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Bellway (GB:BWY)
LSE:BWY

Bellway (BWY) AI Stock Analysis

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GBBellway
(LSE:BWY)
64Neutral
Bellway's overall score reflects mixed financial performance with strong balance sheet stability but concerns over declining revenues and profitability. The technical analysis indicates potential bearish momentum, while valuation suggests the stock may be overvalued relative to peers. The earnings call presents an optimistic future outlook, supported by a strong order book and strategic investments, which partially offset current challenges.

Bellway (BWY) vs. S&P 500 (SPY)

Bellway Business Overview & Revenue Model

Company DescriptionBellway (BWY) is a prominent UK-based residential property developer, operating primarily in the housing construction sector. The company specializes in building high-quality homes across England, Scotland, and Wales, catering to a wide range of customers, including first-time buyers, families, and the elderly. Bellway is known for its comprehensive portfolio that encompasses various housing types, from affordable homes to luxury properties, ensuring a broad market appeal.
How the Company Makes MoneyBellway makes money primarily through the sale of newly constructed residential properties. The company's revenue model is centered around acquiring land, obtaining planning permissions, and constructing homes for sale. Key revenue streams include the direct sale of homes to individual buyers and transactions involving housing associations and local authorities. Bellway also benefits from government incentives, such as the Help to Buy scheme, which encourage home purchases. Additionally, the company engages in strategic partnerships with landowners and local councils to secure prime development opportunities, which contribute to its earnings.

Bellway Financial Statement Overview

Summary
Bellway exhibits a mixed financial performance. While the balance sheet remains strong with low leverage, the income statement and cash flow statement indicate areas of concern. Declining revenues and profitability, along with negative cash flow trends, suggest the need for strategic initiatives to drive growth and improve operational efficiency.
Income Statement
65
Positive
Bellway's income statement reveals a decline in revenue from the previous year, with a substantial decrease in net income. The gross profit margin stands at 15.4% and the net profit margin at 5.5%, both lower than industry expectations. The EBIT margin is 8.9%, showing challenges in maintaining operating efficiency. The revenue growth rate is negative, indicating a contraction compared to the prior year. Overall, the income statement reflects a need for strategic improvements to regain growth and profitability.
Balance Sheet
78
Positive
Bellway's balance sheet remains strong, with a low debt-to-equity ratio of 0.04, indicating prudent financial management and low leverage risk. The return on equity is 3.8%, which suggests moderate effectiveness in using equity to generate profits. The equity ratio is robust at 69.3%, showing a stable financial structure. However, the decline in equity from the previous year warrants attention to sustain this position.
Cash Flow
52
Neutral
The cash flow statement shows negative free cash flow growth, indicating challenges in generating cash from operations. The operating cash flow to net income ratio is negative, highlighting cash flow management issues. The free cash flow to net income ratio is also negative, suggesting inefficiencies in converting profits into cash. Improvements in cash management strategies are essential to enhance liquidity and financial flexibility.
Breakdown
Sep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
2.38B3.41B3.54B3.12B2.23B
Gross Profit
367.00M687.30M787.00M651.90M422.20M
EBIT
212.80M545.10M653.00M531.80M324.80M
EBITDA
223.70M510.20M314.70M486.80M255.60M
Net Income Common Stockholders
130.50M365.00M242.60M390.70M192.90M
Balance SheetCash, Cash Equivalents and Short-Term Investments
119.50M362.00M375.30M460.30M51.40M
Total Assets
5.00B5.11B4.99B4.68B4.08B
Total Debt
130.00M513.80M540.60M603.00M410.70M
Net Debt
10.50M151.80M165.30M142.70M359.30M
Total Liabilities
1.53B1.65B1.62B1.39B1.09B
Stockholders Equity
3.47B3.46B3.37B3.29B2.99B
Cash FlowFree Cash Flow
-66.90M243.40M60.70M429.60M-65.90M
Operating Cash Flow
-65.50M246.10M61.20M432.90M-57.60M
Investing Cash Flow
-8.00M-18.20M19.10M5.20M-18.10M
Financing Cash Flow
-169.00M-241.20M-165.30M-29.20M-74.10M

