Berkeley Group announced on Friday that it will raise its profit guidance for the year by over 5%.
The housebuilder will raise profit forecast after a “resilient” start to the year. This is despite pre-tax profit for the first of the year falling from £539.9 million a year ago to £401.2 million.
Revenue also fell from £1.66 billion to £1.65 billion.
Chief executive Rob Perrins said: “With the resilient start to the year, Berkeley is increasing its pre-tax profit guidance for the current year by at least 5% and now anticipates a similar split between the first and second half to last year when 55% was earned in the first six months of the year.”
“This is in the context of a short-term outlook that is clearly uncertain due to the ongoing Brexit process and a number of headwinds in the operating environment in London and the South East. This uncertainty affects sentiment and confidence which has a consequential adverse impact on investment levels and transaction volumes with a number of developers withdrawing from these markets.”
George Salmon, who is an equity analyst at Hargreaves Lansdown, said: “Upgraded profits and a balance sheet that looks even more resolute has given the group the confidence to promise a steady flow of shareholder returns all the way out to 2025.”
“However, there’s only so much the group can do to look after its share price. Sentiment will remain closely tied to the Brexit barometer, since London could well be in the eye of the storm should a disorderly departure trigger a housing meltdown.”
“While the shares remain something of a binary bet on Brexit in the short-term, looking further afield Berkeley’s niche operating model and enviable track record mean we think it should be a long-term winner,” he added.
Shares in Berkeley Group (LON: BKG) are trading +3.04% (1006GMT).
