Bellway Share Chat (BWY)

I recently bought some shares in bellway, I got a warning saying shares were volitlie, was a bit surprised at this, seen it before with entain, it nearly put me off but here I am, any thoughts on this? Seems a very intelligent mb compared to some I've been on.

Bellway have guided 10.5% for this year. Persimmon top at over 20%, the others inbetween.

The point you are missing is that Bellway targeting volumes and up North ie cheaper

Also BV includes land at realisable value so discount very relevant.

Yield over 5% for me.

“There was a time when NAV was a useful guideline,

it no longer appears to be the case”

……………..

FP,

I would say that you are essentially making the same overall point as I was in my recent flurry of contoversial comments here ~ so perhaps you are on the same song sheet as me on this…?

Before covid, Bellway’s average return on equity was 16% (and that’s long term ~ going right back to the ‘80’s) and while the price to book moved around a lot due to big fluctuations on share price, it averaged somewhere in the region of around 1.3.

So, put those two numbers together and you get an average overall price earnings ratio of around 8, despite that the actual number tended to move around a lot given the high share price volatility of Bellway and the sector generally.

Whereas, for the past two years, the reality check return on equity has only been 5% ~ and it’s looking similar for this year.

If the return on equity doesn’t significantly improve, in order to maintain the long term average price earnings ratio of 8, the price to book value would have to be right down to 0.4.

I am not imagining that the return on equity will stay that low, and the scribblers have it as improving to 7.2% for 2027…

But that’s still only a price to book value of around 0.6 to get to a P/E of 8.

Whereas, if they in fact do better than that, but the market holds the share price pegged back to still being around where it is presently (i.e. around 0.6) then, at that point, I would say that for me Bellway would be starting to look something like fair value based on its historical pricing..?

What do you think..?

After all, you have expressed a concern that NAV (and, presumably therefore, PBV?) is no longer a useful guideline, but do you, as above, instead insert P/E as your main alternative yardstick..?

Strictly

And this is because..

If you look at the UK REIT sector, there's huge persistent

NAV discounts for the majority of sector businesses.

The market is far more interested in cashflow.

There was a time when NAV was a useful guideline,

it's no longer appears to be the case

Not for me. Almost lost my shirt in crest yesterday and now thanking my lucky stars I sold out of that not so long ago.

Just goes to show what appears to be undervalued can quickly become much more “undervalued”.

Same path again Reg, here?..

Time for Bellway to kick on now, especially as expected interest rate rises may not materialise if a deal can be reached in the middle east.

Could be good for £24-25 in next 6 months.

Thanks for the clarification on the intra-day low.

Whoops,

The intra day low was £15.70 on the 12th of October. Ironically, one day before another memory someone asked about only the other day on another site.

Anyway, have a great weekend Bellwayers..

Morning,

I’ve a busy weekend ahead so shall re visit all this on Monday and hope to get some thoughts/feedback.

sg, it’s encouraging to hear the ‘family’ are confident.

The instead day low, these figures always get stuck somewhere in the grey matter. I had to find out,

Not sure it went a slow as that Crossley (you may be right intra day?) but yes it did drop to low £17's very briefly, so must admit, missed that.

My views are based on a pre conflict price of around £28 and generally rising, of course there will be some inflationary impact for a while when the middle east debacle ends and personally I don't see this continuing for more than another month. Even factoring that in, a 10-12% drop from £28 would cover that adjustment IMO....That leaves us at £24.50 - £25.50....not forgetting that Bellway has a NAV of around £30 per share.

More generally, yes, I see prices continuing to rise, albeit slowly. The inescapable fact is that there is a huge shortage of housing and a commitment to build more. I mentioned earlier that my wife has worked at Bellway for a number of years and has witnessed all events good and bad, since 2007, however prior to Feb 28th there was a very positive view within the company....knocked slightly since then but there seems to be a pragmatic view that this is blip rather than a long term concern.

Personally I have sold other holdings to give me the ammo to build a decent position here, so far 5,750 shares but will look to double that over coming days and weeks whilst we are at this price or up to £20/21

There's no way I'd be doing that if my wife was coming home with tales of doom and gloom every day.

