UK homebuilder Bellway hopeful of recovery, half-year profit slumps

(Reuters) -British housebuilder Bellway retained its annual home-building targets on Tuesday, after posting a 57% slump in half-year profit, as an improvement in demand in recent months fuelled hopes of a recovery in the housing sector.

The British housing market has seen signs of stability at the start of 2024 on easing mortgage rates after battling subdued demand for most of last year, but the delay by the Bank of England in lowering interest rates and incessant macro-economic concerns have tempered hopes of a better-paced recovery.

"Although the economic backdrop remains uncertain, the gradual reduction in mortgage interest rates throughout the first half has helped to ease affordability constraints ... encouraged by the improvement in reservations since the start of the new calendar year," Bellway CEO Jason Honeyman said.

The company's private reservation rate jumped 20.7% to 163 per week in the six weeks since Feb. 1, compared with the same period a year earlier.

Bellway, which constructs everything from one-bedroom apartments to six-bedroom family homes and luxury penthouses, cut its interim dividend payout to 16 pence per share from 45 pence a year earlier.

The company reported underlying pre-tax profit for the six months ended Jan. 31 of 134.2 million pounds ($169.8 million), compared with 312.1 million pounds a year earlier.

($1 = 0.7905 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Shounak Dasgupta)