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(Alliance News) - Berkeley Group Holdings PLC on Friday said it has started the new year with a continuation of the "resilient" market conditions seen last year.
As a result, the blue chip housebuilder expects to meet its annual profit guidance, with pretax profit for the year to April 30, 2022, to come in at or above the GBP518.1 million reported in financial 2021.
Berkeley said profit will be weighted more to the first half, with forward sales to be about GBP1.7 billion at the end of the interim period, in line with the end of financial 2021.
"The final figure will depend upon the number of completions achieved between now and October 31, as well as the level of reservations over this period," the housebuilder added.
It continued: "The first four months of this new financial year have seen a continuation of the resilient market conditions reported with our full-year results in June.
"The gradual easing of lock-down restrictions has been accompanied by a gradual firming of the London market as anticipated. Outside London, the market has remained robust."
Underlying reservations, Berkeley said, were in line with the two years prior to the pandemic.
"Sales pricing has remained above business plan levels, which is offsetting building materials cost inflation referred to further below, and cancellations have been at normal rates," Berkeley continued.
Despite the positive sales performance, Berkeley noted the operating environment remains "challenging".
The housebuilder continued to experience inflationary pressure in build costs during the first four months of the new year, principally through materials.
"We are mindful of ongoing issues in the supply chain and labour market resulting from Brexit and the pandemic," it added.
Berkeley confirmed its proposed B-share capital return GBP451 million will be completed later this month. This will be done with the first half of the previously identified surplus capital of GBP228 million issued in August, then the remaining GBP223 million of the shareholder return issued in the year to March 31, 2022.
Looking ahead, Berkeley expects "a large part" of the second half of the surplus capital return - a further GBP228 million due by March 2023 - will be allocated to land expenditure.
"The proposed B-share capital return will be accompanied by a share consolidation, following which the regular, annual GBP281 million shareholder returns will represent approximately GBP2.50 per share, increased from an initial GBP2 per share in 2016," Berkeley added.
It continued: "Following the B-share payment, the next scheduled shareholder return is the GBP141 million in respect of the six months to September 30, 2022. Given the resilient performance since the year-end, Berkeley today announces its intention to make the return through either dividends or share buy-backs in the intervening period."
By Paul McGowan; paulmcgowan@alliancenews.com
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