Bellway plc (LON:BWY) has issued a trading update in respect of the period from 1 February to 1 June 2025.
Highlights
- Robust trading through the spring selling season, with an increase in customer confidence and reservation rates compared to the first half of the financial year.
- The private reservation rate per outlet per week, excluding bulk sales, of 0.61 was in line with the prior year equivalent (2024 – 0.61). The private reservation rate including bulk sales increased by 8.1% to 0.67 (2024 – 0.62).
- The forward order book increased by 7.7% and comprised 5,759 homes at 1 June 2025 (2 June 2024 – 5,346 homes).
- Reflecting the strength of our land bank and drive for capital efficiency, we have continued with a disciplined approach to land acquisition and contracted to purchase 6,759 plots since 1 August 2024 (1 August 2023 to 2 June 2024 – 3,906 plots).
- Volume output in financial year 2025 is now expected to be between 8,600 and 8,700 homes (31 July 2024 – 7,654 homes) and we continue to expect the underlying operating margin to approach 11.0%3 (31 July 2024 – 10.0%).
- The overall average selling price is now anticipated to be around £315,000 (31 July 2024 – £307,909). The increase from the previous guidance of around £310,000 is mainly due to changes in product mix.
- The Group is now fully sold for the current financial year and if market conditions remain stable, Bellway remains well-positioned to deliver cumulative volume growth of 20% in the two years to 31 July 2026.
- Bellway remains focused on increasing return on capital employed and running a more efficient balance sheet. An update on our capital allocation plans will be provided later this calendar year.
Jason Honeyman, Group Chief Executive, commented:
“Bellway has delivered a solid trading performance, and we are on track to deliver strong growth in volume output and profits in the full financial year. We have a healthy forward order book and outlet opening programme, which will serve as a platform for further growth in FY26.
I remain confident that, supported by the Group’s operational strengths, land bank depth and an increased focus on cash generation and capital efficiency, Bellway can capitalise on the positive fundamentals of our industry and deliver volume growth, improved returns and ongoing value creation for shareholders.”
Market and current trading
Trading through the spring selling season has been robust, with good levels of customer demand and improved affordability supporting a sustained increase in private reservations compared to the first half of the financial year. Overall, headline pricing and the level of targeted incentives have remained stable across our regions and build cost inflation was in the low single digits through the period.
The private reservation rate increased by 5.9% to an average of 161 per week (2024 – 152), with solid trading enhanced by a modest increase in bulk sales. The private reservation rate per outlet per week increased by 8.1% to 0.67 (2024 – 0.62). This included a contribution of 0.06 from bulk sales (2024 – 0.01) and the private reservation rate per outlet per week, excluding bulk sales, of 0.61 was in line with the prior year equivalent (2024 – 0.61). The overall reservation rate, including social homes, rose by 2.1% to 196 per week (2024 – 192) and the cancellation rate remains low at 11% (2024 – 11%).
The Group traded from an average of 242 outlets in the period (2024 – 245), and we continue to expect to operate from an average of around 245 outlets for the full financial year (31 July 2024 – 245).
The forward order book increased by 7.7% and comprised 5,759 homes at 1 June 2025 (2 June 2024 – 5,346 homes) with a value of £1,650m4 (2 June 2024 – £1,446m). Given prevailing reservation rates and the anticipated profile of completions in the coming months, we continue to expect a year-on-year increase in the forward order book at 31 July 2025, which will serve as a platform for further volume growth in FY26.
Land investment
The strength and depth of the Group’s land bank has enabled an ongoing disciplined approach to land acquisition. The Group has contracted to purchase 6,759 plots since 1 August 2024 (1 August 2023 to 2 June 2024 – 3,906 plots) across 42 sites (1 August 2023 to 2 June 2024 – 21 sites) with a total contract value of £495m (1 August 2023 to 2 June 2024 – £277m).
In addition, our strategic land bank has been further strengthened to support our longer-term growth ambitions, with the Group entering into option agreements to buy 17 sites (1 August 2023 to 2 June 2024 – 15 sites).
Financial position and dividend
The Group has a well-capitalised balance sheet with modest net debt of £73m5 at 1 June 2025 (2024 – £57m). We remain focused on preserving balance sheet strength and expect to end the current financial year maintaining a low level of adjusted gearing6 (31 July 2024 – 6.8%).
As announced at the Interim Results on 25 March 2025, the interim dividend was increased to 21.0p per share (2024 – 16.0p) and will be paid on 1 July 2025. The Board continues to expect underlying dividend cover for the full financial year will be around 2.5 times7.
Outlook
We have been encouraged by the good levels of customer demand in the period and the Group is fully sold for the current financial year. Volume output is now expected to be between 8,600 and 8,700 homes (31 July 2024 – 7,654 homes) and, in line with previous guidance, the underlying operating margin is expected to approach 11.0%3 (31 July 2024 – 10.0%).
The overall average selling price is now expected to be around £315,000 (31 July 2024 – £307,909). The increase from our previous guidance of around £310,000 is mainly due to changes in product mix, including a contribution from some relatively high value private completions in the final quarter of the current financial year.
Bellway has a strong outlet opening programme and a healthy forward order book and work-in-progress position and, if market conditions remain stable, we are well-positioned to deliver cumulative volume growth of 20% in the two years to 31 July 2026. The Board is confident that, given the strength of the Group’s land bank and balance sheet, Bellway is in a strong position to deliver continued volume growth into the longer term.
As outlined at our Interim Results in March, Bellway is focused on increasing return on capital employed and running a more efficient balance sheet. Our reaffirmed approach to driving greater cash generation and capital efficiency alongside growing volume leaves us well-placed to deliver multi-year growth in both asset turn and margin to deliver a sustained recovery in returns and ongoing value creation for shareholders. We look forward to providing a fuller update on our capital allocation plans later in the calendar year.
The Group’s next scheduled trading update, covering the financial year ending 31 July 2025, is on 12 August 2025.
Notes:
1 All figures relating to completions, forward order book, reservations, cancellations, and average selling price exclude the Group’s share of its joint ventures.
2 Comparatives are for the period from 1 February to 2 June 2024 or as at 2 June 2024 (‘2024’) unless otherwise stated.
3 Underlying operating margin is operating profit before net legacy building safety expense and exceptional items divided by total revenue.
4 Forward order book is the total expected sales value of reservations that have not legally completed.
5 Net (debt)/cash is cash plus cash equivalents, less debt financing.
6 Adjusted gearing is the total of net (debt)/cash and land creditors divided by total equity.
7 Underlying dividend cover is underlying profit for the period per ordinary share divided by the dividend per ordinary share relating to that period.
