18th Mar 2014 09:10
LONDON (Alliance News) - Housebuilding company Berkeley Group Holdings PLC Tuesday said sales of new-build properties across all of its brands have been strong since November
The FTSE 250 company is made up of four autonomous companies: St George, St James, Berkeley and St Edward. Berkeley said the UK government's Help to Buy Scheme has increased activity in the property market and so has helped the acceleration of delivery of new homes across the sector.
Its comments come just after the Chancellor George Osborne said the first phase of the government's flagship mortgage-financing scheme will be extended by four years to 2020.
The first phase of the Help to Buy scheme in England started in April 2013, making buyers of newly built homes eligible for a 20% equity loan from the government on top of their 5% deposit. The second phase, which started in the Autumn, guarantees a portion of a buyer's mortgage of new and existing homes and hasn't so far been extended beyond its current end date.
Berkeley said: "We are working to deliver more, but reiterate the importance of maintaining a stable and predictable regulatory and taxation environment to enable this continued investment."
The company said cash due on forward sales is now in excess of GBP1.9 billion, up from GBP1.8 billion in October, reflecting a continued demand for new homes in London and the South of England.
The housebuilder said it has added to its land holdings with five further sites. Berkeley said this activity leaves it well-positioned to maintain the estimated future gross margin in its land holdings at GBP3 billion whilst continuing to deliver "sustainable returns on equity".
"Approximately 86% of the group's land holdings have an implementable planning permission and all of these sites are in the course of construction, consistent with our previous disclosures in December," it added.
Following payment of the dividend of GBP117.9 million, or 90 pence per share, in January the group said it remains ungeared.
In addition, the firm said it has now paid GBP1.64 per share of dividends, equivalent to GBP215 million, towards the first milestone of GBP568 million by September 2015.
"This leaves further dividends of GBP2.70 per share to be paid by the first milestone date and the board is satisfied that Berkeley is well placed to achieve this through a series of regular dividends," Berkeley said.
The firm said it is well-placed to achieve its second milestone, equivalent to further dividends of GBP4.33 per share by September 2018.
The stock was trading at 2,687.00 pence Tuesday morning, up 35.00 pence or 1.3%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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