Bellway Shares Rise 5% On Solid Trading Numbers, £150m Share Buyback

Core Viewpoint - Bellway reported strong trading numbers that matched forecasts, leading to a rise in share price and the announcement of a £150 million share buyback program [2][4]. Financial Performance - Revenues increased by 16.9% year-on-year to £2.8 billion, with completions rising 14.3% to 8,749 units [2] - Operating profit margin improved by 90 basis points to 10.9%, resulting in a 27.5% increase in operating profit to £303.5 million [3] - Pre-tax profit on an underlying basis rose by 27.9% to £289.1 million [4] - The full-year dividend was raised to 70p per share from 54p per share [4]. Market Conditions - The private reservation rate slowed in the latter months of the year, with a rate of 0.57 compared to 0.51 in financial 2024 [3] - The start of financial 2026 has been affected by weak consumer sentiment and affordability constraints, with the net private rate dropping to 0.51 from 0.6 in the previous year [5]. Future Outlook - Bellway expects to increase total completions to 9,200 homes this year, with an average asking price of £320,000 per unit [6]. - The forward order book as of October 5 consisted of 5,285 homes valued at £1.5 billion, an increase from 5,164 homes and £1.4 billion the previous year [7]. Management Commentary - The CEO highlighted the company's good performance, emphasizing double-digit growth in volume output and profits, and the importance of the share buyback program [8]. - The company is well-positioned to deliver high-quality new homes, supported by a strong balance sheet and a high-quality land bank [8]. Analyst Perspective - Analysts noted that while Bellway's performance metrics are strong, external market pressures such as affordability concerns and consumer confidence issues may hinder buyer demand [9].