Bellway: Guides to Slower Trading Conditions; Shares Remain Cheap

Investors were underwhelmed by Bellway’s February 2025 trading update, sending its shares down some 6% in early trade. Bellway updated the market on its first-half trading performance with home completions rising a healthy 12% year on year to 4,577 homes. Homebuyer appetite continues to improve as evidenced by the weekly private reservation rate rising some 19% to 0.51 per sales outlet during the first half. Nonetheless, Bellway shares softened in response to the somewhat softer second half of fiscal 2025, which Bellway now anticipates. Indeed, trading conditions during the second-half of fiscal 2025 are shaping up to be somewhat more challenging than we’d previously anticipated, with the recent softening of UK house prices and modest rises in UK mortgage rates a possible near-term headwind. Consequently, we lower our full-year volume forecast by 6% to 8,500 homes—aligning with the lower bound of Bellway’s volume guidance for fiscal 2025, which implies softer home deliveries sequentially in the second half. In accordance, we lower our full-year EBIT forecast by 6% to GBP 284 million. We anticipate greater detail when Bellway reports its fiscal first-half 2025 results in full on March 25.