Bellway FY26 slides: cash flow surges 36% as margins compress

Bellway, the U.K. housebuilder, reported its fiscal 2026 results on October 13, 2026, highlighting strong sales volume growth while grappling with persistent margin challenges. The company completed 9,695 homes, a 10.8% year-over-year increase, while adjusted operating cash flow rose 36% to £868.6 million. Despite margin pressures, Bellway delivered robust revenue and profit growth across various metrics.

Revenue climbed 13.6% to £3,145.1 million, while operating profit increased 5.6% to £320.6 million. However, operating margins narrowed by 80 basis points to 10.1% as cost pressures overwhelmed revenue gains. The company's land bank composition suggests a gradual margin recovery over time, with higher-margin land flows expected to begin materializing in fiscal 2028.

Cash generation surged, with adjusted operating cash flow increasing 36% to £868.6 million, driven by working capital improvements and efficient land utilization. This cash was deployed in land investment, legacy safety expenditures, and shareholder returns, including a dividend increase and buyback program. Looking ahead, Bellway anticipates completing between 9,000 and 9,400 homes in fiscal 2027, with modest price stability and a higher social housing share.

The company plans to return around £225 million to shareholders through dividends and buybacks over the next year.