Bellway (AO) | Buy | FY guidance reiterated, but demand and cost headwinds are intensifying

研报英文原文证据摘录

Bellway (AO) | Buy | FY guidance reiterated, but demand and cost headwinds are intensifying

midpoint of guidance.

Long-term visibility across the sector appears increasingly limited

The Middle East conflict continues to weigh on sector fundamentals. Initial concerns centred on mortgage rates remaining higher

for longer and the implications for housing demand, but the key pressure point has now shifted towards rising build cost

inflation.

This has prompted both Taylor Wimpey and Vistry to issue profit warnings, while Barratt and Persimmon reiterated their FY

outlooks, albeit alongside a more cautious view of the longer-term environment.

Similarly, Bellway today reiterated its full-year targets, including 9,300-9,500 completions and underlying operating profit of

GBP320-330m, while providing no visibility beyond the current fiscal year.

Visible Alpha consensus currently forecasts 9,561 completions in FY 2027, implying 2% YOY growth versus the midpoint of current

guidance, and underlying operating profit of GBP315m, representing a 3% YOY decline.

Equity stories shift from recovery to cash preservation

Although management teams across our coverage are adopting an even more selective approach to land investment, Bellway has

not announced any additional measures in today's statement.

Land banks across our coverage appear sufficiently large to support a near-term reduction in investment. However, this is far from

ideal, as it comes at the expense of future growth.

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