Bellway said its housing completions and average selling prices for the first half of fiscal 2025 rose as it backed its guidance. The housebuilder also reported a strong forward order book with a value of 1.31 billion pounds, and said that it expected volumes of at least 8,500 homes for the fiscal year at an average selling price of 310,000 pounds ($383,408), up from 307,909 pounds last year.
Here's a selection of analysts' comments:
Bellway Starting to Recover But Still Long Way to Go
0823 GMT - U.K. housebuilder Bellway appears to be in the early stages of a recovery, Quilter Cheviot analyst Oli Creasey says in a note. Although its house prices rose around 0.5%, this is a little behind some peers including Persimmon which reported 5% growth, Creasey says. Bellway expects operating margins to improve modestly to 11% from 10%. Though positive, it represents the scale of the challenge the company and other housebuilders face, Creasey says. Its operating margin in 2022 was around 18% so there is still a long way to go before it, or the industry, fully recovers, he says. "The mortgage market and wider economic conditions continue to have an impact on customer demand and are likely to be a headwind for Bellway for some time yet," he says. (anthony.orunagoriainoff@dowjones.com)
Bellway's Strong Order Book Supports Guidance
0825 GMT - Bellway is on track to deliver on full-year guidance at the halfway mark but this robust performance is at odds with its subdued share price performance, RBC Capital Markets analyst Anthony Codling says in a note. The underlying housing market appears to be stronger than what investors think it is, Codling says. Despite a rise in mortgage rates, customer demand and pricing remained firm. The forward order book's value of 1.31 billion pounds is 30% above 2024's levels, and implies a forward order book average sale price that is 9% higher year-on-year, he says. Shares are down 6.3% at 2,402 pence and are down 3.6% in the year to date. (anthony.orunagoriainoff@dowjones.com)
Bellway's Demand Levels Improving Despite Mortgage Sensitivity
0933 GMT - Bellway is experiencing a pickup in the spring selling season after a subdued autumn, with the order book 30% ahead of a year ago, Peel Hunt analysts Sam Cullen and Clyde Lewis say in a note. The U.K. housebuilder is experiencing an encouraging improvement in demand levels despite consumers remaining sensitive to mortgage rates, the analysts say. The company expects to deliver at least 8,500 homes this year, with an average selling price of 310,000 pounds and underlying margins of 11%. This implies an underlying operating profit of around 290 million pounds which is 2% to 3% above Peel Hunt's forecasts. "Sustained improvements in affordability should help to drive demand forward, while outlets are beginning to return to net growth," the analysts say. Shares are down 5.5% at 2,422 pence. (anthony.orunagoriainoff@dowjones.com)
Bellway's Orderbook Underpins Expectations
0956 GMT - Bellway enters the second half with a strong orderbook propping up end-of-year volume expectations of at least 8,500 homes, Goodbody analyst Shane Carberry says in a note. The company's first-half performance was strong despite challenging market conditions. Although management is encouraged by the seasonal pick-up in customer enquiries and reservation rates in the early weeks of the spring season, it remains mindful of mortgage affordability, Carberry says. Goodbody sees underlying operating profit of 289 million pounds being in line with consensus of 291 million pounds, he says. "Numbers now look well underpinned given the strong volume delivery in 1H and the strength of the orderbook...into 2H," Carberry says. Shares are down 5.2% at 2,430 pence. (anthony.orunagoriainoff@dowjones.com)
Bellway Shares Don't Reflect Upside Potential
1010 GMT - Bellway's strong order book shows it is well-positioned to capture any upside in demand, Jefferies analysts say in a note. This despite the U.K. housebuilder's currently cautious outlook for FY 2026, which forecasts volume growth, no change in selling rates, and management comfortable at completions of 9,200 units, Jefferies says. "We see the Bellway share price as yet to reflect the upside potential from market improvement, reset of margin from new land intake, and/or potential government policy, either relaxation of mortgage lending or demand-side stimulus," Jefferies says. Shares are down 4.9% at 2,438 pence. (anthony.orunagoriainoff@dowjones.com)
(END) Dow Jones Newswires
February 11, 2025 05:41 ET (10:41 GMT)
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