Bellway (LSE:BWY) told investors it grew total housing completions by 10.8% to 9,695 homes in the year to 31 July, beating its previously guided range of 9,300 to 9,500 homes.
The housebuilder said the outperformance was driven primarily by strong conversion from its bulk sales pipeline, with housing revenue up over 13% to £3.14bn and underlying operating profit expected at around £320m, against £303.5m a year earlier.
"Bellway has delivered a robust performance and growth in volume output, despite ongoing headwinds for our industry", said chief executive Jason Honeyman, who called on the Government to cut Stamp Duty and back a deposit support scheme for first-time buyers.
Adjusted operating margin is expected to slip to around 10%, from 10.9%, reflecting a higher proportion of lower-margin bulk sales, while the private reservation rate excluding bulk sales fell to 0.49 per outlet per week from 0.52.
The forward order book reduced to 4,206 homes worth £1,197.2m, down from 5,307 homes worth £1,519.4m, as higher completions and softer reservations reduced the pipeline.
Bellway ended the year with net cash of £157.7m, reversing net debt of £41.8m a year earlier, and adjusted gearing fell below 5% from 8.3%, as adjusted operating cashflow rose to over £850m, ahead of its £750m-£800m guided range.
The company's £150m share buyback is expected to complete this month, after which it will launch a further £50m buyback as the first tranche of anticipated FY27 shareholder returns.
Bellway will announce total FY27 shareholder returns alongside full-year results on 13 October, when it will also provide FY27 guidance.
News Intelligence what this means for the company
Bellway beat its own completion guidance by 195 homes (10.8% above the top of its 9,300–9,500 range) and swung from net debt of £41.8m to net cash of £157.7m, while operating cashflow exceeded guidance at over £850m versus a £750m–£800m target. The outperformance was driven by strong conversion from bulk sales, though this mix shift compressed adjusted operating margin to 10% from 10.9%, and the forward order book fell 21% in unit count to 4,206 homes as higher completions and softer private reservations (0.49 per outlet per week, down from 0.52) depleted the pipeline.
The beat on volume and cash generation is material—net cash of £157.7m and gearing below 5% provide balance-sheet flexibility—but the 21% decline in forward order book and falling private reservation rates signal demand softness ahead. The company is now returning capital (£50m buyback announced) while guiding to lower margins, suggesting management sees near-term headroom but is cautious on the pipeline.
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Strong completions, but this broker is cautious
Mark Crouch, analyst at etoro, noted that Bellway ended the year with strong completions and £158m of net cash but that the foundations for the year ahead look less certain.
The analyst flagged higher mortgage rates, slipping reservation rates, a sharply reduced forward order book and greater use of lower-margin bulk sales as the key headwinds to sustaining this momentum. He notes the balance sheet can absorb a softer market and supports another £50m of buybacks, while stressing that sustained profitability depends on mortgage cost relief and returning buyer demand.
In London, Bellway shares were up 0.5% changing hands at 2,110p.
