Bellway said Tuesday it expects home sales to ease in the current fiscal year as higher borrowing costs and a choppy economy weigh on demand while planning delays restrict supply. The company also set its next big build target: 9,000 to 9,400 completions for the period ending July 2027, versus 9,695 in the prior 12 months. Pricing guidance stayed steady, with the typical home in the current financial year seen at about £325,000 ($430,000).
For the year to July, underlying operating profit increased 5.6%, which the company said matched analyst expectations. The underlying operating margin was 10.1%. Statutory pretax profit came in at £270.2 million and missed forecasts. Bellway announced a £150 million share repurchase for this fiscal year and indicated that, over the next 24 months, combined dividends and other cash distributions to investors will total £450 million.
Across the sector, builders are juggling rising input costs, pressure on achieved prices and mortgage rates that remain elevated, with inflation concerns tied to the conflict in the Middle East in the mix. Meanwhile, escalating material and labor expenses, together with modifications to planning and safety regulations, have slowed development.
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"The near-term outlook remains uncertain, with economic challenges, mortgage affordability and delays in planning continuing to constrain housing delivery," Chairman John Tutte said. "Our strategic priorities remain focused on delivering sustainable volume growth over time."
"There's been no doubt that the conflict has been very challenging," said Chief Financial Officer Shane Doherty in a phone interview. "Obviously from a supply chain perspective, I think we've done a really good job managing cost increases there," he said, adding that interest rates around 6% have curtailed demand among first-time buyers.
Jason Honeyman, the Chief Executive Officer, praised the government's "Your First Home" initiative, which is designed to help first-time buyers through a new loan program. "The UK continues to face a substantial shortage of new homes, while affordability remains a major barrier for many prospective buyers," he said. "Bellway has the financial strength, operational capability and land bank to respond as market conditions improve."
Bellway's shares advanced by as much as 3.9% at the open in London before paring gains. The signal for investors: softer near-term sales, a lower completion target for the year to July 2027, flat pricing around £325,000, and a fresh buyback that helps take total returns to £450 million over two years. If borrowing costs ease or first-time buyer support gains traction, volumes have room to mend from today's levels.
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