Proactiveinvestors United Kingdom Bellway PLC https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Bellway PLC RSS feed en Sun, 16 Jun 2019 21:39:48 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Bellway on course to meet expectations despite some margin pressure ]]> https://www.proactiveinvestors.co.uk/companies/news/221860/bellway-on-course-to-meet-expectations-despite-some-margin-pressure-221860.html Bellway PLC (LON:BWY), the company that built the flats in Barking that caught fire over the weekend, has seen a dip in its order book.

The housebuilder said the value of its forward order book had fallen to £1.64bn from £1.70bn in June of last year, reflecting the company’s planned growth in so-called “social housing” completions this year. Social housing offers a lower margin to the housebuilder.

A barbecue on a balcony could have caused a block of flats to be engulfed by fire, according to its builders, Bellway Homes. Twenty flats with wooden balconies were destroyed and 10 more damaged in Sunday's fire in Barking, East London. https://t.co/D7IG6fDe8h #fireinvestigation

— IFIC (@IFICForensics) June 11, 2019

The forward order book as at 2 June had risen by 2.7% to 6,312 homes (3 June 2018 – 6,144 homes), with 68% of these plots contracted.

The sales position giave the group confidence that Bellway is well placed its expectations with regards to earnings growth in the current financial year.

The period from the beginning of February to the start of June saw a 4.7% year-on-year increase in the reservation rate to 244 per week from 233 per week the year before.

The company said house prices generally remain firm but are not rising as rapidly as previous years, while at the same time cost increases continue to be experienced throughout the broader construction sector.

Bellway said its cost base remains well controlled and this has helped to mitigate some of the pressure on the gross margin.

“Customer confidence is resilient and despite the ongoing political uncertainty, the cancellation rate since 1 August has moderated to 12% (2018 – 11%), a reduction from the 13% reported in March at the interim results,” the company said.

In the wake of the fire in Barking, East London, the second bullet point in the company’s trading update noted that the company had retained its status as a five-star home builder.

When we in the Barking Reach Residents' Association asked Bellway to come to the estate just one month ago, after BBC Watchdog exposed failings in its construction, Bellway refused... https://t.co/RmgOvbYE3G @HAWRNet #barkingfire #BarkingRiverside #firesafety

— Paul Kershaw (@1917paul) June 10, 2019

The shares were down 0.3% at 2,818p in a rising market.

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Tue, 11 Jun 2019 08:43:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221860/bellway-on-course-to-meet-expectations-despite-some-margin-pressure-221860.html
<![CDATA[RNS press release - BELLWAY PLC - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201906110200PR_NEWS_UKDISCLO_0009/ Tue, 11 Jun 2019 07:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201906110200PR_NEWS_UKDISCLO_0009/ <![CDATA[RNS press release - BELLWAY PLC - Blocklisting - Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201906030655PR_NEWS_UKDISCLO_0079/ Mon, 03 Jun 2019 11:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201906030655PR_NEWS_UKDISCLO_0079/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201906030545PR_NEWS_UKDISCLO_0059/ Mon, 03 Jun 2019 10:45:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201906030545PR_NEWS_UKDISCLO_0059/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights (Updated) ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201905010934PR_NEWS_UKDISCLO_0106/ Wed, 01 May 2019 14:34:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201905010934PR_NEWS_UKDISCLO_0106/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201905010521PR_NEWS_UKDISCLO_0057/ Wed, 01 May 2019 10:21:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201905010521PR_NEWS_UKDISCLO_0057/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201904010941PR_NEWS_UKDISCLO_0108/ Mon, 01 Apr 2019 14:41:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201904010941PR_NEWS_UKDISCLO_0108/ <![CDATA[RNS press release - BELLWAY PLC - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201903271111PR_NEWS_UKDISCLO_0084/ Wed, 27 Mar 2019 15:11:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201903271111PR_NEWS_UKDISCLO_0084/ <![CDATA[News - Absence of provisions makes Bellway stand out from rival UK housebuliders ]]> https://www.proactiveinvestors.co.uk/companies/news/217339/absence-of-provisions-makes-bellway-stand-out-from-rival-uk-housebuliders-217339.html The absence of provisions in Bellway PLC’s (LON:BWY) first-half results has made the housebuilder stand out from rivals who have set aside money to deal with faults in homes.

