (31 July 2025 - 246). We remain on track to open over 40 new outlets in
the second half of the financial year, with a further strong programme of
openings in FY27.

 

The private reservation rate decreased by 6.2% to an average of 151 per week
(2025 - 161). In line with our strategy, there was a good contribution from
bulk sales and the private reservation rate per outlet per week was 0.65 (2025
- 0.67). The private reservation rate excluding bulk sales was 0.58 (2025 -
0.61). The overall reservation rate, including social homes, was 5.1% lower at
186 per week (2025 - 196) and the cancellation rate remains low at 10% (2025 -
11%).

 

The forward order book comprised 5,345 homes at 29 May 2026 (1 June 2025 -
5,759 homes) with a value of £1,570m(2) (1 June 2025 - £1,650m).

 

 

Land investment

 

Land investment has remained disciplined and highly selective, and we are
prioritising opportunities in locations supported by relatively resilient
underlying customer demand. Underpinned by the strength and depth of our
existing land bank, the Group has contracted to purchase 6,744 plots since 1
August 2025 (1 August 2024 to 1 June 2025 - 6,759 plots) across 24 sites (1
August 2024 to 1 June 2025 - 42 sites) with a total contract value of £363m
(1 August 2024 to 1 June 2025 - £495m). As previously announced, this
included a large site comprising around 1,900 plots converted from our
strategic land bank in the Dunfermline Strategic Development Area, which will
act as an anchor site to support growth for both our Scotland West and
Scotland East divisions.

 

In addition, our strategic land bank has been further strengthened to support
our longer-term growth ambitions, with the Group entering into option
agreements to buy 16 sites since the start of the financial year (1 August
2024 to 1 June 2025 - 17 sites). Our strategic land bank comprises around
47,000 plots, over half of which have a positive planning status, and we
remain focused on delivering a growing proportion of our volume output from
strategically sourced land, with a target of over 20% in the medium term.
 

Capital allocation and financial position

 

Our capital allocation framework is based on maintaining balance sheet
strength and low gearing, while driving capital efficiencies to increase cash
generation. It is underpinned by a flexible approach to deliver value creation
for shareholders through optimising the balance between investment in growth
and returns to shareholders.

 

The Group has a well-capitalised balance sheet with net debt of £236m(3) at
29 May 2026 (2025 - £73m), in line with our expectations. Given the profile
of completions and associated cash generation through the remainder of FY26,
and after regular dividend payments and share buyback activity, we expect to
end the current financial year maintaining a low level of adjusted gearing in
the range of 5-10%(4) (31 July 2025 - 8.3%).

 

In addition to our disciplined land investment in the period to drive future
growth, the £150m share buyback launched on 14 October 2025 is progressing
well, and the Group intends to continue with the return of excess capital in
future years.

 

As announced at the Interim Results on 24 March 2026, the interim dividend was
increased to 23.0p per share (2025 - 21.0p) and will be paid on 1 July 2026.
The Board continues to expect underlying dividend cover for the full financial
year will be around 2.5 times(5).

 

 

Outlook

 

We are reiterating our guidance for FY26 volume output of between 9,300 and
9,500 homes, and we remain on track to deliver FY26 underlying operating
profit within the previously guided range of £320m - £330m(1).

 

Our industry continues to face challenging headwinds, increasing the risk of a
more prolonged period of softer customer demand alongside renewed inflationary
pressure on build costs. In response, we are maintaining a sharp focus on the
monetisation of our well-invested land bank and work-in-progress position
through FY26 and beyond to support improvements in asset turn and cash
generation.

 

This continued emphasis on self-help and capital efficiency will help mitigate
these external pressures and underpin our strategy to deliver enhanced
shareholder returns over the medium term.

 

The Group's next scheduled trading update, covering the financial year ending
31 July 2026, is on 11 August 2026.

 

 

Notes and definitions

 

-  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.

-  Comparatives are for the period from 1 February to 1 June 2025 or as at 1
June 2025 ('2025') unless otherwise stated.

1    Underlying operating profit is operating profit before net legacy
building safety expense and other exceptional items.

2 (    ) Forward order book is the total expected sales value of
reservations that have not legally completed.

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

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

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

 

 

For further information, please contact:

 

Analyst and investor enquiries

Gavin Jago, Group Investor Relations Director

investor.relations@bellway (mailto:investor.relations@bellway) .co.uk

0191 217 0717

 

Media enquiries

Paul Lawler, Group Head of Communications

paul.lawler@bellway (mailto: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

 

 

Note on forward-looking statements

 

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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