Berkeley Group records pre-tax profit of £518.1m

Berkeley Group delivered in line with its guidance set before the pandemic

The Berkeley Group (LON:BKG) confirmed it made a pre-tax profit of over £518.1m during the past financial year.

It is an increase of £14.4m compared to the year before.

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A specific driver of its profits was sales of properties worth in excess of £700,000.

The FTSE 100 homebuilder saw its revenue jump by £0.3bn to £2.2bn, as it sold 2,825 homes across London and the South East.

Andy Murphy, director at Edison Group, commented on Berkeley Group’s results and outlook: “The UK’s leading place-maker, Berkeley Group Holdings PLC, announced a strong set of financial results today. The company delivered in line with its guidance set before the pandemic, maintaining its annual £281 million shareholder return as well as adding ten new sites, with the capacity to deliver 6,650 new homes to its landholdings.

“The company ended the year with net cash of £1.1 billion, cash due on forward sales of £1.7 billion, and the estimated future gross margin in its land holdings having increased to £6.9 billion. This also resulted in a profit before tax increase from the previous year, up 2.9% to £518.1m. As of this past year, Berkeley now has 23 of its 29 long-term regeneration developments in production, supporting its anticipated 50% increase in housing delivery by 2024/25 from 2018/19 levels.”

The Berkeley Group share price is down by 1.34% during the morning session on Wednesday 4,578p per share.

Laura Hoy, Equity Analyst at Hargreaves Lansdown said: “It’s been a bumper year for housebuilders like Berkeley as pent-up demand following lockdowns flooded the market with eager buyers. It was no surprise to see that both the number of houses and the average selling price both ticked higher over the past 12 months.”

“But shares wobbled following the announcement as investors started to question whether the housebuilders’ run would slow to a walk now that the market is cooling. Data from the HRMC this week showed the pace of purchases has decreased, with the number of homes sold in May roughly 40% lower than March levels.”

The FTSE 100 firm has made firm commitments to reducing its carbon footprint across the business.

“The company announced its Vision 2030 this year, which sets out its ten strategic priorities for the next ten years, including its continued investment in modular housing to reduce its carbon footprint. As a result, Berkeley became one of the first 350 companies in the world to commit to limiting global warming to 1.5°C. This commits the company to reduce emissions from its sites, offices and sales venues by a further 50% between 2019 and 2030,” Murphy said.

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