Bellway said its margins were squeezed by cost inflation and a softening house market in the six months to January 31 but it still delivered an 8.7% rise in pre-tax profit to £313.9mln as revenue rose 12.4% to £1.5bn.

READ: Bellway lifts dividend as profits rise despite Brexit uncertainty and cost pressures

Dig a little deeper and there is one thing missing from the results – provisions.

Persimmon and Bovis Homes take hit over poorly built homes

Persimmon PLC (LON:PSN), on the other hand, took an impairment provision of £37.8mln in its 2018 results as it deals with complaints about the quality of homes and leasehold charges attached to new properties.

The housebuilder’s bill for dealing with complaints looks set to rise after launching a customer care improvement plan, which involves allowing a buyer’s solicitor to withhold 1.5% of the total value of a home until any faults identified at the time of release are resolved.

READ: Persimmon to let customers withhold 1.5% of house prices until housebuilder resolves faults

Bovis Homes Group PLC (LON:BVS) seems to have recovered from a botched homes scandal, which hit profits in 2016 and 2017 after setting aside money for customers affected by poor quality properties. 

READ: Bovis Homes sees good demand in 2019

Profits in 2018 jumped nearly 50% to a record £168.1mln as it focused on improving build quality.

However, it still took a provision of £4.8bn for the year without elaborating on what the money was for. 

Housebuilders set aside provisions to remove Grenfell Tower-style cladding

Barratt Developments PLC (LON:BDEV) said in its half-year results in February that it put aside money for work undertaken to remove and replace flammable cladding in buildings after similar materials were blamed for the Grenfell Tower fire tragedy last year.

A fire at the Grenfell Tower in West London claimed the lives of 72 people in June 2017. The rapid spread of the blaze was attributed to the use of combustible panels wrapped around the building.

Barratt agreed to pay £2mln to remove Grenfell Tower-style cladding at a building in Croydon in 2018 and in February said it had undertaken a review of all of its current and legacy buildings where it has used flammable materials.  

READ: Barratt Developments to pay special dividends in 2019 and 2020 as first-half profit jumps

“While we are satisfied that we currently have no liability in respect of cladding, we have made a provision for the work we have undertaken to carry out to remove and replace cladding in line with our commitment to put our customers first,” it said.

Crest Nicholson Holdings PLC (LON:CRST) said in 2018 results that it had also made fresh provisions to mitigate the fire risks in tall buildings.

READ: Crest Nicholson surges as it nabs Galliford Try's chief executive officer

The housebuilder has reviewed materials used in insulation and external facades, particularly for buildings over 18 metres high.

While it did not specify the amount set aside for dealing with fire hazards, it had £2.6mln in provisions last year.

Taylor Wimpey ground rents scandal 

Taylor Wimpey PLC (LON:TW. has bookmarked £30mln to replace flammable cladding on some of its developments, which brought total provisions to £170.3mln in 2018. 

The group has also paid out £25.5mln of the £130mln set aside in 2017 to settle a ground rents scandal, in which thousands of homebuyers were trapped in contracts with spiralling ground rents.

READ: Taylor Wimpey off to a "positive start" in 2019

Freeholders are being paid to move leaseholders with a 10-year doubling lease to an RPI-based structure. About half of homeowners will be switched to less onerous ground rent terms.

Lastly, Berkeley Group Holdings PLC (LON:BKG) took a £82.7mln provision in the first half related to “post competition development obligations”.

READ: Berkeley Group leaves guidance unchanged but is "mindful" of potential for disruption from political back-drop ]]>
Wed, 27 Mar 2019 13:13:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217339/absence-of-provisions-makes-bellway-stand-out-from-rival-uk-housebuliders-217339.html
<![CDATA[News - Bellway lifts dividend as profits rise despite Brexit uncertainty and cost pressures ]]> https://www.proactiveinvestors.co.uk/companies/news/217296/bellway-lifts-dividend-as-profits-rise-despite-brexit-uncertainty-and-cost-pressures-217296.html Bellway PLC (LON:BWY) lifted its interim dividend by 5.0% as low-interest rates, the government’s Help to Buy scheme and demand for affordable housing boosted profits.

The housebuilder said pre-tax profit increased 8.7% to £313.8mln and revenue rose 12.4% to £1.5bn in the first half ended January 31.