Maybe sg,

It could still go lower though. In 2022 didn’t it hit mid £15’s around the time of the Truss budget?

I did set a cheeky after hours buy at £17.75 to see if the U/T might drag it down, alas, it was cancelled.

Two questions,

1:Do you not see build cost inflation rising due to the conflict?

2: Do you see asking prices continuing to rise?

"I appreciate you taking the time to share your thoughts"

...........................

FP,

You're welcome ~ even though my thoughts didn't seem to be universally well received here...? ☹

Strictly

I appreciate you taking the time to share your thoughts

Good fortune

That's to the best of my knowledge and it may have been fleeting.

What I can't confirm is whether that area is a closing, or intra-day low, if it's a closing low, the intra-day may be lower down.

Gilt yields are causing a lot of the damage to the sector currently..

Take a look at the yield on the UK 30-yr to see why this

is happening

That spills over in to mortgage rates.

Effectively what's happening currently is credit conditions are

tightening, it will be the same for commercial lending and

ultimately consumer credit.

The longer this ....show goes on for, the greater the damage done

and it won't be repaired overnight either on a ceasefire

Reg,

Yes, I suspect that we may be on different songsheets, but never-the-less...

2020 and 2021 were very poor years for Bellway, with ROEs of 6.5% and 5.3% respectively, easily put down to the triple headwinds of covid, cladding and Gove....

2022 looked like recovery, with an ROE of 15.5%.

Then it slipped back again for 2023, to 10.4%...

Up to that point, I had philisophically put it down the the above mentioned three riders of the apocolypse, i.e. Gove etc., but by early 2024 I had come to a different view...

Which was that these weren't just temporary headwinds, but likely a longer lasting market situation that didn't then, and still doesn't, favour house builders...

Of course I could be wrong, but I voted with my feet and reluctantly put my money elsewhere...

"Relucantly" because I thought that investing for me now in my seventies was now sorted, and that all I had to do was continue to dap between house builder shares as perceived opportunities to trade arose in order to continue to earn a decent crust from investing from here on...

However, instead, I had to dangerously venture out across the sea bed to find another investing hermit crab shell to dwell in ~ the insurance boys ~ which was all a bit traumatic for an investing wimp like me....

But, to come to your point, in early 2024, given that I now saw the headwinds to be something more than that, I came to the view that Bellway et al were hugely overpriced for their near and likely medium term performance.

And, okay, the price has dropped a lot...

But I'm still seeing them as being overpriced...

Clearly that has naffed off a few folk here, but then I'm not giving investing advice, just a personal view, and people can decide whether or not what I have to say has any worth or even not bother to read my comments if they think I'm talking complete b.llocks....

But, for better or for worse, I do generally back up what I'm saying with numbers....

And if someone thinks I've got any of those wrong, I'd welcome becoming enlightened as to where I've erred...?

Strictly

Strictly,

I’m not sure we’re singing from the same hymn sheet. Maybe I didn’t put my point across very well.

While the EPS may have dropped slightly since last year, the investment opportunity I see today is better than the opportunity 6 months ago for 1 simple reason.. the share price has dropped far more than the drop in EPS.

Also I guess comparing the first half to the second, you have to consider the seasonal effect. Less demand around Christmas etc. The profit for the year has actually increased slightly.

Another c.£75 million of share buybacks planned will also help boost the share price back up.

I see the company just as strong as it was 12 months ago, albeit 20% cheaper due to the fear coming from across the pond. This will pass. All I see at this price is a good buying opportunity.

Hope you’re well too Crossley. Our paths always cross just after a big dip. Great minds think alike 😃

"A lot of shares have been bought back since 6 months ago, so there are considerably less shares in issue, which should push the value up..."

.......

Reg,

The BVPS of 3,005p, for 31/1/26 ~given by Bellway and with which I concur in the way I calculate and check the figures ~ is based on the net equity of the company divided by the shares in issue at that point in time, so will include all the share buybacks up to that point.

