Berkeley Group have yet again produced a very respectable set of results with pre tax profits rising 26% in the six months to 31st Oct 21, when compared to the same period a year ago.
Berkeley’s pretax profit rose to £290.7m, up from £230.8m last year. The jump in profits was helped by increased sales with revenue surging 36% to £1,220.7m.
Berkeley Group specialise in high-end developments in London and the South East and are often seen as a bellwether for the health of the Uk property market.
Berkley Group accounts for around 10% of new homes in London and the South East and is now seeing sales reservations at pre-pandemic levels.
“Berkeley are sounding confident in these results and are allocating additional capital to their land buying efforts accordingly. The group’s ability to redevelop complex sites in and around the capital, taking land that others fear to touch and transforming it into premium properties is their key attraction for investors,” said Steve Clayton, manager of the HL Select UK Growth Shares fund.
The HL Select UK Growth Shares Fund holds shares in Berkeley Group Holdings so Clayton and the fund’s investors would have been pleased to see Berkeley shares up over 5% at 9am in London.
“Berkeley lock significant future margin into their development plans and so far, the cost pressures seen across the industry have not impacted upon the group. No surprise to see the shares reacting positively,” said Clayton.
“Historic investment into land acquisition, at times when others have been wary or unable to commit, has left the group with a clear growth runway ahead. Capital continues to be strictly managed, with the group choosing to invest in land currently, given the future returns it expects are high. The ongoing dividend to shareholders provides a useful yield, but really Berkeley Group is a growth vehicle, built around the predictable delivery of future developments at attractive margins. Supply of housing in the capital and South East remains tight and bond markets are signalling that no nasty surprises on interest rates are expected any time soon. That backdrop should give Berkeley plenty of potential in the years ahead.”