The company completed 5,007 homes in the period, up 5.6% on a year ago, and average selling prices gained 6.4% to £293,832.

READ: Bellway hails record first-half sales despite a rise in cancellation rates

However, the operating margin fell by 70 basis points to 21.5% with Bellway blaming rising cost pressures and the “reducing benefit of historical house price inflation” amid a slowdown in the market. 

Bellway expects the operating margin to remain at this level for the full year after which there is likely to be “gradual moderation” following year.

Bellway addresses weaker margins 

To mitigate cost pressures, the group said its new standard house type, Artisan, should result in design, engineering and procurement savings. A new accounting and valuation system will also be used to secure further savings through improved analysis, benchmarking and purchasing power.

With Brexit looming, Bellway said it is taking a more "cautious approach" to land buying and has temporarily slowed the rate of investment on a number of sites until there is more clarity over the outcome of the UK’s departure from the European Union.

In the meantime, conditions in the UK housing market remain positive with demand for affordable homes, high employment, good access to affordable mortgage finance and Help to Buy.

"These favourable market parameters, together with Bellway's disciplined investment in new sales outlets, led to a 2.8% increase in total reservations, net of cancellations, to 183 per week (2018 - 178 per week), the highest ever achieved by the group in a first-half trading period," said chief executive Jason Honeyman.

Bellway raised its dividend to 50.4p per share from 48.0p.

The group cut its net debt to £26.6mln from £131.4mln and expects to end the financial year with a positive net cash balance in excess of £150mln.

“While the forthcoming exit from the EU provides a degree of economic uncertainty, this strong balance sheet ensures that Bellway retains its ability to expand further by responding positively to opportunities in the land market as they arise,” said Honeyman.

Bellway has started the new financial year with a forward order book of £1.5bn.

The company expects to build up to 500 additional new homes this year.

It predicts further growth in completions but said: "The extent of this will depend upon the outcome of the spring selling season".

Bellway one of our top picks in the sector, says Liberum 

Liberum analysts said: "The second half has started well, suggesting risks may now be to the upside of consensus expectations for the full year.

"Bellway has extended its volume growth track record to ten consecutive years, without compromising quality or stretching the balance sheet and management has reaffirmed its commitment to continue this strategy."

The broker maintained a 'buy' rating and target price fo 3,500p on the stock, saying it thinks the shares look "good value".

It added: "This is still one of our top picks in the sector as its proven ability to grow volumes trumps margin pressure in this environment."

Shares rose 1.17% to 3,035p in morning trading. 

 

 

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Wed, 27 Mar 2019 07:34:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217296/bellway-lifts-dividend-as-profits-rise-despite-brexit-uncertainty-and-cost-pressures-217296.html
<![CDATA[RNS press release - Interim results ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/LSE20190327070002_14016855/ Wed, 27 Mar 2019 07:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/LSE20190327070002_14016855/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201903010615PR_NEWS_UKDISCLO_0066/ Fri, 01 Mar 2019 11:15:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201903010615PR_NEWS_UKDISCLO_0066/ <![CDATA[RNS press release - BELLWAY PLC - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902271002PR_NEWS_UKDISCLO_0087/ Wed, 27 Feb 2019 15:02:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902271002PR_NEWS_UKDISCLO_0087/ <![CDATA[RNS press release - BELLWAY PLC - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902190607PR_NEWS_UKDISCLO_0034/ Tue, 19 Feb 2019 11:07:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902190607PR_NEWS_UKDISCLO_0034/ <![CDATA[RNS press release - BELLWAY PLC - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902070954PR_NEWS_UKDISCLO_0076/ Thu, 07 Feb 2019 14:54:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902070954PR_NEWS_UKDISCLO_0076/ <![CDATA[News - Bellway knocked to ‘add’ from ‘buy’ by Peel Hunt as share price bounce leaves less upside ]]> https://www.proactiveinvestors.co.uk/companies/news/214177/bellway-knocked-to-add-from-buy-by-peel-hunt-as-share-price-bounce-leaves-less-upside-214177.html Broker Peel Hunt has downgraded Bellway PLC (LON:BWY) to ‘add’ from ‘buy’, saying a bounce in the shares in the year to date left less upside than before.

The downgrade followed a record first half for the FTSE 250 housebuilder, who reported in a trading update on Thursday that total revenue for the period is expected to be up by more than 12% to just shy of £1.5bn from £1,324.4mln the year before.

