tiprankstipranks
Trending News
More News >
Bellway (GB:BWY)
LSE:BWY

Bellway (BWY) AI Stock Analysis

Compare
97 Followers

Top Page

GB

Bellway

(LSE:BWY)

Rating:64Neutral
Price Target:
Bellway's overall stock score reflects its robust balance sheet and positive future guidance, tempered by current operational challenges and high valuation. The strong order book and strategic land position provide a foundation for future growth, but declining income and cash flow require improvements. Technical indicators suggest mixed short-term trends, while the valuation highlights potential overvaluation concerns. The earnings call provides a slightly positive outlook, emphasizing growth potential despite existing challenges.
Positive Factors
Leadership
The new CFO, Shane Doherty, has set improving capital efficiency as a key priority to accelerate the recovery of returns.
Sales Performance
Improvement in sales rates and pricing has been observed in four of its regions.
Negative Factors
Valuation
Shares trade at a 14% discount to the sector on price to book, reflecting a relatively weaker post-tax RoE.

Bellway (BWY) vs. iShares MSCI United Kingdom ETF (EWC)

Bellway Business Overview & Revenue Model

Company DescriptionBellway p.l.c., together with its subsidiaries, engages in the home building business in the United Kingdom. The company builds and sells homes ranging from one-bedroom apartments to six-bedroom family homes, as well as provides homes to housing associations for social housing. It offers homes under Bellway and Ashberry brands. The company was incorporated in 1978 and is headquartered in Newcastle upon Tyne, the United Kingdom.
How the Company Makes MoneyBellway makes money primarily through the sale of newly constructed residential properties. The company's revenue model is centered around acquiring land, obtaining necessary planning permissions, and developing these sites into residential communities. Bellway's key revenue streams include the sale of homes, which range from apartments to detached houses, catering to various market segments from first-time buyers to luxury home seekers. The company also generates income from partnerships with housing associations for affordable housing projects, which are often subsidized or supported by government schemes. Additionally, Bellway may engage in joint ventures or strategic partnerships to expand its development capabilities and market reach. The company's earnings are influenced by factors such as housing demand, real estate market trends, government policies, and economic conditions.

Bellway Financial Statement Overview

Summary
Bellway exhibits a mixed financial performance. While the balance sheet remains strong, demonstrating financial stability and low leverage, the income statement and cash flow statement indicate areas of concern. Declining revenues and profitability, along with negative cash flow trends, suggest the need for strategic initiatives to drive growth and improve operational efficiency. Emphasis on cash flow management and profitability enhancement will be crucial for Bellway's future financial health.
Income Statement
65
Positive
Bellway's income statement reveals a decline in revenue from the previous year, with a substantial decrease in net income. The gross profit margin stands at 15.4% and the net profit margin at 5.5%, both lower than industry expectations. The EBIT margin is 8.9%, showing challenges in maintaining operating efficiency. The revenue growth rate is negative, indicating a contraction compared to the prior year. Overall, the income statement reflects a need for strategic improvements to regain growth and profitability.
Balance Sheet
78
Positive
Bellway's balance sheet remains strong, with a low debt-to-equity ratio of 0.04, indicating prudent financial management and low leverage risk. The return on equity is 3.8%, which suggests moderate effectiveness in using equity to generate profits. The equity ratio is robust at 69.3%, showing a stable financial structure. However, the decline in equity from the previous year warrants attention to sustain this position.
Cash Flow
52
Neutral
The cash flow statement shows negative free cash flow growth, indicating challenges in generating cash from operations. The operating cash flow to net income ratio is negative, highlighting cash flow management issues. The free cash flow to net income ratio is also negative, suggesting inefficiencies in converting profits into cash. Improvements in cash management strategies are essential to enhance liquidity and financial flexibility.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
2.54B2.38B3.41B3.54B3.12B2.23B
Gross Profit
397.70M367.00M687.30M787.00M651.90M422.20M
EBIT
237.20M212.80M545.10M653.00M531.80M324.80M
EBITDA
243.40M223.70M510.20M314.70M486.80M255.60M
Net Income Common Stockholders
146.90M130.50M365.00M242.60M390.70M192.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
122.00M119.50M362.00M375.30M460.30M51.40M
Total Assets
5.08B5.00B5.11B4.99B4.68B4.08B
Total Debt
130.00M130.00M513.80M540.60M603.00M410.70M
Net Debt
8.00M10.50M151.80M165.30M142.70M359.30M
Total Liabilities
1.55B1.53B1.65B1.62B1.39B1.09B
Stockholders Equity
3.52B3.47B3.46B3.37B3.29B2.99B
Cash FlowFree Cash Flow
-15.90M-66.90M243.40M60.70M429.60M-65.90M
Operating Cash Flow
-9.40M-65.50M246.10M61.20M432.90M-57.60M
Investing Cash Flow
-14.00M-8.00M-18.20M19.10M5.20M-18.10M
Financing Cash Flow
-65.60M-169.00M-241.20M-165.30M-29.20M-74.10M

