Bellway Earnings: Shares Remain Compelling Despite Near-Term Housing Cycle Woes in Fiscal 2024

Bellway’s full-year fiscal 2023 result provided us with little surprise with the delivery of 10,945 home completions and GBP 533 million in adjusted profit before tax, aligning with our fiscal 2023 financial estimates. Bellway also weighed in on the near-term outlook, confirming what we’d already expected—that fiscal 2024 will be a tough year for the no-moat homebuilder amid presently glum housing U.K. market conditions. We expect to lower our fiscal 2024 estimates based on build cost inflation and corporate overhead guidance provided by Bellway that exceeds our current forecasts. Still, with our long-term expectations unchanged, we do not expect any impact on our GBX 3,750 fair value estimate.