READ: Bellway hails record first half sales despite a rise in cancellation rates

This was accompanied by a rise in the weekly reservation rate of 2.8% to 183 from 178 in the same period a year earlier, the highest level ever achieved by the group in the first half of its fiscal year.

“For the second half, the group is operating from a higher number of outlets and with a pick-up in demand in recent weeks,” said Peel Hunt analysts, adding that its pre-tax profit forecasts for the 2019 fiscal year now looked “achievable”.

The broker also retained its target price for Bellway at 2,945p.

In late-morning trading Thursday, Bellway shares were down 2% at 2,830p.

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Thu, 07 Feb 2019 11:51:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214177/bellway-knocked-to-add-from-buy-by-peel-hunt-as-share-price-bounce-leaves-less-upside-214177.html
<![CDATA[News - Bellway hails record first half sales despite a rise in cancellation rates ]]> https://www.proactiveinvestors.co.uk/companies/news/214154/bellway-hails-record-first-half-sales-despite-a-rise-in-cancellation-rates-214154.html If the UK housing market is in trouble no one appears to have told housebuilder Bellway PLC (LON:BWY), which is seeing sales at record levels.

In a trading update covering the six months to the end of January 2019, the FTSE 250 company said the weekly reservation rate rose by 2.8% to 183 from 178 in the same period a year earlier, the highest level ever achieved by the group in the first half of its fiscal year.

READ Bellway still bent on expanding the business

Total revenue for the period is expected to be up by more than 12% to just shy of £1.5bn from £1,324.4mln the year before.

The number of houses completed rose by 5% to 5,007 from 4,741 the year before while the average selling price rose by 6.5% to £293,800 from £275,945.

Bellway said the ongoing discussions around the UK’s forthcoming exit from the EU had “inevitably had some bearing on customer confidence in the wider economy” and this might be one reason why the cancellation rate had risen to 13% from 11% the previous year.

With the government’s “Help to Buy” scheme still acting as a catalyst, Bellway’s order book looks strong, with a value of £1,171.3 million (2018 – £1,297.4 million), comprising 4,587 units (2018 – 4,629 units).

The company said that volume output for the full fiscal year should exceed last year’s record of 10,307 homes.

“Early signs suggest that customer demand and reservations will follow their usual seasonal trend; however, the board remains cautious given the uncertainty regarding the UK’s forthcoming exit from the EU and the extent to which this will affect wider customer confidence,” Bellway said.

“Further, disciplined investment in high-quality land, together with a sizeable forward order book, ensure that the group is well placed, over the longer term, to continue increasing its contribution to the supply of much needed new homes,” said Paul Hampden Smith, the chairman of Bellway.

The shares opened 1.1% lower at 2,859p.

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Thu, 07 Feb 2019 08:14:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214154/bellway-hails-record-first-half-sales-despite-a-rise-in-cancellation-rates-214154.html
<![CDATA[RNS press release - BELLWAY PLC - Trading Statement ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902070200PR_NEWS_UKDISCLO_0006/ Thu, 07 Feb 2019 07:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902070200PR_NEWS_UKDISCLO_0006/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902010543PR_NEWS_UKDISCLO_0061/ Fri, 01 Feb 2019 10:43:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201902010543PR_NEWS_UKDISCLO_0061/ <![CDATA[RNS press release - BELLWAY PLC - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201901210756PR_NEWS_UKDISCLO_0072/ Mon, 21 Jan 2019 12:56:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201901210756PR_NEWS_UKDISCLO_0072/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201901020624PR_NEWS_UKDISCLO_0072/ Wed, 02 Jan 2019 11:24:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201901020624PR_NEWS_UKDISCLO_0072/ <![CDATA[RNS press release - BELLWAY PLC - Result of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201812120603PR_NEWS_UKDISCLO_0060/ Wed, 12 Dec 2018 11:03:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201812120603PR_NEWS_UKDISCLO_0060/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201812030452PR_NEWS_UKDISCLO_0044/ Mon, 03 Dec 2018 09:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201812030452PR_NEWS_UKDISCLO_0044/ <![CDATA[RNS press release - BELLWAY PLC - Blocklisting - Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201812030447PR_NEWS_UKDISCLO_0042/ Mon, 03 Dec 2018 09:47:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201812030447PR_NEWS_UKDISCLO_0042/ <![CDATA[RNS press release - BELLWAY PLC - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201811130949PR_NEWS_UKDISCLO_0104/ Tue, 13 Nov 2018 14:49:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201811130949PR_NEWS_UKDISCLO_0104/ <![CDATA[RNS press release - BELLWAY PLC - Annual Report 2017/18, AGM Notice and proxy form ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201811091044PR_NEWS_UKDISCLO_0088/ Fri, 09 Nov 2018 15:44:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201811091044PR_NEWS_UKDISCLO_0088/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201811010618PR_NEWS_UKDISCLO_0059/ Thu, 01 Nov 2018 10:18:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201811010618PR_NEWS_UKDISCLO_0059/ <![CDATA[RNS press release - BELLWAY PLC - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201810231004PR_NEWS_UKDISCLO_0088/ Tue, 23 Oct 2018 15:04:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201810231004PR_NEWS_UKDISCLO_0088/ <![CDATA[News - Bellway still bent on expanding the business ]]> https://www.proactiveinvestors.co.uk/companies/news/207164/bellway-still-bent-on-expanding-the-business-207164.html Bellway PLC (LON:BWY) is looking to increase the number of houses it builds, though it remains wary of a possible Brexit effect on consumer confidence.

