Must read weekly preview: Aviva, Bellway, Entain

Two blue-chips and a FTSE 250 housebuilder are the highlights of a quieter reporting week.

Bellway full-year trading statement – Tuesday 11 August

With the housebuilding sector remaining on shaky foundations, FTSE250 member Bellway (LSE:BWY) has tried to provide some grounds for optimism by managing some of the levers within its control. 

Its June trading statement revealed that in order to maintain cash generation and asset turnover, the group is looking to unlock some of the value from its strategic land bank. This followed the vital Spring selling season which started brightly, but where customer demand waned given rising mortgage rates. Bellway had warned at its half-year numbers in March of an uncertain outlook given the ongoing conflict in the Middle East and there are signs of upward pressure on building material costs stemming from higher fuel and energy input prices, as well as some surcharges appearing within its supply chain. 

• Stockwatch: another shorted share now in a bull market?
• FTSE 100 and FTSE 250 winners and losers in July 2026

Higher for longer interest rates have joined a list of headwinds, such as consumer sentiment which has been in the doldrums for some time. In addition, there have been increasing calls from the sector for the government to accelerate the proposed relaxation of planning regulations, which is far from taking full effect. There are also general affordability concerns, particularly for first-time buyers, which need to be addressed to give this cyclical sector an overdue boost.  

The careful financial management of its assets leaves Bellway in decent shape. This has enabled the continuation of a £150 million share buyback programme, while a hike to the dividend in March leads to a respectable yield of 3.4% which is adequately covered, even if the level of the dividend remains below historic levels given a severe cut to the payment two years ago from 140p to 54p. 

However, despite its best efforts, Bellway shares have fallen by 24% this year alone, by 16% over the last 12 months and by 48% since its pre-pandemic peak in February 2020, which underlines the scale of the revival needed for the group to regain its former glories. While the group has picked up many admirers along the way and remains well-liked, there is no obvious rescue for the sector on the horizon over the shorter term. 

Entain half-year – Thursday 13 August

Entain (LSE:ENT), whose vast array of brands includes the likes of Coral and Ladbrokes, also has a joint venture (JV) in the US, BetMGM, which has been the cause of some recent disappointment which has been a major reason for a fall of 29% in the share price in the year so far.

At the end of July, the JV released guidance which suggested a deterioration of conditions Stateside, although still earnings positive and being seen as a main engine of growth for Entain in the times ahead. This followed a pop in the price at the beginning of June when there was speculation that People Inc of the US was tabling an $18 billion bid for MGM Resorts International, which in turn could lead to the company looking to buy out Entain’s stake in the joint venture.

• 20 hottest tech stocks: SpaceX, Google AI, Palantir
• How I turbocharge 9.5% yielding portfolio

Entain’s first-quarter update in April revealed that the group had beaten revenue expectations in both the UK & Ireland and Australia, and was followed by an announcement at the end of June that it had agreed to sell a 20% stake in its Central & Eastern Europe unit to its joint venture partner EMMA Capital for around €425 million, as it looks to launch a phased exit from the region.

Inevitably companies in this sector do not have a clear run, leaving their shares at the higher end of the risk spectrum. At any given time, adverse sports results can hinder profit margins, quite apart from the more ominous spectre of regulation. Betting companies are an easy target for governments aiming to raise additional income through taxes. Regulation remains an intractable thorn in the side for gambling companies, as evidenced by previous s crackdowns in both the UK and Germany as well as higher deposit limits in the Netherlands, all of which inject shorter term changes to consumer behaviour as the changes are absorbed. 

The shares remain in a difficult space, having fallen by 46% over the last year and by 74% since its September 2021 peak, and the results will present the company’s latest opportunity to assure investors that the longer term picture remains bright, particularly in the lucrative US market.

Aviva half-year – Friday 14 August

Aviva (LSE:AV.)’s most recent update in May reported an “excellent” start to the new financial year which included a 49% jump in Wealth net flows to £3.3 billion, increasing the group’s assets under management to £233 billion.

In addition, General Insurance (which now includes Direct Line) premiums rose by 19% to £3.4 billion, UK and Ireland general premiums spiked by 26% to £2.5 billion, while Canadian premiums increased to £900 million. Retirement sales benefited from a rise in demand for individual annuities which drove them 10% higher, while equity release products also enjoyed an 8% increase.

• FTSE 100 broker upgrades: hot on L&G and Next shares
• ii view: high yielder L&G ups annual profit hopes
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

The group still has some challenges to overcome, however. Bulk Purchase Annuity sales remain volatile, health sales during the first quarter cam up against reduced consumer demand, and its exposure to general insurance leaves Aviva exposed to and calculating the risks of unknown events ranging from climate change-induced flooding to wildfires in Canada. Its previous sales of some business units has also reduced its geographical diversity.

However, the group is an increasingly capital-light business in terms of growth opportunities, while some geographical diversity is still in evidence via the likes of China and India. In addition, there could be scope for a further rerating should the group complete the switch from being regarded as a general insurer rather than a pure life insurer, which tends to carry higher price valuations. 

The obvious attractions of a group which continues to play to its strengths has resulted in the share price having risen by 46% over the last two years, in addition to which a punchy dividend yield of 5.7% is a major attraction. Aviva’s progress and focus on margin over volumes in key areas underlines its leading credentials in the sector.