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Bellway (GB:BWY)
LSE:BWY
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Bellway (BWY) AI Stock Analysis

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GB:BWY

Bellway

(LSE:BWY)

Rating:60Neutral
Price Target:
2,667.00p
▲(7.71%Upside)
Bellway's overall stock score is driven by mixed financials, with strong balance sheet metrics overshadowed by weak income and cash flow statements. Technical indicators suggest bearish momentum, impacting the score negatively. Recent earnings call and corporate events provide positive strategic insights, slightly lifting the overall outlook.
Positive Factors
Customer Engagement
Management is optimistic due to a seasonal increase in customer enquiries and reservation rates during the spring selling season.
Leadership
The new CFO, Shane Doherty, is focused on enhancing capital efficiency, aiming to accelerate the recovery of returns.
Sales Performance
Improving sales rates and pricing in four of its regions boost confidence in the company's market position.
Negative Factors
Valuation
The 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 Earnings Call Summary

Earnings Call Date:Mar 25, 2025
(Q2-2025)
|
% Change Since: 3.45%|
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 Financial Statement Overview

Summary
Bellway's financial performance is mixed, with a strong balance sheet highlighted by a low debt-to-equity ratio and robust equity ratio. However, challenges are present in the income and cash flow statements, including declining revenues, reduced profitability, and negative cash flow trends.
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.38B3.41B3.54B3.12B2.23B
Gross Profit367.00M687.30M787.00M651.90M422.20M
EBITDA223.70M510.20M314.70M486.80M255.60M
Net Income130.50M365.00M242.60M390.70M192.90M
Balance Sheet
Total Assets5.00B5.11B4.99B4.68B4.08B
Cash, Cash Equivalents and Short-Term Investments119.50M362.00M375.30M460.30M51.40M
Total Debt130.00M513.80M540.60M603.00M410.70M
Total Liabilities1.53B1.65B1.62B1.39B1.09B
Stockholders Equity3.47B3.46B3.37B3.29B2.99B
Cash Flow
Free Cash Flow-66.90M243.40M60.70M429.60M-65.90M
Operating Cash Flow-65.50M246.10M61.20M432.90M-57.60M
Investing Cash Flow-8.00M-18.20M19.10M5.20M-18.10M
Financing Cash Flow-169.00M-241.20M-165.30M-29.20M-74.10M

Bellway Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2476.00
Price Trends
50DMA
2701.38
Negative
100DMA
2578.65
Negative
200DMA
2547.93
Negative
Market Momentum
MACD
-58.24
Positive
RSI
30.96
Neutral
STOCH
13.10
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BWY, the sentiment is Negative. The current price of 2476 is below the 20-day moving average (MA) of 2576.50, below the 50-day MA of 2701.38, and below the 200-day MA of 2547.93, indicating a bearish trend. The MACD of -58.24 indicates Positive momentum. The RSI at 30.96 is Neutral, neither overbought nor oversold. The STOCH value of 13.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
74
Outperform
£3.55B9.8310.73%6.77%0.39%-17.64%
71
Outperform
£3.71B13.877.71%4.80%15.42%4.45%
66
Neutral
£3.79B17.251.97%9.42%4.21%-65.57%
63
Neutral
£1.89B27.162.27%6.04%-66.96%
62
Neutral
$17.13B10.11-8.47%3.27%1.63%-24.01%
60
Neutral
£2.97B20.214.22%2.38%-11.63%-31.81%
50
Neutral
£5.37B36.041.81%4.64%4.78%-53.59%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BWY
Bellway
2,476.00
-303.66
-10.92%
GB:BTRW
Barratt Redrow
372.90
-141.37
-27.49%
GB:BKG
The Berkeley Group Holdings
3,654.00
-1,379.56
-27.41%
GB:VTY
Vistry Group
581.00
-790.00
-57.62%
GB:PSN
Persimmon
1,145.00
-379.09
-24.87%
GB:TW
Taylor Wimpey
100.45
-47.84
-32.26%

Bellway Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Bellway Announces New Director Appointment
Positive
Jul 21, 2025

Bellway PLC has announced a change in the appointments of Sarah Whitney, a non-executive and senior independent director. Sarah Whitney will join Regional REIT Limited as an independent non-executive director starting from August 4, 2025, and will also serve on several key committees. This appointment reflects Bellway’s strategic alignment and the strengthening of its leadership team, potentially impacting its governance and stakeholder relations positively.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Bellway Joins UK Housebuilders in CMA Commitments for Affordable Housing
Neutral
Jul 9, 2025

Bellway p.l.c. has engaged with the UK Competition and Markets Authority (CMA) by offering voluntary commitments, alongside six other UK housebuilders, to address potential concerns in the housebuilding sector. As part of these commitments, Bellway will contribute £13.5 million to government programs supporting affordable housing, without admitting any wrongdoing. The CMA has not determined any competition law infringement, and Bellway is committed to working constructively with the authority.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Regulatory Filings and Compliance
Bellway Updates on Share Capital and Voting Rights
Neutral
Jul 3, 2025

Bellway p.l.c. announced that as of 30 June 2025, its ordinary issued share capital consists of 118,988,622 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, resulting in a total of 118,618,525 voting rights. This update on voting rights and capital structure provides stakeholders with clarity on the company’s share distribution and governance.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Bellway Reports Strong Trading Performance and Growth Outlook
Positive
Jun 10, 2025

Bellway p.l.c. reported robust trading performance from February to June 2025, with increased customer confidence and reservation rates. The company expects to deliver between 8,600 and 8,700 homes for the financial year, with an anticipated operating margin of 11%. The forward order book has grown by 7.7%, and the average selling price is expected to rise to £315,000 due to changes in product mix. Bellway’s disciplined approach to land acquisition has resulted in the purchase of 6,759 plots, supporting its long-term growth ambitions. The company is fully sold for the current financial year and aims for a 20% cumulative volume growth by July 2026, focusing on capital efficiency and shareholder value.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

Regulatory Filings and Compliance
Bellway PLC Announces Current Share Capital and Voting Rights
Neutral
Jun 2, 2025

Bellway PLC has announced that its ordinary issued share capital consists of 118,985,070 ordinary shares, each with voting rights, as of May 30, 2025. The Bellway Employee Benefit Trust holds 370,097 of these shares but has waived its rights to vote and receive dividends, resulting in a total of 118,614,973 voting rights. This update reflects the company’s current capital structure and its implications for shareholder voting power.

The most recent analyst rating on (GB:BWY) stock is a Buy with a £3646.00 price target. To see the full list of analyst forecasts on Bellway stock, see the GB:BWY Stock Forecast page.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 21, 2025