As previously reported, the company built more than 10,000 houses for the first time in a financial year in the 12 months to the end of July, and as at the end of September, the order book had grown to £1.47bn, representing 5,380 homes, from £1.36bn a year earlier (5,034 homes).

READ: Bellway expects record annual earnings but warns on house price growth slowdown

The group said that while there is a risk to consumer confidence posed by the forthcoming exit from the EU, assuming that market conditions remain robust, it has a solid platform from which to further increase output in the year ahead.

In the first nine weeks of the new financial year, trading has remained solid, with the group achieving 176 reservations per week, up 2.9% from 171 reservations per week in the same period of 2017.

Revenue in the financial year just ended rose 15.6% to £2.96bn from £2.56bn the year before.

Profit before tax was up 14.3% at £641.1mln from £560.7mln the year before. The group has set aside a provision of £5.9mln to deal with any likely remedial costs that may be borne by Bellway in the wake of new building regulations introduced in the wake of the Grenfell Tower fire tragedy.

READ: Plan to fit Grenfell Tower with fire-resistant cladding was dropped amid pressure from Tory council to cut costs

Bellway said it has strengthened its processes and training relating to fire safety issues and will continue to develop these in the year ahead “as Government guidance no doubt evolves”.

In total, the owned and controlled land bank rose to 41,077 plots (2017 – 37,855 plots), representing a supply of 4.0 years (2017 – 3.9 years) based on last year's output.

The proposed full-year dividend has been hiked by 17.2% to 143p from 122p the year before. For the foreseeable future, the board expects to maintain a dividend cover of around three times earnings.

John Watson will be retiring as non-executive chairman at the annual general meeting on December 12, to be replaced by Paul Hampden Smith, who is currently the chairman of the audit committee.

“Bellway has reported underlying PBT [profit before tax] up 15%, about 1% ahead of consensus,” said Liberum Capital Markets.

“Its new year has started well with reservations up around 3%, a little down year on year on a per-site basis, with trading solid across the country and robust at its price points in London. Bellway has put the building blocks – land, sites and divisions – in place to grow volumes, but management notes the risks that Brexit poses to the key spring selling season,” the broker added.

“Profit growth was driven by 7% volume growth, a 9% rise in prices (mix) and a broadly flat operating margin (22.3% v 22.3%),” Liberum said.

“Management has not given volume growth guidance for 2019, noting that uncertainties around Brexit may impact the key spring selling season in the calendar year 2019. London trading is said to remain robust at its price points (ASP [average selling price] £376k ex Nine Elms),” Liberum noted.

Peel Hunt left its full-year forecasts unchanged and opined that with the shares having fallen 21% this year, they look oversold.

Based on Peel Hunt’s forecasts, the company’s market capitalisation is now just 1.14 times projected net asset value for the calendar year 2019, which is a 20% discount to the sector.

“As dynamics of reducing house price inflation and ongoing build cost pressures continue, the group has a renewed focus on cost control, including the introduction of a standard house type range. While the important spring selling season still lies ahead, the forward order book provides a good platform to meet our forecasts (comprising c7% revenue growth and a 60bps margin decline) and we leave our forecasts unchanged,” the broker said.

