Bellway (BWY) Trading Update summary

Trading performance and market conditions

• Spring selling season saw stronger trading, with improved affordability boosting customer confidence and reservation rates, up 6.9% year-on-year to 0.62 per outlet per week.

• Headline pricing remained firm, with targeted incentives; cancellation rates normalized to 11% from 15% last year.

• Forward order book increased to 5,346 homes valued at £1,446 million, up from 4,411 at the start of the year.

• Group is fully sold for the current financial year, with a strong outlet opening program supporting a return to growth in FY2025.

Financial guidance and outlook

• On track to deliver around 7,500 home completions for the year, down from 10,945 last year, with an expected operating margin reduction of at least 600 basis points from 16.0%.

• Average selling price now anticipated at £305,000, revised up from £295,000 due to product mix.

• Net debt stood at £57 million as of 2 June 2024, with expectations to end the year with low adjusted gearing.

• Interim dividend of 16.0p per share to be paid on 1 July 2024; full-year dividend cover expected around 2.5 times.

• Board remains confident in long-term growth, supported by a robust land bank and balance sheet.

Land investment and operational updates

• Ongoing disciplined land acquisition, with 15 new option agreements since August 2023 and 3,906 plots contracted across 21 sites.

• Heads of Terms agreed on about 5,700 plots as of 2 June 2024, rebuilding the future pipeline.

• Over 40 new selling outlets expected to open in the second half of the year, despite planning delays.

• Good availability of materials and subcontractors, with limited cost inflation on new tenders.

• Board notes potential short-term trading impact from political campaigning but sees positive long-term housing fundamentals.