Obviously we'll have to wait for the full time whistle later this year to see what that actual ROE is for 2026 as a whole..?

I would add that I have tracked the progress of the book value of a single share for Bellway, adjusted for dividends paid, right back to when Bellway first came to the stock market in 1983 with a BVPS of the princely sum of 51p.

It hadn't occurred to me to start tracking this until around 2003, having started managing my own investments several years previously in early 2000.

However, it was Bellway's splendid track record which shined through looking at them on this basis which led me to start investing in them in a big way in 2003...

And that continued right up until early 2024, when the same number crunching process led me to sell all my Bellway shares in favour of investing in the insurance boys at that point.

At the time of selling, I had been briefly 100% all in Bellway having only shortly before sold out of Redrow upon Barratt's takeover bid for them.

In a nod to SG, and bearing in mind that I was only able to look in from the outside taking into account the numbers, the spiel and the track record, I considered Bellway and Redrow to have been the two best run house builders out of the big boys (well, in Redrow's case, only after Steve Morgan had returned).

Now that Redrow has gone, Bellway for me stands alone in pole position.

Despite some cynicism expressed here, I do have an affection for Bellway as a share ~ they were my benchmark company for many years and I also like that Jason Honeyman is a fellow London boy who also worked his way up in life without going to university ~ the sort of thing that gives me faith...

I am very concerned for the future economic health of our country, and especially for the house building sector, and I don't perceive from where any decent bottom line is going to reappear from for them for the forseeable...?

Of course, I could be being too glass half empty...?

So I guess we just have to see how things unfold...?

Strictly

PS. And thanks, Crossley, for your comments earlier.... :-)

Evening,

Yes, a decent bounce after a truly awful day.

I must say though, I've just read what's been written here over the last day or two, and I personally think it's a bit out of order to be honest.

Someone asks Strictlybricks for their opinion on the update, that they kindly take the time to give. The ones that do not like what has been written, then go on to say there's an ulterior motive. What's that all about? I for one welcome two sides to a story, so long as it's constructive.

On another note, hello RM, I do hope you're well. I seem to remember our paths crossing many moons ago over on CRST.

I hope the days have treated you well. Let's hope for brighter and more stable days in the near future.

Best of luck moving forward

Strictly,

Always value your posts, but I think you’re missing 2 things in your methodology.

1. A lot of shares have been bought back since 6 months ago, so there are considerably less shares in issue, which should push the value up, but:

2. The share price has actually fallen around 30%.

If you want to consider the value of the share, I think your figures have to be based on the share price at each point in time rather than the equity figure.

Recovered a nice chunk of yesterday's fall.

Bit of good news from the middle east, inflationary concerns recede, and we'll soon be back to a realistic (IMO) price, which has to be £24+ as a minimum....happy days!

Agreed. Stop talking down the share strictly

I did, which is what led me to that conclusion.

Why would I want to debate?

I've invested my money based on my own research and knowledge, I'm hardly likely to change my mind based on one person's opinion or analysis which seems to be focused on one metric and very little else.

Let's see where the SP goes over the coming weeks or months to determine which view is correct....any further discussion on this is a waste of time.

SG - may I suggest that you take some time to review Strictly's previous posts over the years and take an impartial view of them and the latest ones? Strictly's position has been very consistent.

Your wife may well work for Bellway and have some inside knowledge (I don't mean equivalent to insider dealing) that gives you comfort though Strictly is reviewing the public info so his investment decision (ie not to be currently invested) is driven differently to your own. Doesn't make either of you wrong or right - end of day, always DYOR. Strictly has even offered to engage in debate on the numbers.

Strictly - thank you for your input. And for coming back on this board after seeing someone else requesting your view on the latest results.

No, it doesn't.

When you make remarks like 'the underlying performance is so poor', then it's clear you have an agenda, as that is garbage.

My wife works and Bellway so I know the company imtimately and have invested in and out of the share for some time. At a price point of £18 this is cheap.

Your post is nothing more than a clumsy attempt to talk the SP down, anyone with any sense would see right through this.

