Bellway PLC (LSE:BWY) said it remains on track to meet full-year profit guidance despite a recent slowdown in customer demand and renewed pressure on building material costs.
The housebuilder said trading improved at the start of the spring selling season compared with last autumn, but demand softened in April and May following a rise in mortgage rates.
Private reservations fell 6.2% to 151 per week in the period from 1 February to 29 May, down from the 0.66 rate detailed at its interims in March. The overall reservation rate, including social housing, declined 5.1% to 186 per week. The cancellation rate remained low at 10%.
Bellway reiterated guidance for underlying operating profit of £320 million-£330 million in the year to 31 July 2026 and expects to complete between 9,300 and 9,500 homes.
Chief executive Jason Honeyman said: "Bellway continues to perform robustly in an increasingly challenging market, with customer demand having moderated in recent weeks, after a positive start to the spring selling season."
The group's forward order book stood at 5,345 homes worth £1.57 billion at 29 May, compared with 5,759 homes valued at £1.65 billion a year earlier and £1.56 billion in March.
Bellway said it was also facing pressure on building material costs due to higher fuel and energy prices, with some suppliers introducing surcharges.
Management is seeking to offset these pressures through procurement measures, new standard house designs and tight control of production costs.
Net debt increased to £236 million from £73 million a year earlier, reflecting land investment and shareholder returns. Adjusted gearing at the year end is expected to remain within its target range of 5-10%.
The company insisted that it intends to continue returning excess capital to shareholders after progressing a £150 million share buyback programme launched last October.