Shore Capital said there were no surprises in the results after a very comprehensive trading update on August 8.

Margins slipped by four-tenths of a percentage point – or 40 basis points (bps) – at the gross level and by 20 bps at the underlying earnings (EBIT) level, which was a little worse at the gross level than the broker had been expecting.

“We expect to see margins fall further in the current year and the comments on tightness in the supply chain suggest that this (is) the right assumption,” the broker said.

Return on capital employed (ROCE) also fell, albeit by only 20 bps, although the broker observed: “It has been rare to see a fall in ROCE in this sector”.

“Clearly Bellway still aims to expand its business even in to a less favourable market climate. There are still new divisional offices being added to the network and the board has again highlighted the operational capacity of the business to be 13,000 units per annum (10,307 last year).

Margins are likely to be tighter but we feel that Bellway is more willing than most to accept this and has been warning on the non-sustainability of current margins for at least the last two years,” Shore Capital said.

“We are not expecting a collapse in margins but we do see them fading over the next 2-3 years largely due to the lack of house price inflation, which can no longer cover the inflation in build costs. At this stage we still believe that expansion can just about offset weakening margins and PBT [profit before tax] is likely to be flat to slight[ly] ahead,” it added.

“As with other house builders Bellway has announced a cost reduction plan but the approach of standardising house types and, in effect, lowering specification is not well proven in this industry and savings driven this way have a nasty habit of flowing away. There appears to be no desire to move into investment in its own supply chain via creating off-site manufacturing which is disappointing; however, there is a positive development that we like here – the opening of a Partnerships business in London,” the broker continued.

Shore said its current rating is under review as the share price has fallen below its fair value estimate of 3,050p, while the company has also bowled a bit of a googly by the decision to move into partnerships and by implication the build-to-rent sector.

“We would need to be convinced that Bellway would be willing to expand this non-standard housing side before altering our view, we do feel that there is scope to at least be less cautious, even striking a more positive tone,” the broker said.

Shares in Bellway were up 48p at 2,876p in lunchtime trading.

Bellway boasts profit rise, but warns on Brexit and skill shortage https://t.co/zF3SmZTy7B pic.twitter.com/4UIYbzVI08

— Connie Ogburn (@connieogburngma) October 16, 2018

--- Adds broker comments and updates share price ---

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Tue, 16 Oct 2018 09:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/207164/bellway-still-bent-on-expanding-the-business-207164.html
<![CDATA[RNS press release - Final Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/LSE20181016070005_13829610/ Tue, 16 Oct 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/LSE20181016070005_13829610/ <![CDATA[RNS press release - BELLWAY PLC - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201810100619PR_NEWS_UKDISCLO_0045/ Wed, 10 Oct 2018 11:19:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201810100619PR_NEWS_UKDISCLO_0045/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201810010430PR_NEWS_UKDISCLO_0056/ Mon, 01 Oct 2018 09:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201810010430PR_NEWS_UKDISCLO_0056/ <![CDATA[RNS press release - BELLWAY PLC - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201809110505PR_NEWS_UKDISCLO_0037/ Tue, 11 Sep 2018 10:05:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201809110505PR_NEWS_UKDISCLO_0037/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201809030440PR_NEWS_UKDISCLO_0045/ Mon, 03 Sep 2018 09:40:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201809030440PR_NEWS_UKDISCLO_0045/ <![CDATA[News - Bellway upgraded to 'buy'; Deutsche Bank says fears over the London effect are overdone ]]> https://www.proactiveinvestors.co.uk/companies/news/203884/bellway-upgraded-to-buy-deutsche-bank-says-fears-over-the-london-effect-are-overdone-203884.html The current share price of house-builder Bellway PLC (LON:BWY) is a good entry point for investors, suggests Deutsche Bank.

Since the start of 2018, the stock has underperformed, both in absolute terms – the stock is down 11% over the period – and relative to the sector, and Deutsche Bank (DB) thinks this is because of a “perceived read-across from peer issues on London/South, plus a change in management”.

READ: Bellway expects record annual earnings but warns on house price growth slowdown

DB would argue that the change in chief executive was on the cards and that there is no change in the credibility of the management team.

