Bellway Expects Return to Growth in Fiscal 2025 Despite Revenue Fall

By Christian Moess Laursen

Introduction

Despite a revenue decline in the first half of fiscal 2024, Bellway, a prominent house builder, remains optimistic about a return to growth in fiscal 2025, provided that market conditions remain stable.

Revenue Performance

• During the first half of fiscal 2024 (ended Jan. 31), Bellway's housing revenue amounted to £1.25 billion ($1.35 billion).
• This figure marks a decline from £1.805 billion in the same period of the prior year.
• However, the company states that this result is in line with its expectations.

Factors Influencing Affordability

• Customer affordability showed steady improvement throughout the period.
• This improvement was attributed to wage increases, easing consumer-price inflation, and a gradual reduction in mortgage interest rates.

Positive Indicators

• The winter period, which is typically quieter, saw encouraging levels of customer enquiries.
• Furthermore, the private reservation rate increased in January to 0.59 per outlet per week, compared to 0.45 in January of the previous year.

Completion and Selling Price

• In the first half of fiscal 2024, Bellway completed 4,092 homes.
• These homes were sold at an average price of £309,300.
• In comparison, the company completed 5,695 homes at an average price of £316,929 during the same period a year before.
• This reflects the generally weaker business conditions experienced since late summer.

Order Book and Output Forecast

• Bellway currently has an order book of 3,970 homes, with a total value of £1.01 billion.
• The company expects this order book to support a full fiscal-year output of approximately 7,500 homes.
• It is worth noting that in fiscal 2023, Bellway completed 10,945 homes.