If you are covering Bellway’s latest financial results, please find below a comment from Oli Creasey, head of property research at Quilter Cheviot:
“Bellway's full year results demonstrate incremental improvement for the UK housebuilder. Sale volumes increased 14%, albeit off a relatively low base given volumes fell 30% in 2024, and operating profit (28%) and EPS (30%) also grew substantially as a result, despite only modest progression in the operating margin, which increased to 10.9% from 10.0% last year. While that improvement is helpful, it should be seen in context; the equivalent margin was 18.5% in 2022, demonstrating the scale of the recovery the company (and wider sector) still has in front of it.
“Bellway reported an improving reservation rate of 0.57x sales per outlet per week through, but with the number strengthening to 0.62x in the second half of the year. However, that improvement has proven to be short-lived; the company has remarked that the sales environment has been relatively weak since Spring 2025, pointing to affordability constraints and budget uncertainty. Since its next financial year started on 1st August, the company has seen that reservation rate fall back to just 0.51x. And while management has guided to a further 5% growth in sales for this current year, that is based on a reservation rate comparable to FY 2025 (0.57x), and year-to-date we think the company is slightly behind last year's run-rate.
“Bellway has launched a £150m share buyback programme, similar to one run in 2023. While this should provide some level of support to the shares, we note that net cashflow for the company, after regular dividends were paid, was £52m in 2025, and with net cash at year end at £42m, the suggestion is that net debt may increase in order to fund this. A modest net debt position of around £50m at the end of next year would still be modest, but notable in that most housebuilders prefer to limit the use of debt generally and retain a net cash position on balance sheet.”