Meanwhile, it thinks concerns about the house-builder’s exposure to the cooling housing market in London and the south-east are overdone.

“While group revenue from London is ahead of peers, Bellway’s private average selling price remains below the sector average and its strong and increasing focus on build efficiencies should provide support to margins,” DB predicted.

The bank has upgraded its recommendation from ‘hold’ to ‘buy’ and bumped up the price target from 3,716p to 3,745p.

The bank also amended its price targets for a number of stocks in the house-building sector:

Barratt Developments – 794p (from 541.4p); Berkeley Group – 4,014p (from 3,674p); Crest Nicholson – 524p (from 384.4p); McCarthy & Stone – 165p (from 110p); Persimmon – 3,093p (from 2,469p); Redrow – 672p (from 622p); Taylor Wimpey – 244p (from 168.65p)

Bellway’s shares currently trade at 2,941p, up 51p on the day.

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Thu, 30 Aug 2018 11:49:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/203884/bellway-upgraded-to-buy-deutsche-bank-says-fears-over-the-london-effect-are-overdone-203884.html
<![CDATA[News - Bellway expects record annual earnings but warns on house price growth slowdown ]]> https://www.proactiveinvestors.co.uk/companies/news/202448/bellway-expects-record-annual-earnings-but-warns-on-house-price-growth-slowdown-202448.html Bellway PLC (LON:BWY) said on Wednesday it expects “another year of significant earnings growth” but warned that a slowdown in house prices has put pressure on margins. 

In a trading update for the year to July 31, the housebuilder said it completed the sale of 10,307 new residential dwellings -- marking the first time it has ever topped 10,000 homes and a 6.9% increase on the 9,644 it completed last year.

READ: Bellway reiterates 10,000 home target as trading environment remains favourable

Some 80% of the completions were private homes, compared to 78% last year.

The company estimates revenue growth of 16% to nearly £3.0bn after reporting £2.5bn the previous year.

House price gains ease

But the operating margin is expected to dip to 22.0% from 22.3% as house price growth has eased.

Bellway said the rate of house price inflation has “moderated” and higher value homes have “at times, experienced slower sales rates and occasionally required a greater use of incentives”, although it has limited its exposure to the upper end of the market.

The pricing environment is “stable, with many sites still able to achieve low, single-digit increases, predominantly for affordably priced homes, located in areas of strong demand”, the group added. 

Even with the slowdown, house price gains continued to offset cost increases, but margins have started to abate nevertheless.

"Despite all the worries about a softening housing market, the market conditions for new homes of the sort Bellway makes remains very accommodative," said Neil Wilson, chief market analyst at Markets.com

"If Bellway is a bellwether for housebuilders, we could be about to see a turnaround in share price performance. Bellway is down more than 20% from October last year and a rally is on the cards.”

Help to Buy and low-interest rates support demand

Bellway said demand for affordably priced homes was supported by the government’s Help to Buy scheme and low-interest rates. The group pointed out that interest rates remain close to a historically low level despite last week’s hike by the Bank of England.

Reservations for new homes averaged 200 per week, compared to 187 per week last year, driven by a strong first half when there were plenty of site openings.  The second half slowed with reservations of 168 per week, the same rate as last year.

Bellway purchased 12,962 plots across 100 sites in desirable locations with high demand, up from 11,613 plots across 97 sites in the prior year.

The forward order book stood at 4,841 homes valued at £1.3bn. While that was higher than the forward order book of 4,749 homes last year, the value of those homes changed little.

Strong cash position and new earnings record

It ended the period with net cash of $99mln, up from £16mln in 2017.

“The group has set a new earnings record and yet, having invested significantly in land, has ended the year with a strong net cash position,” said chief executive Jason Honeyman.

“Trading has been robust and notwithstanding wider political and economic uncertainty in the UK, Bellway has both the financial and operational strength to respond opportunistically to future changes in market conditions.”

Shares fell 2.9% to 2,890p in morning trading. 

