Bellway PLC (BLWYF) (FY 2024) Earnings Call Highlights: Navigating Challenges and Embracing ...

GuruFocus News
4 min read

In This Article:

  • Revenue: Reduced to GBP2.4 billion due to lower private completions and weaker trading conditions.

  • Average Selling Price: Moderated to almost GBP308,000, with a forecast of GBP310,000 for FY25.

  • Operating Margin: Underlying operating margin was 10%, with an expectation to approach 11% in the next year.

  • Operating Profit: GBP238 million, reduced mainly due to a decline in volume.

  • Gross Margin: Lower at 16%, affected by incentives and higher site-based overheads.

  • Admin Costs: Flat at GBP142 million, with an expected increase of up to 10% in the coming year.

  • Net Debt: Year-end net debt was GBP10 million.

  • Net Loss from Joint Ventures: GBP2.3 million, offset by a positive trade and performance.

  • Finance Charge: Underlying finance charge was GBP9.7 million, expected to increase to around GBP16 million.

  • Tax Rate: Increased to 29% due to a rise in UK corporate tax rates.

  • Dividend: Proposed final dividend of 38p per share, totaling 54p for the full year.

  • Order Book: Over 5,100 homes valued at GBP1.4 billion, an increase from the previous year.

  • Volume Output: Expected to deliver at least 8,500 homes in the upcoming year.

  • Land Bank: Owned and controlled land bank of around 49,000 plots, with a strategic land bank of 45,500 plots.

  • Return on Capital Employed: Low at 6.9%, with a long-term annualized compound return of 13.6%.

Release Date: October 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Bellway PLC (BLWYF) has a strong balance sheet with low gearing and significant investment capacity, allowing for future growth.

  • The company has a healthy land bank with over 95,000 plots, supporting its multiyear growth ambitions.

  • Bellway PLC (BLWYF) is set to deliver at least 8,500 homes in FY25, with a focus on private sales driving growth.

  • The company is investing in a new timber frame manufacturing facility, which is expected to enhance build speed, quality, and reduce carbon emissions.

  • Bellway PLC (BLWYF) has a strategic focus on organic growth, supported by a robust land and outlet position, and plans to reopen its South Midlands division.

Negative Points

  • The company's housing revenue decreased to GBP2.4 billion due to weaker trading conditions and a lower order book at the start of the financial year.

  • Operating margin was reduced to 10% due to lower volumes and continued use of incentives.

  • The average selling price moderated slightly, impacted by mix changes and the use of incentives.

  • Bellway PLC (BLWYF) faces challenges with building safety costs, with an anticipated expenditure of up to GBP100 million in FY25.

  • The company is experiencing some market hesitancy due to potential interest rate changes and concerns around the October budget.

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