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2023 03 28T074240Z 2 LYNXMPEJ2R07L RTROPTP 4 BELLWAY RESULTS - Business Express

UK’s Bellway to buy back shares, hike social housing output

By Aby Jose Koilparambil

(Reuters) -UK’s Bellway will build a bigger share of homes in its social housing programme this fiscal year, its chief said on Tuesday, after the housebuilder announced a 100 million pound ($123.1 million) share buyback despite a fall in interim profit.

A recent uptick in buyer sentiment has not entirely allayed slowdown concerns in the British housing sector, amid higher mortgage rates and economic woes, forcing housebuilders to turn to cheaper homes in a bid to revive demand.

Chief Executive Jason Honeyman told Reuters the company started hastening construction in its social housing programme in October after a demand slump.

September’s ill-timed mini-budget from then-finance minister Kwasi Kwarteng led to a rout of government bonds, pushing up the cost of borrowing for lenders, and causing turmoil in the mortgage market.

Honeyman said homes built in the programme would make up more than quarter of overall output in the fiscal year ending on July 31. Affordable homes were 18.4% of total production in the previous fiscal year.

Bellway, which builds everything from one-bedroom apartments to six-bedroom family homes and luxury penthouses, said there was a moderate improvement in bookings since January.

It retained its annual production outlook of 11,000 homes, about 2% lower than a year ago.

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Potential rate cuts next year by the Bank of England would improve affordability and housebuilders such as Bellway would welcome such a move with open arms, Adam Vettese, an analyst at social investing network eToro, said in a note.

The FTSE midcap firm said its forward order book by March 12 was 1.60 billion pounds, well below the 2.21 billion of a year ago.

Its half-yearly underlying pre-tax profit fell about 5% to 312.1 million pounds.

Bellway shares edged up about 1% in morning trade.

($1=0.8121 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips)


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