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Three Quick Facts: Bellway, THG, Rolls-Royce


Three things you need to know in the financial markets today from investment writer, Tony Cross.

#1. Bellway: mortgage, inflation headwinds continue to drag

Bellway LON:BWY has issued preliminary full year numbers this morning for the period to 31st July, noting a 2.3% reduction in completions and a 3.7% drop in revenues. However profitability has been hit somewhat harder, down 12.7% on an underlying basis, with return on capital employed dipping 360bps.

Management describe the performance as resilient in the face of mortgage headwinds, adding that the company has a robust landbank and balance sheet, but reservation rates are down by 28%. With this in mind, the company forecasts 7500 completions for FY24, down from almost 11,000 in the comparative, with inflation pressures persisting too, in turn keeping margins squeezed.

#2. THG Q3 results show revenue improvements

There are Q3 numbers out from THG LON:THG, noting revenues down just 2.1% on a constant currency basis, making for the best performance in the last year. The plans to return to sales growth and rebuild margins are reported as being delivered against, underpinned by investment in the customer proposition. That includes a 17% improvement in delivery times against Q3 ’21 – so two years ago – but as always the question is whether this will be sufficient to win over investors.

#3. Rolls-Royce job losses to come in efficiency drive

Rolls-Royce LON:RR. has announced plans to further streamline the organisation, with the loss of between 2000 and 2500 jobs worldwide, whilst strengthening its capabilities to ensure operational and commercial skills match its goals of engineering and technical excellence. That equates to around a 5% headcount reduction, but the note includes no assessment of the one off costs that may come with such a move.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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