Newcastle-based housebuilder Bellway plc said its profit before tax rose 20.8% to £221.9 million in the year to July 31, 2025, as it commenced a £150 million share buyback programme and said it “intends to continue with the return of excess capital in future years.”

Bellway’s revenue rose 16.9% to £2.78 billion.

The Newcastle firm said its proposed total ordinary dividend per share has increased 29.6% to 70p “which reflects the increase in underlying earnings.” Bellway shares rose as much as 6% to around £26.24 to give the Newcastle firm a stock market value of roughly £3.1 billion.

The company reported growth in total housing completions of 14.3% to 8,749 homes at an average selling price of £316,412 (2024 – £307,909).

Bellway said its forward order book at October 5, 2025, comprised 5,285 homes (6 October 2024 – 5,164 homes) with a value of £1.52 billion.

However, on recent trading and outlook, Bellway said: “Since the start of the new financial year there has been a continuation of weak consumer sentiment which has carried from late spring.

“Customer demand has been affected by ongoing affordability constraints and uncertainties about potential taxation changes in the Government’s Budget in November 2025.”

Bellway CEO Jason Honeyman said: “Bellway has delivered a good performance in FY25 with double-digit growth in volume output and profits, and our sharper focus on balance sheet efficiency is reflected by the £150m share buyback programme announced today. 

“While we face some near-term market challenges, we have a high-quality land bank, strong balance sheet and the operational capacity to capitalise on the positive long-term fundamentals of our industry.

“Combined with our refreshed and disciplined approach to capital allocation, I am confident that we can drive increased volume output, cash generation and shareholder returns in FY26 and beyond.

“Bellway remains very well-positioned to continue delivering much needed high-quality new homes in the years ahead. However, supportive Government policy is essential for the industry to drive a meaningful and sustained increase in housing output.

“The Government must demonstrate its commitment to accelerating housebuilding by driving through planning reform and addressing the affordability constraints facing first-time buyers across the country.”

REACTION:

Richard Hunter, Head of Markets at interactive investor: “While the housebuilding sector remains on shaky foundations, Bellway has provided some grounds for optimism with a defiantly positive performance.

“Revenues of £2.78 billion represented an increase of 16.9% from the previous year, while underlying pre-tax profit spiked by 27.9% to £289.1 million, ahead of the group’s £284 million estimate at its recent trading statement. Underneath the bonnet Bellway also ground out some higher key metrics, with gross margin increasing to 16.4% from 16%, a net debt position of £10.5 million transformed into net cash of £41.8 million and an increase in land bank plots to 95704, including contracting to buy 8120 plots during the year. The latter shows the group’s financial agility to move when it sees plots emerging which fit in with its longer term profit hurdles.

“In addition, housing completions over the year rose by 14.3% to 8749, with an average selling price of £316412 which compared to £307909 the year previous. Despite the recent surprise decline in house prices which was reported, the group expects this number to rise to £320000 over the coming year, while maintaining its underlying operating margin of 11%, leaving the company on track to meet its target of 20% cumulative volume growth in the two years to July 2026.

“In terms of outlook, the forward order book currently stands at 5285 homes after the end of this reporting period, up from a corresponding 5164, with a value of £1.53 billion as compared to a previous £1.45 billion. The tailwind from the improved financial performance has led to the announcement of a £150 million share buyback programme which, all things being equal, should be supportive to the share price and also well received by investors. The 30% increase to the dividend takes the projected yield to 2.8%, which remains low by historic standards given last year’s cut from 140p to 54p. Nonetheless, both measures show some confidence in prospects by the group’s management.

“Even so, many hurdles remain in this cyclical sector.

“An increase to stamp duty in April followed uncertainty which has been hanging over the sector, with affordability being a particular headwind. The speed and number of interest rate cuts is also in question which could affect consumer confidence and propensity to buy, while there is evidence of buyers holding back ahead of the upcoming Budget. Indeed, Bellway has noted that while private reservations per outlet per week improved over the course of the year, there was less interest in the final quarter which has spilled over to the current trading situation.

“This weak consumer sentiment, which has now been in force since late spring, has led to further calls from the sector for the government to accelerate the proposed relaxation of planning regulations, which is far from taking full effect. Quite apart from the spectre of the Budget, there are also general affordability concerns, particularly for first-time buyers, which need to be addressed to give this cyclical sector an overdue boost.

“Despite its measured progress, the share price tells the story for Bellway. A positive recent trading statement has led to a spike of 8% in the last six months, but this rally is not sufficient to arrest a decline of 18% over the last year, as compared to a gain of 6% for the wider FTSE250.

“The shares remain 33% lower than their pre-pandemic peak in February 2020, which underlines the scale of the revival needed for the group to regain its former glories. Even so, investors are tending to recognise the recovery potential, and the share buyback programme announcement is an unexpected bonus. As such, the initial price reaction to the news has been positive and particularly notable against a weaker wider market. The general consensus of the shares as a buy signals further recognition of the group’s sterling progress and will be consolidated following these numbers.”