British homebuilder Bellway expects continued challenges ahead

Bellway plc (LON: BWY) says it will build fewer homes in its current financial year. Its shares are down more than 2.0% on Wednesday.

Bellway reports a year-on-year hit to revenue

In a trading update this morning, the homebuilder reported £3.4 billion ($4.33 billion) in revenue for its fiscal year that ended on July 31^st – down from £3.52 billion in 2022.

Bellway completed 10,945 houses in the twelve-month period versus 11,198 last year. According to its CEO Jason Honeyman:

Average selling price also declined year-on-year from £314,400 to £310,000. Still, the London-listed firm left its dividend for fiscal 2023 unchanged at 140 pence a share. At writing, its shares are up more than 10% for the year.

Bellway to see a decline in operating margin

Bellway plc now expects its full-year underlying operating margin to sit around 16% - a 250 basis points decline attributed to several factors including overhead inflation and build cost. CEO Honeyman also said today:

Still, the British firm agreed that build cost inflation had eased a bit since early 2023.

On Wednesday, Bellway also reiterated its commitment to maintaining the strength of its balance sheet. To that end, it’s taking steps to lower its headcount, as per the press release. Wall Street currently has a consensus “overweight” rating on the U.K. stock.