Bellway’s revenue dips 31% to $3 billion in year ended July 31, ET RealEstate
British homebuilder Bellway reported a smaller-than-expected drop in annual revenue on Friday and said buyer confidence was improving following a drop in mortgage rates.
British homebuilders, hit by a prolonged cost-of-living squeeze, are set to benefit from the first cut in UK interest rates in more than four years.
Many UK mortgage lenders cut rates in anticipation of the long-awaited move earlier this month, although the Bank of England played down the prospect of a series of rapid cuts.
“Customer confidence has improved, driven by a moderation of both mortgage interest rates and consumer price inflation, and an increase in wages,” Bellway said.
The brighter outlook comes as Britain’s new Labour government plans to tackle a chronic housing shortage by easing planning restrictions and boosting land supply.
Bellway said its annual revenue fell about 31% to 2.35 billion pounds ($3 billion), ahead of analysts’ average forecast of 2.27 billion pounds, according to LSEG data.
Its annual underlying operating margin is expected to be about 10%, down from 16% a year ago, the company said in a trading update.
Bellway, which constructs single room apartments to luxury penthouses, said its forward order book – a key industry metric gauging demand – stood at 1.41 billion pounds at the end of its financial year, compared with 1.19 billion a year earlier.
Bigger rivals Persimmon and Taylor Wimpey have forecast annual housebuilding numbers towards the upper end of their guidance range, underscoring market expectations of a recovery in demand.
