High-end house builder Berkeley Group has defied a slowdown in its key London market to push up pre-tax profits by 53 per cent, beating expectations.
On Wednesday the FTSE 250 group reported profits before tax of £812.4m for the year to the end of April, saying “the housing market has stabilised in London and the southeast” since a knock resulting from the Brexit referendum.
However, it added that “we are facing a number of headwinds and a period of prolonged uncertainty” resulting from factors including Brexit, global instability and a tougher tax regime for buy-to-let landlords.
The group sold 3,905 homes during the year, up 3.4 per cent from a year earlier, and pushed up its average selling price by 31 per cent to £675,000. Forward sales at the year end were down 16 per cent from a year ago to £2.74 billion.
Total dividend payouts were down 2.6 per cent to 185p as the group shifted its policy to devote some cash to share buybacks instead.
The group dropped out of the FTSE 100 index last year on shareholder fears about the London property market. Since then it has branched out into Birmingham and has now bought its first site there, where it will develop 400 homes.
It said earnings for the next year were set to be at least level with this year, and reiterated earnings guidance that it would bring in at least £3 billion of pre-tax profit in the five years to April 2021.
- (Copyright The Financial Times Limited 2017)