24 March 2026
If you are covering Bellway’s interim results, please see the following comment from Oli Creasey, head of property research at Quilter Cheviot:
“Bellway posted mixed interim results this morning. There is evidence of top-line progress, with sales volumes up 2.7% compared to its half year results last year, and the average sales price up 3.7%, although the latter is at least partly affected by the types of homes sold in the period. Management has raised its full year guidance for sales volumes, expecting overall sales to now grow by 7.4% year-on-year.
“However, investors will be less pleased to see an erosion of profit margins, with the company's operating margin reducing by 50bps to 10.5%, and management expects this to be similar in the second half of the year as well. This has been caused by an increase in administrative costs, which are blamed on a combination of higher employee salary costs and the costs of the company's new timber manufacturing division. While both have the potential to deliver longer-term gains to the business, investors who are looking for signs of recovering profitability in housebuilders may be frustrated by the near-term impact. Likewise, the trading performance for the second half of the year so far, from 1st February, is underwhelming, with the sales rate of 0.70x slower than the 0.76x equivalent figure last year.
“Management has noted that there has not been a material impact to trading from the ongoing events in the Middle East. However, it recognised that the Iran conflict has the potential to impact both cost inflation and customer demand, with volatility in the mortgage market already being experienced. The longer the conflict goes on for, the more meaningful it is likely to become for housebuilders such as Bellway.”
