Bellway PLC on Tuesday announced a £150 million share buyback as it called for supportive government policy to drive a meaningful and sustained increase in housing output.
In response, shares in the Newcastle upon Tyne-based housebuilder advanced 5.2% to 2,607.15 pence each in London on Tuesday morning.
Bellway noted it faces some ‘near-term market challenges’, and said the government needs to drive through planning reform and address affordability constraints facing first-time buyers.
‘Customer demand has been affected by ongoing affordability constraints and uncertainties about potential taxation changes in the government’s budget in November,’ the firm added.
The FTSE 250-listing said pretax profit rose 21% to £221.9 million in the financial year to July 31
from £183.7 million the year prior, as revenue climbed 17% to £2.78 billion from £2.38 billion.
Underlying operating profit increased by 28% to £303.5 million from £238.1 million the year prior, and the underlying operating margin was in line with expectations at 10.9%, up from 10.0%.
Housing completions grew 14% to 8,749 homes from 7,654 a year ago, at an average selling price of £316,412, up 2.8% from £307,909 year-on-year.
The private reservation rate per outlet per week, including bulk sales, of 0.57 was 12% higher than the prior year at 0.51.
While the private reservation rate improved in the second half of the financial year to 0.62 compared to 0.51 in the first half, a ‘solid period of demand through the spring was followed by softer trading in the final quarter,’ Bellway said.
In addition, Bellway cautioned that since the start of the new financial year there has been a ‘continuation of weak consumer sentiment’ which has carried from late spring.
In the ten weeks since August 1, the private reservation rate per outlet per week excluding bulk sales was 0.48, down from 0.49 year-on-year.
Bellway expect financial 2026 average selling price to be around £320,000, would be growth of 1.1%, and an underlying operating margin to be similar to financial 2025 at around 11.0%.
Bellway traded from an average of 246 outlets, little changed year-on-year, in line with its expectations, with a closing position of 249 outlets at July 31 compared to 250 a year ago.
The land bank increased to 47,800 plots from 45,500 plots a year ago, which Bellway said ‘underpins our longer-term growth ambitions for a relatively low initial capital outlay.’
The firm raised its final dividend by 29% to 49.0 pence per share from 38.0p, meaning a total dividend of 70.0p, up 30% from 54.0p.
Bellway also announced the start of an initial tranche of £75 million of a £150 million share buyback programme.
Chief Executive Jason Honeyman said: ‘While we face some near-term market challenges, we have a high-quality land bank, strong balance sheet and the operational capacity to capitalise on the positive long-term fundamentals of our industry.’
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