6th Sep 2019 08:25
(Alliance News) - Berkeley Group Holdings PLC on Friday said market conditions in London and the south east of England were consistent with its June update and prices were stable, although transaction costs and uncertainty are a challenge.
The house builder holds its annual general meeting on Friday, where it will provide a trading update for the period from May 1 to August 31. Berkeley said its forward sales position is still more than GBP1.8 billion.
Berkeley said the wider market is still "constrained by high transaction costs and the uncertainty in the macro political and economic environment", although there is underlying demand for "new homes built to a high quality that are well located and properly priced to meet the local housing need, supported by good availability of mortgages".
Berkeley did not provide specific short-term targets but said it plans to generate a GBP3.3 billion pretax profit for the six years to April 2025, with profit in any single year being between GBP500 million and GBP700 million, subject to "the timing of delivery".
For its financial year ended April 30, the FTSE 100 company posted a pretax profit of GBP775.2 million, down 21% year-on-year. This would imply that future profits for the years to 2025 will be, on average, lower than financial 2019.
Berkeley expects its net cash at its half-year mark on October 31 will be similar to where it was at the end of April, when it stood at GBP975 million. This will depend on "the volume of any share buy-backs and investment in new land in the intervening period".
"While very mindful of the potential for short-term market dislocations from the current political back-drop, we remain steadfast in our belief in the long-term resilience and attraction of our markets of London, Birmingham and the south east. We continue to work with our supply chain to assess and address the risks associated with disruptive Brexit to the extent this is possible, including accelerating the delivery of certain materials and components," said Berkeley.
Back in August, the company declared a 20.08 pence per share interim dividend. Berkeley also announced at the time that the next GBP139.7 million tranche of its shareholder returns programme will be delivered by the end of March 2020. This will also be undertaken through a mix of dividends and share buybacks.
Shares in Berkeley were up 2.0% at 3,950.00p on Friday morning in London.
Related Shares:
Berkeley Group