Bellway sticks with annual outlook but demand cools in April and May
Bellway PLC on Tuesday backed full-year profit guidance but noted the outlook beyond the current financial year remains uncertain, while customer demand has moderated in recent weeks.
The Newcastle upon Tyne-based housebuilder continues to forecast volume output of between 9,300 and 9,500 homes in the financial year to July, and underlying operating profit of £320 million to £330 million. This compares to 8,749 homes and £303.5 million in the prior financial year.
In a trading update covering February 1 to May 29, Chief Executive Jason Honeyman said Bellway continued to perform ‘robustly in an increasingly challenging market’, but added the outlook beyond the current financial year remains ‘uncertain’.
Shares in Bellway rose 1.1% to 1,774.00 pence each in London on Tuesday morning but have fallen 34% in the last 12 months.
Bellway said trading in the early part of the spring selling season showed a marked improvement compared to autumn 2025. However, it saw 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%, the firm added.
The FTSE 250-listing said that there is ‘renewed upward pressure’ on building material costs, but it is actively managing cost pressures through ‘disciplined’ procurement, new standard house types and close control of production and overheads.
The company said it remains on track to open over 40 new outlets in the second half of the financial year.
The private reservation rate per outlet per week edged down to 0.65 from 0.67 a year ago.
Land investment has remained ‘disciplined and highly selective’, with Bellway prioritising opportunities in locations supported by relatively resilient underlying customer demand.
The forward order book comprised 5,345 homes at the end of May, down from 5,759 homes a year ago, with a value of £1.57 billion, lower than £1.65 billion.
Net debt at May 29 is £236 million, more than triple the prior year’s £73 million, but in line with expectations. Bellway expects to end the current financial year with adjusted gearing in the range of 5% to 10% compared to 8.3% at the end of last July.
The board continues to expect underlying dividend cover for the full financial year will be around 2.5 times.
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