"You have to question the motives of anyone who takes the time to post on a messageboard when they claim not hold any position.....why bother?"

..................

SG,

Because, as I said below, it was a share I was very much involved with for around twenty years, is one that still interests me (especially as some in my investing group still hold them), and one that I therefore still keep close tabs on...

And, hopefully, it's one I'll be back in at some point in the future as, if and when their prospects improve because it had a splendid track record for nearly forty years up to hitting the headwinds of covid, cladding and Gove, but in my view it isn't appropriate to be invested there now because the underlying current performance is so poor and although the share price has dropped significantly it hasn't gone down fully in step with the much lower returns...

So ~ hopefully that reasonably answers your question "why bother?"

And I'm happy to debate the numbers if you think I've got them wrong...?

Strictly

Not sure what the buying opportunities will like tomorrow Couerdelion....if the rumours we're seeing now are credible then I'd expect this to sail past £19 early on and be back into the £20's within the week. Hopefully you get the price you want.

Couerdelion,

nothing to do with .. obsession,

it's trying to give yourself the most

profitable opportunities..

You can buy cheap, or you can buy cheaper. Nothing wrong with cheap.

I was hesitant to buy today but I think I will be lined up tomorrow to get some at these prices. It may not be cheapest but who's going to be that obsessed?

Barratts trading a c.40% discount to tangible assets versus 30% Bellway. Barratt margins c.8-9% as it integrates Redrow versus 10.5% Bellway as of today.

Worth watching Bellway’s Presentation. Sales holding up well, March good, April might be slight softening. Nothing too worrying on build cost inflation but bricks could be a concern if crisis protracted.

It’s obviously early days re crisis so the above could easily change. However a vast amount of potential bad new now factored in.

I’ve been buying today, not smart enough to call the bottom but attractive risk reward down here.

Agree we need director buying tomorrow to de-spook the markets!

Yes that would definitely help, as would a director purchase or two.

It's fallen a long way but the whole sector is being hammered down. Increasing interest rates, material and labour costs increase, cost of living crisis, mortgages all in the mix

Good fortune.

I bought a very small amount before the close and also BKG.

I already hold a small position in BTRW at 3% above today's close.

There's definitely a macro hit to come, degree and duration we don't yet know

Hi Fats I bailed there yesterday.

I was fortunate to buy Airlines , travel stocks, WPP yesterday when everything was marked down on open. When the market spiked sold everything. Now 100% cash.

I dont like Vistry.

Bellway looks interesting though. I might put some buy orders in at low 17s and see if they trigger tomorrow morning .

I hope you understand the risks on fixed price contracts...

Because that can turn very nasty indeed..

I'm speaking in general terms, just to be very clear

Yes

If you look at Taylor Wimpey, Vistry, Barrat Redrow, Persimmon.

All down between 20 to 50% recent months .

They always say don't catch a falling knife.

Unloved sector at present and the way the economy is going could be sometime before they are looked at more positively

Apart from one brief blip in 2022 Bellway haven't been at this price in over a decade....are things really that bad?

£17.63 close

Are you looking at the wider sector valuations...

Because viewing BWY alone gives half a picture.

However, fats is in just before the close..

My buy target is currently 1745p. If not reached this week, I may consider buying Vistry instead. Both have fallen disproportionately when compared with other house builders.

Never buy on the 1st day of the drop.

Wouldn't be surprised to see the U/T below £18 later

On the watch list for me...

GLA

*read like that (not real)

OK, fair enough fp.....just didn't real like that.

It's certainly possible it could hit those levels, though IMO it's very unlikely. I think it's a gift at these levels, unless you believe that the middle east situation will deteriorate and still be an issue in 3-6 months time, if it isn't then clearly this soars back very quickly to a realistic SP.

Hi

I understood exactly what you said in the earlier post..

My thoughts are..we may revisit that area again..

Think you misread the post fatprofits.

I merely stated that a few years ago the SP dropped to a crazy £17.50, which I bought at and made hood profits.

I don't believe it will fall that far again.

