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(Alliance News) - Berkeley Group Holdings PLC on Wednesday raised its full-year outlook following robust half-year results that saw earnings rise by more than a quarter.
The blue-chip housebuilder reported a substantial rise in interim earnings as the housebuilder hailed its London-focused investment strategy.
For the six months ended October 31, revenue rose 36% to GBP1.22 billion from GBP895.9 million last year, and pretax profit increased 26% to GBP290.7 million from GBP230.8 million. Berkeley noted the 20% reduction experienced in sales for the 2021 financial year compared to a year before had fully reversed in the latest six month period.
Shares in the Cobham, Surrey-based property developer were trading up 5.2% at 4,877.00 pence each in London on Wednesday morning, the best performer in the FTSE 100 Index.
"This is a strong set of results, including enhanced returns for our shareholders," commented Chief Executive Rob Perrins.
"The performance reflects Berkeley's conviction and investment in its strategy over the last 18 months, which is focused on London and the South East, the country's most under-supplied housing markets, in spite of the challenges presented by the pandemic, supply chain constraints, and regulatory environment. Over this time, we have continued to deliver in line with our uniquely long-term operating model, progressing construction across our portfolio of 64 live projects," Perrins added.
Looking ahead, Berkeley raised its earnings expectation for the current financial year by 5% from the current guidance, which was for pretax profit to be at a similar level to the last financial year of GBP518.1 million.
The upgraded expectations were partly driven by a near-term pipeline of 7,000 homes, which includes a strategic land site in Milton Keynes, a retail park in Kew and two St William regeneration sites in London.
Further, as a result of a resilient sales market, its delivery pipeline and the recovery of sales to pre-pandemic levels, Berkeley said pretax profit growth is expected to be around 5% per annum for the next three financial years. This sees Berkeley on a path to delivering GBP625 million of pretax profit for the year ending April 30, 2025, it said.
Berkeley noted it has in place a long-term plan to return GBP282 million per year to shareholders through to September 2025 through dividend or share buybacks. Berkeley also has identified GBP455 million of surplus capital to be returned by the end of April 2023 through either extra cash returns to shareholders or incremental land investment.
By Will Paige; willpaige@alliancenews.com
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