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Wed, 08 Aug 2018 07:38:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202448/bellway-expects-record-annual-earnings-but-warns-on-house-price-growth-slowdown-202448.html
<![CDATA[RNS press release - BELLWAY PLC - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201808080200PR_NEWS_UKDISCLO_0003/ Wed, 08 Aug 2018 07:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201808080200PR_NEWS_UKDISCLO_0003/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201808010425PR_NEWS_UKDISCLO_0048/ Wed, 01 Aug 2018 09:25:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201808010425PR_NEWS_UKDISCLO_0048/ <![CDATA[RNS press release - BELLWAY PLC - Retirement of Chief Executive and Board Changes ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807271000PR_NEWS_UKDISCLO_0097/ Fri, 27 Jul 2018 15:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807271000PR_NEWS_UKDISCLO_0097/ <![CDATA[RNS press release - BELLWAY PLC - Block Listing Application ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807270200PR_NEWS_UKDISCLO_0003/ Fri, 27 Jul 2018 07:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807270200PR_NEWS_UKDISCLO_0003/ <![CDATA[RNS press release - BELLWAY PLC - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807260931PR_NEWS_UKDISCLO_0088/ Thu, 26 Jul 2018 14:31:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807260931PR_NEWS_UKDISCLO_0088/ <![CDATA[RNS press release - BELLWAY PLC - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807100711PR_NEWS_UKDISCLO_0076/ Tue, 10 Jul 2018 12:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807100711PR_NEWS_UKDISCLO_0076/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807030610PR_NEWS_UKDISCLO_0042/ Tue, 03 Jul 2018 11:10:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201807030610PR_NEWS_UKDISCLO_0042/ <![CDATA[News - Bellway reiterates 10,000 home target as trading environment remains favourable ]]> https://www.proactiveinvestors.co.uk/companies/news/198681/bellway-reiterates-10000-home-target-as-trading-environment-remains-favourable-198681.html Bellway PLC (LON:BWY) has reiterated its 10,000 home target for the full year as a trading update for its third quarter revealed continued strong trading.

The FTSE 250 property developer said anticipated volume growth of around 600 homes in the full year would enable it to complete the sale of more than 10,000 homes for the first time in its history.

READ: Buoyant Bellway on track to build 10,000 new homes

The group added that since February it had achieved 233 reservations per week, up from 221 in 2017, while its order book value as of 3 June stood at £1.7bn, a 7.8% increase on 2017.

Bellway also said that an expected average selling price in excess of £280,000 and an anticipated operating margin of around 22%, earnings growth for the year should be “substantial”.

John Watson, executive chairman of Bellway, said that demand for new build homes remained strong and that the group was continuing to deliver its "long term and sustainable strategy of increasing shareholder value through responsible volume growth."

In a note to clients, analysts at Shore Capital commented the the update suggested third quarter trading was broadly in line, however, margins were slightly weaker than expected. They added that there was a "cautious tone" to a comment on pricing in the update which indicated that there is "more pressure and a greater use of sales incentives (prices cuts in effect)".

In late morning trading Tuesday, Bellway shares were down 2.3% at 3,328p.

--Refines broker comment and updates share price--

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Tue, 12 Jun 2018 08:32:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/198681/bellway-reiterates-10000-home-target-as-trading-environment-remains-favourable-198681.html
<![CDATA[RNS press release - BELLWAY PLC - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806120200PR_NEWS_UKDISCLO_0003/ Tue, 12 Jun 2018 07:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806120200PR_NEWS_UKDISCLO_0003/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806010724PR_NEWS_UKDISCLO_0109/ Fri, 01 Jun 2018 12:24:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806010724PR_NEWS_UKDISCLO_0109/ <![CDATA[RNS press release - BELLWAY PLC - Blocklisting - Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806010515PR_NEWS_UKDISCLO_0060/ Fri, 01 Jun 2018 10:15:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806010515PR_NEWS_UKDISCLO_0060/ <![CDATA[RNS press release - BELLWAY PLC - Block Listing cancellation and Block Listing Return ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806010513PR_NEWS_UKDISCLO_0058/ Fri, 01 Jun 2018 10:13:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201806010513PR_NEWS_UKDISCLO_0058/ <![CDATA[RNS press release - BELLWAY PLC - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201805010538PR_NEWS_UKDISCLO_0061/ Tue, 01 May 2018 10:38:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201805010538PR_NEWS_UKDISCLO_0061/ <![CDATA[RNS press release - BELLWAY PLC - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201804051130PR_NEWS_UKDISCLO_0095/ Thu, 05 Apr 2018 16:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3093/PRNRNS_201804051130PR_NEWS_UKDISCLO_0095/