£19 seems dirt cheap; Today's update was ok, considering the circumstances. If middle east situation is sorted out the this goes back to £24-£25 fairly quickly.

FYI I've added a further 750 shares just minutes ago.

..why would Bellway now revisit sub £18 again..

Look at BTRW

Bellway ($BWY) will initiate the first 75 million-pound-sterling tranche of its share repurchase program worth 150 million pounds on Tuesday, according to a same-day filing.

Might be a small impact from the ongoing and 2nd stage buyback, goung forward ?!

"The repurchases under the first tranche, set to run until April 30, 2026, will be carried out by Citigroup Global Markets. All repurchased shares will be canceled to reduce the British homebuilder's share capital.

The completion of the share repurchase program is Oct. 31, 2026."

Thanks

Underlying operating profit +1.5% to £159m. Volume output in FY26 is now expected to be ahead of previous guidance at between 9,300 and 9,500 homes. Average selling price anticipated to be £325k (previously £320k) due to product mix. On track to deliver FY26 underlying operating profit within the range of £320m - £330m

Down 8%.....entire sector has gone banana's

Just to let everyone know: Bellway shares are now on sale in the great Spring clearance.

Housing market set to stagnate and new house building to grind to a near standstill under Labour's new tax grab Capital gains and inheritance plans in Budget..? Adyor!

https://youtu.be/B1_x20M3mfo?si=o7nr0VLD_0Yx1twx

Mansion tax fears turning housing market into ‘stagnant swamp’ https://www.telegraph.co.uk/politics/2025/10/27/housing-secretary-refuses-four-times-rule-out-mansion-tax/

Looks like The Socialist nutters in government Starmer, Reeves, Raÿner, Milliband etc are about to crash the housing market with Capital gains tax on primary residence sales and an annual property tax!!!! They're coming after your hard earned cash again!!!!!!!😲 JAO Adyor

Labour’s Capital Gains Tax threat "is complete madness" https://share.google/HZWCZQtIpenfoDXPU

Over the years, from time to time, I have put up what I consider to be the “reality check” figures for Bellway for consideration here…

I’ve been a fan of Bellway for more than twenty years and, at times, have been fully invested with all of my capital into just this one company.

But times have been tough for house builders for the past six years, and I currently don’t hold shares in any house builders ~ though I still follow Bellway closely…

So, here are the numbers I have for them from the full time whistle this morning (hopefully no schoolboy errors or, these days, senior moments with the calculations?).

Net equity at £3,556.3m divided by 118.992m shares in issue = 2,989p BVPS as at 31/7/25.

Plus divs paid in the year of 39p & 21p = 3,048p, less BVPS b/f at the start of year (calculated the same way) of 2,903p = reality check 2025 EPS of 145p.

This is better than the declared EPS of 132.8p but some way short of the scribblers’ most recent prediction of 168p.

The directors typically put a brave face on things, but the following line from the report maybe nails it..?

“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”

Along with

“In the ten weeks since 1 August, the private reservation rate per outlet per week excluding bulk sales was 0.48 (1 August to 6 October 2024 - 0.49). The private reservation rate including bulk sales was 0.51 (1 August to 6 October 2024 - 0.60).”

The scribblers have 2026 down for an EPS of 188p… this to me is looking quite optimistic in the light of the couple of lines copied & pasted above from the report given the 30% leap in EPS required.

The 2025 return on equity was just 5% and the P/E is currently 17.

Still way too expensive for the likes of me, guv… ☹

Strictly

Bullish daily outside price bar of 23/9/25, enables projected future sp target of 2656, calculated as outside bar range X 2, added to outside bar high. However there is overhead supply from previous trading volume between 2612-2700, which may cause selling resistance to upward progress.

The sp today has rallied above bearish outside price bar of 8/10/25, high 2526. The bearish outside price bar can be expected to reverse it's downward sp forecast, if sp can find support above it's high of 2526. In which case the future sp forecast target would be 2726, calculated as outside bar range X 2, added to outside bar high. DYOR.

