Expectations high ahead of Bellway’s report

Bellway will report its full-year figures on Tuesday 14 October, and analysts are expecting revenue of £1.46 billion and earnings per share of £1.51.

Houses
Source: Bloomberg

Bellway is trading at £14.64; the share price is down 8.6% since the company posted its first-half results in March. The homebuilder revealed revenue of £701 million and EPS of £0.66, while traders were expecting £639 million and £0.61 respectively. The company increased its dividend by 78% to 16p and the government’s help to buy scheme is still boosting demand. The homebuilder raised its sales outlook up until the end of July, from a 15% increase to a 20% increase.

The average price of a Bellway home has increased by 13% to £212,071, and southern England now makes up a larger portion of Bellway’s business. Last year 58% of group revenue was attributed to ‘the South’, now it accounts for 62%.

Equity analysts are very bullish on Bellway. Out of the 17 recommendations 12 are buys and five are holds.

The recent decline in the share price has more to do with fear that the UK property market (particularly southern England) is overheating, rather than the fundamentals of Bellway. The 100-week moving of £13.95 is proving support and if the results meet the high expectations the stock could target £16.40.

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