Bellway

Website: Bellway
Index: FTSE 250
EPIC: BWY
Supersector: Personal and Household Goods
Sector: Household Goods and Home Construction
Subsector: Home Construction
Market Cap: £2.05B
Payout Frequency: Semi-Annual

Bellway Dividend Analysis and Summary

Key dividend details

Interim dividend declared: 23.0p per share (up +9.5% year-on-year vs 21.0p)
Ex-dividend date: 21/05/2026 (Thursday)
Record date: 22/05/2026 (Friday)
Payment date: 01/07/2026 (Wednesday)
Expected FY26 underlying dividend cover: 2.5x
Estimated cash cost of interim dividend: ~£27.0m

Supporting financial context

H1 underlying operating profit: £159.0m; FY26 guidance: £320m–£330m; margin expected around 10.5%.
H1 adjusted operating cashflow: £314.1m, with a “significant” increase targeted in H2.
Balance sheet: modest net debt of £72.0m; adjusted gearing (incl. land creditors) 10.3%; ample committed facilities.
Capital returns: ongoing £150m share buyback (c. £64m executed by 13 Mar 2026; first £75m tranche irrevocable; second £75m approved 19 Feb 2026). Shares bought are being cancelled, modestly reducing share count and supporting per-share dividends.
Policy: “sustainable ordinary dividend” with ongoing return of excess capital when appropriate.

Analysis: sustainability and trajectory

Sustainability: The interim uplift to 23.0p appears well-supported by solid H1 cash generation, low gearing and visibility from the forward order book. The stated 2.5x underlying cover target indicates prudent payout discipline.
Growth trajectory: DPS growth of +9.5% at the interim stage, combined with continued buybacks, points to a shareholder return strategy biased to steady, sustainable growth rather than aggressive payouts while margins remain mid-cycle.
Operational support: Completions up 2.7%, ASP higher, and FY26 volume guidance raised (9,300–9,500 homes). However, incentive use and margin pressure cap near-term upside, suggesting a measured dividend growth path aligned to cash generation.

Structural or policy items affecting future dividends

Share buyback (£150m): Reduces share count (117.24m shares at 31 Jan 2026), supporting DPS and offsetting earnings volatility; Board expects to continue returning excess capital in future years.
Capital allocation framework: Running with modest average net debt and low year-end gearing (=5%) to balance investment, legacy obligations and shareholder returns—supportive for maintaining dividends through cycles.
Brand consolidation: Phasing out the Ashberry brand over 3–4 years; not directly affecting dividends but indicates efficiency focus.
Timber frame facility investment: Intended to improve build efficiency and RoE over time; near-term adds to admin costs but should support long-term cash generation.

Risks and flags to dividend stability

Legacy building safety cash outflows: Remaining provision of £506.5m with bulk of spend over next five years; manageable but a multi-year call on cash.
Market volatility: Mortgage market fluctuations and macro uncertainty (incl. Middle East conflict) could dampen demand and pressure margins; incentives currently at 4.5%–5.0%.
Margin pressure: Underlying margin guided to ~10.5% for FY26 amid cost inflation and sales incentives; limits scope for rapid DPS expansion.
Rising overheads: Admin expenses increasing (new operations and retention costs), weighing on near-term earnings cover if revenue softens.
Regulatory/tax: RPDT continues to weigh on effective tax rate (~28.7%); no change to policy but reduces distributable earnings.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
04/12/2025	14/01/2026	Final	49.00p	GBX
21/05/2026	01/07/2026	Interim	23.0000p	GBX

Total (Annual Dividends Per Share): 72.00p

Dividend Yield = Annual Dividends Per Share (72.00p) ÷ Share Price (1873p) = 3.84%

Ex Dividend Date	Payment Date	Type	Amount	Currency
21/05/2026	01/07/2026	Interim	23.0000p	GBX
04/12/2025	14/01/2026	Final	49.00p	GBX
22/05/2025	01/07/2025	Interim	21.00p	GBX
28/11/2024	08/01/2025	Final	38.00p	GBX
23/05/2024	01/07/2024	Interim	16.00p	GBX
30/11/2023	10/01/2024	Final	95.00p	GBX
25/05/2023	03/07/2023	Interim	45.00p	GBX
01/12/2022	11/01/2023	Final	95.00p	GBX
19/05/2022	01/07/2022	Interim	45.00p	GBX
02/12/2021	12/01/2022	Final	82.50p	GBX
20/05/2021	01/07/2021	Interim	35.00p	GBX
26/11/2020	08/01/2021	Final	50.0p	GBX
28/11/2019	08/01/2020	Final	100p	GBX
23/05/2019	04/07/2019	Interim	50.40p	GBX
29/11/2018	09/01/2019	Final	95.00p	GBX
24/05/2018	02/07/2018	Interim	48.00p	GBX
30/11/2017	10/01/2018	Final	84.50p	GBX
18/05/2017	03/07/2017	Interim	37.50p	GBX
01/12/2016	11/01/2017	Final	74.00p	GBX
19/05/2016	01/07/2016	Interim	34.00p	GBX
03/12/2015	13/01/2016	Final	52.00p	GBX
28/05/2015	01/07/2015	Interim	25.00p	GBX
11/12/2014	14/01/2015	Final	36.00p	GBX
28/05/2014	01/07/2014	Interim	16.00p	GBX
11/12/2013	15/01/2014	Final	21.00p	GBX
22/05/2013	01/07/2013	Interim	9.00p	GBX

Year	Interim	Final	Currency	Total	Change
2024	16.000	38.000	GBX	54.000	-61.420
2023	45.000	95.000	GBX	140.000	0.000
2022	45.000	95.000	GBX	140.000	19.140
2021	35.000	82.500	GBX	117.500	135.000
2020		50.000	GBX	50.000	-66.750
2019	50.400	100.000	GBX	150.400	5.170
2018	48.000	95.000	GBX	143.000	17.210
2017	37.500	84.500	GBX	122.000	12.960
2016	34.000	74.000	GBX	108.000	40.250
2015	25.000	52.000	GBX	77.000	48.070
2014	16.000	36.000	GBX	52.000	73.330
2013	9.000	21.000	GBX	30.000

Number of Shares:

Payment	Paid	Amount
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