Bellway (BWY) AI Stock Analysis

• Market Cap: £3.18B
• Dividend Yield: 2.05%
• Average Volume (3M): 356.12K
• Price to Earnings (P/E): 21.7
• Beta (1Y): 1.55
• Revenue Growth: -11.63%
• EPS Growth: -31.81%
• Country: UK
• Employees: 2,659
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Residential Construction
• EPS (TTM): 1.24
• Shares Outstanding: 118,613,290
• 10 Day Avg. Volume: 223,244
• 30 Day Avg. Volume: 356,124
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £3,153.50
• Price Target Upside: 17.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

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

Financial Performance

H1 results were as expected with unit completions and adjusted PBT both up 12%.

Management Strategy

New CFO, Shane Doherty, has already set improving capital efficiency as a key priority, with a view to accelerating the expected recovery of returns.

Sales Performance

Improving sales rates and pricing in four of its regions.

Negative Factors

Market Valuation

The shares trade at a 14% discount to the sector on price to book, which looks about right given the relatively weaker post-tax RoE.

Sector Comparison

Shares trade at a 16% discount to the sector on price to book.

Bellway Business Overview & Revenue Model

Company Description

Bellway 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 Money

Bellway makes money primarily through the sale of newly constructed residential properties. The company's revenue model is centered around acquiring land, obtaining planning permissions, and constructing homes for sale. Key revenue streams include the direct sale of homes to individual buyers and transactions involving housing associations and local authorities. Bellway also benefits from government incentives, such as the Help to Buy scheme, which encourage home purchases. Additionally, the company engages in strategic partnerships with landowners and local councils to secure prime development opportunities, which contribute to its earnings.

Bellway Financial Statement Overview

Summary

Bellway's financial performance shows a mixed picture, with a strong balance sheet characterized by low leverage and a robust equity ratio. However, challenges are evident in the income statement and cash flow statement, with declining revenues, profitability, and negative cash flow trends indicating a need for strategic improvements.

Income Statement

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

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

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
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.38B	3.41B	3.54B	3.12B	2.23B
	Gross Profit
367.00M	687.30M	787.00M	651.90M	422.20M
	EBIT
212.80M	545.10M	653.00M	531.80M	324.80M
	EBITDA
223.70M	510.20M	314.70M	486.80M	255.60M
	Net Income Common Stockholders
130.50M	365.00M	242.60M	390.70M	192.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
119.50M	362.00M	375.30M	460.30M	51.40M
	Total Assets
5.00B	5.11B	4.99B	4.68B	4.08B
	Total Debt
130.00M	513.80M	540.60M	603.00M	410.70M
	Net Debt
10.50M	151.80M	165.30M	142.70M	359.30M
	Total Liabilities
1.53B	1.65B	1.62B	1.39B	1.09B
	Stockholders Equity
3.47B	3.46B	3.37B	3.29B	2.99B
Cash Flow		Free Cash Flow
-66.90M	243.40M	60.70M	429.60M	-65.90M
	Operating Cash Flow
-65.50M	246.10M	61.20M	432.90M	-57.60M
	Investing Cash Flow
-8.00M	-18.20M	19.10M	5.20M	-18.10M
	Financing Cash Flow
-169.00M	-241.20M	-165.30M	-29.20M	-74.10M

Bellway Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2682.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 2682 is above the 20-day moving average (MA) of 2421.60, above the 50-day MA of 2364.00, and above the 200-day MA of 2635.74, indicating a bullish trend. The MACD of 78.70 indicates Negative momentum. The RSI at 71.78 is Negative, neither overbought nor oversold. The STOCH value of 93.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:BWY.

Bellway Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFRD	80 Outperform	£380.15M	9.66	35.97%	4.47%	22.39%	179.53%
PSN	74 Outperform	£4.14B	15.50	7.71%	4.65%	15.42%	4.45%
BWY	64 Neutral	£3.18B	21.66	4.22%	2.05%	-11.63%	-31.81%
Sector *	60 Neutral	$6.58B	11.55	3.14%	4.05%	2.58%	-21.37%
CRST	54 Neutral	£451.60M	―	-13.06%	1.23%	-5.98%	-677.54%

Bellway Corporate Events

Bellway Enhances Employee Incentive Schemes with Share Purchase

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.

Spark’s Take on GB:BWY Stock

According to Spark, TipRanks’ AI Analyst, GB:BWY is a Neutral.

Bellway’s overall stock score reflects a 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 and negative long-term trends.

To see Spark’s full report on GB:BWY stock, click here.

Bellway Announces Updated Voting Rights and Share Capital

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.

Bellway PLC Reports Strong Interim Results with Growth in Housing Completions

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.

Bellway Announces Updated Voting Rights and Share Capital Structure

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.

Bellway Announces Director’s Resignation from Tritax EuroBox

Bellway p.l.c. announced that Sarah Whitney, a non-executive director, has resigned from the board of Tritax EuroBox plc, now known as Titanium Ruth Holdco Limited, effective December 10, 2024. This change in directorship may have implications for Bellway’s governance dynamics as Whitney adjusts her focus following her departure from Tritax EuroBox, potentially impacting her involvement in Bellway’s strategic initiatives.

Bellway PLC Updates on Shareholder Voting Rights

Bellway PLC has voluntarily disclosed an update regarding the control chain of a substantial shareholder, FMR LLC, a company based in Boston, USA. The update reveals an increase in FMR LLC’s voting rights in Bellway, now holding 4.8846% of total voting rights, up from a previous position of 4.7303%. This change indicates a slight shift in shareholder control, potentially impacting decision-making processes within Bellway and reflecting FMR LLC’s continued investment interest in the company.

Bellway Reports Strong Growth in Housing Completions and Financial Stability

Bellway p.l.c. announced a 11.9% increase in housing completions during the six months ending January 31, 2025, reflecting strong performance amidst challenging market conditions. The company maintained a robust financial position with modest net debt, a strong land bank, and a healthy forward order book, indicating their readiness to capitalize on future growth opportunities in the UK housing market. Bellway’s strategic land investments and operational strengths position it well to deliver future volume growth, supporting long-term value creation for shareholders.

Bellway Announces Update on Share Capital and Voting Rights

Bellway p.l.c. has announced its current share capital structure, consisting of 118,982,479 ordinary shares with voting rights as of January 31, 2025. The Bellway Employee Benefit Trust holds 325,114 of these shares but has waived its voting rights and dividends, resulting in a total of 118,657,365 voting rights for the company. This announcement provides transparency in Bellway’s shareholding and voting rights status, which is important for stakeholders and market participants to understand the company’s governance and capital structure.