17th Jun 2020 08:47
(Alliance News) - Berkeley Group Holdings PLC on Wednesday reported a double-digit decline in earnings in its most recently ended financial year as home deliveries dropped.
The Cobham, England-based property developer said revenue declined 35% in the year to the end of April to GBP1.92 billion from GBP2.96 billion a year earlier, taking pretax profit down 35% to GBP503.7 million from GBP775.2 million.
"The reduction in profit before tax of 35.0% on the prior year was anticipated and reflects the progressive completion of a number of Central London developments acquired in the period from 2009 to 2013," Berkeley said.
The company said it is maintaining a pretax return on equity target of at least 15% for the period stretching May 1 to April 30, 2025, which equates to annual pretax profit of GBP500 million for the six-year period.
During the recent year, Berkeley said it delivered 2,723 homes, plus 435 in joint ventures, versus 3,698 homes a year ago. These homes were sold across London and the South East at an average price of GBP677,000 compared to GBP748,000 the year before.
Berkeley said its share of the results of joint ventures was a profit of GBP33.3 million compared to GBP8.8 million in financial 2019.
The gross margin percentage has increased to 33.2% from 31.3%, reflecting the mix of properties sold in the year.
Berkeley's land holdings comprised 58,413 plots as at April 30 versus 54,955 plots at the end of April 2019, including joint ventures.
The FTSE 100-listed company said it has remained cash positive on a net basis throughout the year. Net finance income totalled GBP700,000 for the year versus GBP2.0 million net finance costs the year before, due to interest income on cash deposits which outweighed facility fees, interest on drawn borrowings and imputed interest on land creditors.
The company said it ended the financial year with net cash of GBP1.14 billion compared to GBP975.0 million a year prior.
Net assets increased over the year by 4.7% to GBP3.10 billion, Berkeley said, from GBP2.96 billion a year ago. This is after payment of GBP149.8 million of dividends and the GBP130.5 million of share buybacks.
Of the GBP140.0 million shareholder return already announced to be made by the end of September, GBP6.0 million has been made to date through share buybacks, Berkeley noted. The amount that will be returned as a dividend will be announced on August 13, it said.
Berkeley shares were trading 3.9% higher in London on Wednesday at 4,385.55 pence each.
By Evelina Grecenko; [email protected]
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