Bellway PLC BWY

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GBX 2,496.00 +8.00 (0.32%)

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As of Apr 25, 2024 4:15pm Delayed Price Closed

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Company Report

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Bellway Earnings: Improving Sales Rate Instills Confidence

Grant Slade Mar 26, 2024

Bellway’s first-half fiscal 2024 result provided us with little surprise. Bellway confirmed the delivery of 4,092 homes and EBIT of GBP 139.9 million in the first half, as announced by the no-moat homebuilder in early February 2024. Bellway remains on track to deliver against its guidance for 7,500 home completions in fiscal 2024. Consequently, our fiscal 2024 estimates and our GBX 3,750 fair value estimate are unchanged. Encouragingly, Bellway reported further improvement in the recent sales activity, with the homebuilder’s weekly private reservation rate rising to 0.67 per active sales outlet in the six weeks since Feb. 1, up from 0.56 in the prior corresponding period and 0.59 in January 2024.

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Price vs Fair Value

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BWY is trading at a 34% discount.

Price

GBX 2,480.00

Apr 22, 2024

Fair Value

GBX 6,118.00

Feb 9, 2023

Uncertainty

High

1-Star Price: GBX 6,465.50
5-Star Price: GBX 5,526.00
Economic Moat: Cfz
Capital Allocation: Mmcqcpbww

Bulls Say, Bears Say

Bulls

Underlying housing demand is likely to benefit from the U.K.’s changing demographics. The ongoing ageing of the population is likely to support demand for new housing over the coming decade as the U.K.'s average household size declines.

Bears

Profit margin recovery is likely to be gradual, owing to soft medium-term house price growth expectations and upcoming incremental built costs for Future Homes Standard compliance.

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Trading Information

Previous Close Price: GBX 2,488.00
Day Range: GBX 2,478.00–2,526.00
52-Week Range: GBX 1,903.00–2,898.00
Bid/Ask: GBX 2,300.00 / GBX 2,850.00
Market Cap: GBX 296.14 Bil
Volume/Avg: 516,014 / 411,167

Key Statistics

Price/Earnings (Normalized): 11.35
Price/Sales: 1.05
Dividend Yield (Trailing): 5.54%
Dividend Yield (Forward): 5.54%
Total Yield: 8.90%

Company Profile

Bellway is the U.K.’s fourth-largest residential property developer in terms of both revenue and dwelling completions. Bellway’s vertical integration through the land development, construction, and sales and marketing segments of the residential property development value chain aligns with the typical business model employed by homebuilders in the U.K. market.

Sector: Consumer Cyclical
Industry: Residential Construction
Stock Style Box: Mid Value
Total Number of Employees: 3,130
Website: https://www.bellwayplc.co.uk

Competitors

Valuation

Metric	BWY	BKG	TW.
Price/Earnings (Normalized)	11.35	11.15	13.00
Price/Book Value	0.86	1.44	1.03
Price/Sales	1.05	1.97	1.32
Price/Cash Flow	11.90	13.34	13.52

Price/Earnings

BWY

BKG

TW.

Financial Strength

Metric	BWY	BKG	TW.
Quick Ratio	0.33	0.64	0.79
Current Ratio	5.78	3.57	5.37
Interest Coverage	8.81	23.08	18.49

Quick Ratio

BWY

BKG

TW.

Profitability

Metric	BWY	BKG	TW.
Return on Assets (Normalized)	5.22%	6.78%	5.48%
Return on Equity (Normalized)	7.58%	13.98%	7.74%
Return on Invested Capital (Normalized)	7.82%	11.33%	7.47%

Return on Assets

BWY

BKG

TW.

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