Bellway Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2654.00
Price Trends
50DMA
2479.99
Positive
100DMA
2431.80
Positive
200DMA
2616.07
Positive
Market Momentum
MACD
54.97
Positive
RSI
54.67
Neutral
STOCH
23.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BWY, the sentiment is Positive. The current price of 2654 is below the 20-day moving average (MA) of 2682.83, above the 50-day MA of 2479.99, and above the 200-day MA of 2616.07, indicating a neutral trend. The MACD of 54.97 indicates Positive momentum. The RSI at 54.67 is Neutral, neither overbought nor oversold. The STOCH value of 23.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:BWY.

Bellway Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBPSN
77
Outperform
£4.23B15.837.71%4.54%15.42%4.45%
GBTW
77
Outperform
£4.16B18.954.92%8.04%-3.22%-37.21%
GBBKG
74
Outperform
£4.15B11.5811.03%1.60%0.39%-17.64%
GBVTY
65
Neutral
£1.92B27.592.27%6.04%-66.96%
GBBWY
64
Neutral
£3.16B21.444.22%2.03%-11.63%-31.81%
62
Neutral
$6.84B11.233.09%3.95%2.66%-25.23%
60
Neutral
£6.54B43.751.81%3.78%4.78%-53.59%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BWY
Bellway
2,654.00
15.08
0.57%
GB:BTRW
Barratt Developments
457.60
-30.86
-6.32%
GB:BKG
The Berkeley Group Holdings
4,196.00
-934.42
-18.21%
GB:VTY
Vistry Group
590.20
-663.80
-52.93%
GB:PSN
Persimmon
1,323.00
-55.19
-4.00%
GB:TW
Taylor Wimpey
117.65
-18.78
-13.77%

