Bellway PLC (LSE:BWY) has reaffirmed its full-year profit guidance even as rising mortgage rates weighed on customer demand during April and May.
The UK housebuilder said trading conditions improved at the start of the spring selling season compared with last autumn, before softening as borrowing costs climbed.
Private reservations fell 6.2% to 151 per week in the period from 1 February to 29 May, down from the 0.66 rate reported at its interim results in March.
The overall reservation rate, which includes social housing, declined 5.1% to 186 per week, though the cancellation rate held at a low 10%.
Chief executive Jason Honeyman said: “Bellway continues to perform robustly in an increasingly challenging market, with customer demand having moderated in recent weeks, after a positive start to the spring selling season.”
The company reiterated guidance for underlying operating profit of between £320 million and £330 million for the year to 31 July 2026, with completions expected to land between 9,300 and 9,500 homes.
Bellway’s forward order book stood at 5,345 homes worth £1.57 billion as of 29 May, compared with 5,759 homes valued at £1.65 billion at the same point a year earlier.
The company is also contending with rising building material costs driven by higher fuel and energy prices, with some suppliers introducing surcharges that are adding further pressure to margins.
Management is responding by pursuing procurement efficiencies, introducing new standard house designs, and applying tight controls over production costs to protect profitability.
Net debt increased to £236 million from £73 million a year earlier, reflecting ongoing investment in land and the continued return of capital to shareholders.
Adjusted gearing at the year end is expected to remain within the company’s target range of 5% to 10%, providing reassurance that the balance sheet remains under control.
Bellway confirmed it intends to press ahead with returning excess capital to shareholders, having launched a £150 million share buyback programme last October that remains in progress.
