U.K. housebuilder Bellway reported a fall in pretax profit for fiscal 2024 but guided for higher volumes and better margins in fiscal 2025.
Bellway Heading in the Right Direction But Recovery Pace Might Be Troubling
0900 GMT - Bellway's investors are more interested in the housebuilder's outlook for the next year as fiscal 2024 was a tough year and its weakness--pretax profit fell by almost 60%--came as no surprise, Quilter Cheviot analyst Oli Creasey says in a note. Although the direction of travel is positive, the pace of recovery is a little troubling with the company forecasting an 11% increase in volumes next year, Creasey says. Although this is an improvement on fiscal 2024's low base, it is still 22% lower compared to fiscal 2023, he says. Shares are up 6.8% at 3,260 pence. (anthony.orunagoriainoff@dowjones.com)
Bellway's Volume Expectations, Orderbook to Prompt Upgrades
0911 GMT - Bellway's update is seen as solid, with the housebuilder targeting a material increase in volumes for FY 2025 as its year-on-year forward orderbook is 10% higher in with units standing at 5,109 and has a 16% higher value at 1.43 billion pounds, Goodbody says. The robustness of the volume picture and a better margin outlook--expected to approach 11%--will like prompt analysts to increase fiscal-year operating profit forecasts to around 290 million pounds, from 269 million pounds, with Visible Alpha consensus for the metric at 275 million pounds, Goodbody's analyst Shane Carberry says in a note. "The market should take comfort in the volume outlook," he says. Shares are up 7.2% at 3,272 pence. (anthony.orunagoriainoff@dowjones.com)
Bellway's Outlook Likely to Please Investors
0914 GMT - With Bellway's revenue for FY 2024 already known and its margins tightly guided for previously, the focus for investors is the housebuilder's outlook, Jefferies analysts say in a note. Although its performance in recent weeks has been robust, it hasn't been spectacular, with questions raised again over customer hesitancy ahead of the U.K.'s budget, the analysts say. "But with FY 2025 guidance suggesting consensus to be flat in the company's view, to slightly up--our view--and talk of an over 20% increase in volumes targeted on a two-year view giving similar trajectory for FY 2026, we believe investors will start to feel comfortable to discuss the upside case for earnings," Jefferies says. Shares are up 7% at 3,266 pence. (anthony.orunagoriainoff@dowjones.com)
Bellway Ready for Recovery as Outlook Exceeds Results
0924 GMT - Although Bellway's results are in line with expectations its outlook for the year ahead exceeds them, RBC Capital Markets analyst Anthony Codling says in a note. The housebuilder is targeting delivery of at least 8,500 homes in FY 2025, compared with Visible Alpha consensus of 8,305 homes, and aims to retain a healthy forward order book for the year to support volume growth in FY 2026, he says. And it is ready to help the government's plan to deliver 1.5 million homes over the next five years and keen to grow its housebuilding business, Codling says. "Bellway believes it is well positioned to deliver strong multi-year growth against a backdrop of planning reform and improving housing market conditions," he says. Shares are up 7.6%, at 3,284 pence.(anthony.orunagoriainoff@dowjones.com)
(END) Dow Jones Newswires
October 15, 2024 06:01 ET (10:01 GMT)
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