Housebuilder Bellway (LON:BWY) balanced a positive FY26 trading update with a cautious outlook for FY27. The firm noted customer demand was still ‘constrained’ by economic uncertainty, affordability issues and rising mortgage costs.
Postive FY26 results
For the year to the end of July, Newcastle-based Bellway delivered 9,695 completions, a 10.8% increase on the previous year. Average selling prices were up 2.5% to £324,404, so total revenue increased by 13.6% to £3.16 billion.
Underlying operating profit increased by 5.6% to £320.6 million, while underlying pre-tax profit increased 5.7% to £305.7 million. Adjusted cash flow increased by 36% to £869 million, and the group ended the year with net cash of £157.7 million.
Bellway FY26 results
| FY26 | FY25 | Change | |
| Completions | 9,695 | 8,749 | +10.6% |
| Revenue (£m) | 3,162 | 2,783 | +13.6% |
| Operating profit (£m) | 320.6 | 303.5 | +5.6% |
| Pre-tax profit (£m) | 305.7 | 289.1 | +5.7% |
| EPS (p) | 187.8 | 176.7 | +6.3% |
| DPS (p) | 75 | 70 | +7.1% |
Source: Company accounts
Increased shareholder returns
Thanks to its strong balance sheet and year-end net cash position, the firm is increasing shareholder returns. The total dividend for the year has been increased from 70p to 75p in a first step.
In addition to ordinary dividends, the firm is returning £150 million through a share buyback during FY27. It launched the first £50 million tranche of the buyback in September, and today it increased the amount to £75 million.
Commenting on the policy, CEO Jason Honeyman said: ‘Bellway has delivered a robust performance, growing both volume output and profits despite ongoing challenges across the housing market. Our continued focus on operational improvement and capital efficiency has enhanced resilience, driven a significant 36% increase in adjusted operating cashflow and supported higher shareholder returns.’
Cautious FY27 outlook
Despite a strong FY26 performance, Bellway is not getting ahead of itself and is conscious of the challenges. This is backed up by current trading, with private reservations and the order book below year-ago levels.
Net private reservations are running at 0.45 units per outlet per week against 0.48 this time last year. Similarly, the forward order book at 2 October was 4,981 homes against 5,285 homes a year ago, with a correspondingly lower value.
The group is targeting total completions of between 9,000 and 9,400 this year, below the level of FY26. Average selling prices are expected to be flat, while the operating margin is expected to fall due to build cost inflation and incentives.
We aren’t fans of the housebuilding sector in general but we have to congratulate Bellway. First, it put in an impressive performance in FY26 and looks much healthier financially than its competitors. Second, it is completely sanguine about the outlook and its forecasts leave room for upgrades if the market improves.
We don’t know whether the ‘Your First Home’ scheme will make a meaningful difference, but on paper it’s positive for first-time buyers. They still need to get a mortgage, however, and the banks have pulled a lot of their cheap five-year deals.
That said, Bellway has the financial strength and the operational capability to handle whatever happens, unlike some of its rivals. If the market does show clear signs of improvement, it would be one of the first names on our list.