Bellway Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2260.00
Price Trends
50DMA
2416.00
Negative
100DMA
2552.02
Negative
200DMA
2681.64
Negative
Market Momentum
MACD
-49.84
Positive
RSI
35.02
Neutral
STOCH
37.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BWY, the sentiment is Negative. The current price of 2260 is below the 20-day moving average (MA) of 2404.10, below the 50-day MA of 2416.00, and below the 200-day MA of 2681.64, indicating a bearish trend. The MACD of -49.84 indicates Positive momentum. The RSI at 35.02 is Neutral, neither overbought nor oversold. The STOCH value of 37.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BWY.

Bellway Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
£341.99M9.6529.58%4.44%27.20%318.27%
GBBWY
64
Neutral
£2.68B20.583.77%2.32%-30.13%-63.13%
60
Neutral
$13.01B10.450.79%3.53%1.60%-22.47%
47
Neutral
£390.49M-14.20%7.96%-5.98%-677.54%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BWY
Bellway
2,260.00
-438.49
-16.25%
GB:GFRD
Galliford Try
348.00
116.62
50.40%
GB:CRST
Crest Nicholson Holdings
152.10
-52.50
-25.66%

Bellway Earnings Call Summary

Earnings Call Date: Oct 15, 2024 | % Change Since: -24.82% | Next Earnings Date: Mar 25, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautiously optimistic outlook, with Bellway poised for significant growth due to a strong order book and favorable market conditions. However, challenges such as reduced revenue and ongoing building safety costs temper the overall positive sentiment.
Highlights
Strong Order Book and Growth Potential
Bellway has a healthy order book worth £1.4 billion, with significant growth potential projected for FY '25 and FY '26, driven by private sales and a robust pipeline of land developments.
Positive Market Outlook
The market backdrop is improving with reduced cost inflation and better affordability, setting the stage for Bellway to capitalize on favorable trading conditions.
Investment in Timber Frame Facility
Bellway is investing in a new timber frame manufacturing facility to increase timber frame usage to 30% by 2030, supporting volume growth and sustainability goals.
Recognition and Sustainability Achievements
Bellway was awarded Large House Builder of the Year, reduced site waste by 17%, and achieved a 14% reduction in Scope 1 and 2 carbon emissions.
Solid Financial Position
The company maintains a strong balance sheet with low net debt of £10 million and a diversified finance structure, providing resilience and capacity for further investment.
Lowlights
Reduced Housing Revenue and Profit
Housing revenue fell to £2.4 billion due to weaker trading conditions, leading to a reduced PBT of £226 million and a lower operating margin of 10%.
Challenges with Building Safety Costs
Bellway incurred a £37 million net adjusted charge for building safety, with ongoing remediation expenses expected to be up to £100 million in FY '25.
Lower Completions and Social Housing Issues
The number of completions decreased, and social housing obligations were accelerated in FY '23, impacting the FY '24 results.
Company Guidance
In the call, Bellway provided detailed guidance on several financial metrics for the fiscal year 2025, emphasizing a recovery phase following a challenging FY '24. The company expects to complete at least 8,500 homes with an average selling price around £310,000, slightly higher than FY '24. They project an underlying operating margin approaching 11%, up from 10% in the previous year. The order book shows improvement, with a healthy increase in private sales projected to drive growth in FY '25. The net finance charge is anticipated to rise to about £16 million, while the overall tax rate has increased to 29%. Bellway's strategy includes significant investments in strategic land and a new timber frame facility, with a focus on delivering multiyear volume growth and enhancing return on capital employed. The company maintains a strong balance sheet with low net debt and adequate facilities to support its growth ambitions.

Bellway Corporate Events

Regulatory Filings and Compliance
Bellway Announces Updated Voting Rights and Share Capital Structure
Neutral
Mar 3, 2025

Bellway p.l.c. has announced its current issued share capital, which consists of 118,982,550 ordinary shares with voting rights, as of February 28, 2025. The Bellway Employee Benefit Trust holds 325,114 of these shares but has waived its voting rights and dividend entitlements, resulting in a total of 118,657,436 voting rights. This update is crucial for stakeholders as it clarifies the company’s voting structure and share distribution, potentially impacting shareholder decisions and market perceptions.