Bellway Earnings Call Summary

Earnings Call Date:Mar 25, 2025
(Q2-2025)
|
% Change Since: 10.89%|
Next Earnings Date:Oct 14, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in the first half with significant growth in completions, order book, and private output. However, challenges such as low RoCE, decreased social output, and increased overhead expenses suggest areas needing improvement. Overall, the positive aspects slightly outweigh the negatives, indicating potential for future growth and improvement.
Q2-2025 Updates
Positive Updates
Strong Increase in Completions
Completions increased by 12% to almost 4,600 homes, driving a healthy increase in profit.
Order Book Growth
The order book has grown by around 20% to over 4,700 homes.
Increase in Private Output
Private output increased by 17.5% to 3,617 homes.
Record NHBC Awards
Achieved a record 45 NHBC Pride in the Job awards, including 10 seals of excellence and 3 regional awards.
Strong Cash Flow and Low Debt
Generated £350 million in operating cash flow and ended the period with low net debt of £8 million.
Negative Updates
Low Return on Capital Employed
RoCE at 9%, indicating room for improvement and requiring a focus on capital efficiencies.
Decrease in Social Output
Social output was 5.3% lower at 960 homes.
Challenges with Build Cost Inflation
Higher embedded cost inflation carried from work in progress remains a headwind to margin in the near term.
Increased Overhead Expenses
Overhead expenses rose by 10% to £77 million.
Company Guidance
In the recent call, Bellway provided detailed guidance on its future performance, emphasizing several key metrics. The company is targeting the completion of at least 8,500 homes for the fiscal year, with 1,900 of these being social housing. They anticipate an average selling price of approximately £310,000, maintaining a stable pricing environment despite flat house price inflation (HPI) and modest build cost inflation (BCI). The order book has increased by 20% to over 4,700 homes, and outlet numbers averaged 248 in the period. Bellway also highlighted a strong land bank of 95,000 plots, with over 30,000 having detailed consent. Despite an 11.9% increase in profit before tax to £150 million, the company acknowledges a need to improve their return on capital employed (RoCE), currently at 9%. They plan to achieve at least 20% volume growth over the next two years, reaching 10,000 homes by FY '27. Operationally, the company has seen a private sales rate of 0.76 in recent weeks and aims for an operating margin approaching 11%. Bellway also intends to increase capital efficiency, with a focus on reducing work-in-progress (WIP) and improving cash generation to deliver greater shareholder returns.

Bellway Corporate Events

Regulatory Filings and Compliance
Bellway Updates on Share Capital and Voting Rights
Neutral
May 1, 2025

Bellway p.l.c. announced that as of April 30, 2025, its issued share capital comprises 118,983,388 ordinary shares with voting rights. The Bellway Employee Benefit Trust holds 370,097 of these shares but has waived its voting rights and dividend entitlements. Consequently, the total number of voting rights in the company is 118,613,291. This update is significant for stakeholders as it clarifies the company’s voting rights structure, potentially impacting shareholder decisions and company governance.

Business Operations and Strategy
Bellway Enhances Employee Incentive Schemes with Share Purchase
Positive
Apr 9, 2025

Bellway p.l.c. announced that its Employee Benefit Trust (EBT) purchased 44,983 ordinary shares at £22.075 per share to support its share incentive schemes for employees, including executive directors and other key personnel. This move underscores Bellway’s commitment to employee engagement and retention, while the EBT now holds a total of 370,097 shares, contributing to the company’s strategic human resource initiatives.

Regulatory Filings and Compliance
Bellway Announces Updated Voting Rights and Share Capital
Neutral
Apr 1, 2025

Bellway p.l.c. has announced that as of March 31, 2025, its ordinary issued share capital consists of 118,983,388 ordinary shares with voting rights, with no shares held in Treasury. The Bellway Employee Benefit Trust holds 325,114 ordinary shares but has waived its voting rights and dividend entitlements, resulting in a total of 118,658,274 voting rights for Bellway p.l.c.

DividendsBusiness Operations and StrategyFinancial Disclosures
Bellway PLC Reports Strong Interim Results with Growth in Housing Completions
Positive
Mar 25, 2025

Bellway PLC reported a robust performance for the first half of the financial year ending January 31, 2025, with housing completions rising by 11.9% and revenue increasing by 12.3% compared to the same period last year. The company is on track to deliver at least 8,500 homes for the full year, supported by a strong forward order book and a well-capitalized balance sheet. The increase in private reservation rates and a strategic expansion of its land bank position Bellway well for multi-year growth, despite challenges in the planning system. The interim dividend per share rose by 31.3%, reflecting confidence in future growth prospects.

Regulatory Filings and Compliance
Bellway Announces Updated Voting Rights and Share Capital Structure
Neutral
Mar 3, 2025

Bellway p.l.c. has announced its current issued share capital, which consists of 118,982,550 ordinary shares with voting rights, as of February 28, 2025. The Bellway Employee Benefit Trust holds 325,114 of these shares but has waived its voting rights and dividend entitlements, resulting in a total of 118,657,436 voting rights. This update is crucial for stakeholders as it clarifies the company’s voting structure and share distribution, potentially impacting shareholder decisions and market perceptions.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.