Surely if they are relatively confident about the future, they would be investing the £150m rather than buying back shares. The reality is that Rachel has killed the housing market, so Bellway and others will just tick over until such time as sense prevails.

Looks a good set of results to me. They seem relatively confident for the future, increased dividend and buyback. Only small snag, short term sales which is unavoidable with the state of the place. And £500m still to pay ( so far ) on remediation. Always seem to be the star of the sector, as much as possible. Positive market response when it opens?

Mortgage approvals down, new builds downToday. Labour's High Tax and Spend policies are destroying the housing market as sales of houses slump due to budget tax uncertainty, High Stamp Duty, Inheritance Tax etc etc, welcome back to the 1970's...don't say you weren't warned about Starmer, Reeves and Rayner's High Tax Socialist agenda...!!!

https://www.thetimes.com/business-money/economics/article/budget-fears-have-put-housing-market-in-state-of-semi-paralysis-m5gt8pjkp

Housing sector is finished for the next four years as Starmer and Reeves run the UK economy onto the rocks, as Bond Yields sky rocket and £ slumps..Greece 🇬🇷 has a better financial position than the UK...bring back Lizz Truss snd Kwasi Kwartang all is forgiven!!! 😆 🤣 😂

"Yes more luck than judgement been in and out of Taylor Wimpey but effectively treading water"

.........................

Sain,

Well, if you trod water investment-wise through 2022 then well done to you Sir...!

Strictly

Yes more luck than judgement been in and out of Taylor Wimpey but effectively treading water

Sain,

Without getting too much into this here, did you manage to swerve the down wave of 2022 then...?

I dropped 37% that year ~ my worse year percentage-wise sine the credit crunch, and my worse year ever in terms of cash amount down....

Took me the next two years to make back the ground again ~ so that was three years in all of Incy Wincy Spider time, though 2025 has been a good year so far (well up to the end of last week, at any rate.. ☹ )

Strictly

Excellent TU and embarrassing reaction from the U.K. stock exchange. No wonder so many people trade stocks these days.

Sparks,

Labour talk a good game of course ~ there seems to be nothing they like better than to ejaculate into each other’s earholes ~ but a couple of things to bear in mind...

Firstly, our Ange is talking about committed build out rates once planning consent has been given…

Don’t they learn from history…?

That’s what the house building sector got away from following the credit crunch, to get themselves safe…

As we know, they now effectively build to order, and take proper deposits with signed contracts…

Whereas, a build out rate independent of sales rate would surely be a regression back into a riskier business model…?

And a little while back ~ though to be fair I haven’t come across it again elsewhere ~ I read (I think in the Telegraph online?) that Labour were considering going for net zero on new builds and that that had been tried and has been seen to be failing in France…?

Given the state of the economy and the shift of priorities to some extent in younger generations when it comes to what they’re prepared to give up in order to be able to buy a home, I don’t see how the level of house building for private ownership can increase dramatically without throwing more subsidy at it in some way…?

Or we increasingly become more of a nation of renters….

Plenty of WEF conspiracy stuff around all that…!

So, there’s a few rabbit holes I’m not intending to dive down, and the short story is that my intention is to keep out of the way of house builder shares until and unless that not only is there more clarity but also that there is more good news within it than seems likely to me at the moment…?

It has been a big deal for me personally, letting go of house builder shares early last year…

If I’d stayed in Bellway & co, I’d have still been now more or less the same in terms of gain where I was then, but shifting to the insurance boys in early 2024 has given me around an overall 70% gain over that time….

So, I’m a very happy bunny with that..!

Strictly

* 3 year

Hi Strictly. The ROE observations you make are valid. I do see the company as a 3 recovery play. I'd hope loosening of borrowing rules, planning restrictions, lower borrowing rates will, eventually feed into ROE. Labour made house building the foundation of their growth agenda manifesto. House building targets are being missed so far. Thus, I can smell another help to buy scheme bubbling up in the autumn budget. The budget may well be take with two hands and give back with one. This could be part of the give back.

Https://www.lse.co.uk/news/BWY/bellway-completions-rise-14-in-fiscal-2025-h42majws2w5wp30.html