Executive/Board Changes
Bellway Announces Director’s Resignation from Tritax EuroBox
Neutral
Feb 21, 2025

Bellway p.l.c. announced that Sarah Whitney, a non-executive director, has resigned from the board of Tritax EuroBox plc, now known as Titanium Ruth Holdco Limited, effective December 10, 2024. This change in directorship may have implications for Bellway’s governance dynamics as Whitney adjusts her focus following her departure from Tritax EuroBox, potentially impacting her involvement in Bellway’s strategic initiatives.

Regulatory Filings and Compliance
Bellway PLC Updates on Shareholder Voting Rights
Neutral
Feb 19, 2025

Bellway PLC has voluntarily disclosed an update regarding the control chain of a substantial shareholder, FMR LLC, a company based in Boston, USA. The update reveals an increase in FMR LLC’s voting rights in Bellway, now holding 4.8846% of total voting rights, up from a previous position of 4.7303%. This change indicates a slight shift in shareholder control, potentially impacting decision-making processes within Bellway and reflecting FMR LLC’s continued investment interest in the company.

Business Operations and StrategyFinancial Disclosures
Bellway Reports Strong Growth in Housing Completions and Financial Stability
Positive
Feb 11, 2025

Bellway p.l.c. announced a 11.9% increase in housing completions during the six months ending January 31, 2025, reflecting strong performance amidst challenging market conditions. The company maintained a robust financial position with modest net debt, a strong land bank, and a healthy forward order book, indicating their readiness to capitalize on future growth opportunities in the UK housing market. Bellway’s strategic land investments and operational strengths position it well to deliver future volume growth, supporting long-term value creation for shareholders.

Regulatory Filings and Compliance
Bellway Announces Update on Share Capital and Voting Rights
Neutral
Feb 3, 2025

Bellway p.l.c. has announced its current share capital structure, consisting of 118,982,479 ordinary shares with voting rights as of January 31, 2025. The Bellway Employee Benefit Trust holds 325,114 of these shares but has waived its voting rights and dividends, resulting in a total of 118,657,365 voting rights for the company. This announcement provides transparency in Bellway’s shareholding and voting rights status, which is important for stakeholders and market participants to understand the company’s governance and capital structure.

Bellway PLC Reports Change in Major Shareholder Voting Rights
Jan 14, 2025

Bellway PLC, a major UK-based homebuilder, announced a change in the voting rights held by FMR LLC, a Boston-based firm. FMR LLC’s voting rights in Bellway decreased from 5.09% to 4.73% as of January 10, 2025. This adjustment in shareholding could potentially influence stakeholder perceptions and decision-making within the company, affecting its governance dynamics.

Bellway Announces Updated Voting Rights and Share Capital
Jan 2, 2025

Bellway p.l.c. has reported its current issued share capital as of December 31, 2024, which comprises 118,982,479 ordinary shares with voting rights. The Bellway Employee Benefit Trust holds 325,114 of these shares but has waived its voting rights and dividends. Consequently, the total number of voting rights is 118,657,365.

Bellway Grants Long-Term Restricted Share Awards to Key Executives
Dec 18, 2024

Bellway p.l.c. announced the granting of restricted share awards to directors under its Long-Term Incentive Plan (LTIP). The awards, given to key figures such as the Chief Executive, Chief Commercial Officer, and Chief Financial Officer, are set to be held in trust until December 2027. This move aligns with shareholder interests by tying executive compensation to long-term company performance, potentially impacting Bellway’s strategic direction and stakeholder value.

Bellway’s AGM Sees Unanimous Approval for Strategic Resolutions
Dec 12, 2024

Bellway p.l.c. announced that all resolutions were approved at its recent Annual General Meeting, with both ordinary and special resolutions receiving the requisite majority votes. This successful vote outcome supports the company’s strategic decisions, including director re-elections and policy approvals, which are crucial for its continued governance and operational efficiency.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.