Bellway reports strong growth as stock rises on robust sales and outlook

Investing.com -- Bellway Plc (LON:BWY) on Tuesday reported an 11.9% increase in housing completions and a 12.3% rise in revenue for the first half of its financial year, signaling strong performance amid a steady housing market and easing cost pressures, sending its share up by over 2%.

The residential property developer and housebuilder company recorded 4,577 housing completions, generating revenue of £1.429 billion. 

The average selling price remained stable at £310,581 per home. Underlying operating profit rose 11.9% to £156.6 million, maintaining an 11% margin. 

Profit before taxation, after adjustments, stood at £150.2 million, with basic earnings per share at 84.6p. 

Bellway announced an interim dividend of 21p per share, up from 16p in the previous year.

The company’s land bank remains strong, comprising 95,506 plots, ensuring future supply. It secured 5,246 new plots, more than the 1,237 plots acquired a year earlier. 

Bellway traded from an average of 248 outlets, up from 243, despite planning system challenges.

Consumer demand has remained solid, with the private reservation rate per outlet per week increasing by 18.6% to 0.51. 

The forward order book as of mid-March 2025 included 5,582 homes, valued at £1.58 billion—an 18% increase from the previous year’s £1.34 billion.

While affordability pressures persist in the UK housing market, Bellway has benefited from stable mortgage availability and a rise in reservations since the start of the year. 

The company remains on track to meet its full-year target of at least 8,500 completions.

RBC Capital Markets analysts noted that Bellway’s operating profit and profit before tax were about 3% below consensus estimates but emphasized that the company has reiterated its full-year guidance. 

The forward order book grew 10% year-over-year in unit terms, with an 18% increase in value. The private reservation rate improved by 13%, driven largely by bulk sales. 

Pricing across Bellway’s regions has remained firm, with incentives used selectively. RBC maintains an "outperform" rating on Bellway with a price target of 3,600p, implying a 49% potential upside.

Build cost inflation remained in the low single digits. Procurement strategies and supplier agreements helped mitigate cost increases, while ongoing investments in timber frame construction are expected to improve efficiency.

Bellway continues to allocate funds for addressing legacy building safety issues, with £9.4 million set aside for remediation work in the first half of the year. 

Since the start of its remediation program, the company has committed £163 million to building safety improvements, with ongoing assessments progressing in line with government requirements.

Bellway remains focused on growth, supported by its land bank, strong development pipeline, and sustained consumer demand. 

The company is also prioritizing long-term sustainability through strategic land investments and carbon reduction initiatives under its ’Better with Bellway’ program.