Source: Sharecast
“The outlook beyond the current financial year remains uncertain, reflecting ongoing geopolitical tensions in the Middle East and a less predictable domestic political environment,” the company said in a trading update on Tuesday.
Bellway still expects annual underlying operating profit within a range of £320m - £330m.
“Trading in the early part of the spring selling season showed a marked improvement compared to autumn 2025, however we have seen a moderation in customer demand in April and May in response to the recent rise in mortgage rates,” the company added.
“There is renewed upward pressure on building material costs stemming from higher fuel and energy input costs, and we are seeing increased prices and the introduction of surcharges by certain supply chain partners.”
Current reservation rates were still generally above first half levels, with incentive usage averaging around 5%.
Richard Hunter, head of markets at Interactive Investor, said: "A less predictable domestic political environment is an additionally unwelcome development, leading to the group turning inwards to maintain progress with a sharp focus on costs and the monetisation of its strategic land bank, which currently stands at around 47000 plots."
"The careful financial management of its assets leaves Bellway in decent shape. This has enabled the continuation of a £150 million share buyback programme, while a hike to the dividend in March leads to a reasonably punchy yield of 4.1% which is adequately covered, even if the level of the dividend remains below historic levels given a severe cut to the payment two years ago from 140p to 54p."
"While there might not be a great deal here for the bulls to feed on, it will be recognised that Bellway is adjusting its model to react to challenging circumstances."
"That being said, and despite its measured progress, the share price tells the story for Bellway. The shares have declined by 34% over the last year, as compared to a gain of 8% for the wider FTSE250, while the price is 56% lower than its pre-pandemic peak in February 2020, which underlines the scale of the revival needed for the group to regain its former glories. Even so, the company has picked up many admirers along the way and the market consensus of the shares as a buy reflects optimism that there may be brighter times ahead.”
Reporting by Frank Prenesti for Sharecast.com
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