Bellway PLC (LSE:BWY) shares fell 6.7% to 1,994p after interim results that showed steady progress, with investors unnerved by the shockwaves from the war in the Middle East that have led to renewed mortgage market volatility.
The group completed 4,702 homes in the six months to 31 January 2026, up around 3%, while operating profit edged 1.5% higher to £159 million, though margins slipped from 11.0% to 10.5%.
Net debt widened to £72 million from £8 million a year earlier, reflecting land investment, though the land bank grew modestly to 46,600 plots.
Chief executive Jason Honeyman said Bellway had delivered "a robust first half performance in a challenging market" and that customer demand had improved since the new year.
"The ongoing conflict in the Middle East heightens the risk of both inflationary cost pressures and an impact to customer demand, and we have already seen volatility return to the mortgage market.
"Notwithstanding this, I am confident that our self-help and drive for capital efficiency will help mitigate the impact on our strategy to increase cash generation and shareholder returns."
Private reservation rates in the six weeks from 1 February ran at 0.66 homes per site per week, flat on last year, with the forward order book broadly stable at £1.56 billion.
Operating profit for the year to July is expected to land in the £320-330 million range, a little below the consensus forecast at £334 million, as guidance for completions for the year was raised from 9,200 to 9,300-9,500.
Bellway has completed £64 million of a planned £150 million buyback and raised its interim dividend 9% to 23p per share.
The shares have now fallen 27% this year, mirroring a sector-wide decline driven by sluggish housing demand and geopolitical uncertainty.
Broker Stifel said: "Bellway is one of the better operators and therefore as well-placed as any of the housebuilders to withstand coming challenges, in our view. Valuation is historically low at 0.65x book compared to 0.69 for the sector. The shares may fall a little as FY26 guidance is 2-3% below consensus."