Berkeley Group Holdings plc (LON:BKG) has announced its Trading Update covering the period from 1 November 2024 to 28 February 2025.
“Berkeley set out its 10-year growth strategy – Berkeley 2035 – with its interim results in December; a strategy focused on long-term value creation through a flexible capital allocation framework which balances near-term volatility in the operating environment with the ability to capitalise on emerging investment opportunities. Today, Berkeley reaffirms its earnings guidance to deliver at least £975 million of pre-tax profit across FY25 (£525 million) and FY26 (£450 million).
Enquiries are at a consistently good level, and we have seen the modest improvement in sales reservations that we noted at the time of the interim results continue through this trading period with sales rates ahead of those achieved last year. For this improvement to continue and sales rates to return closer to the levels of three years ago, there needs to be greater confidence in the trajectory of interest rate reductions and wider economic stability.
Berkeley has maintained its strong financial position, with net cash anticipated to be around £300 million at 30 April 2025 (31 October 2024: £474 million), reflecting an acceleration of shareholder returns since the half-year through share buy-backs and the anticipated settlement of some £180 million of land creditors in the second half of the year. The actual out-turn will be determined by the pace of further share buy-backs, any new land investment and the phasing of legal completions around the year-end.
We remain hugely encouraged by the change in mind-set over planning, brought about by the Government’s planning reforms and housing delivery ambitions which we fully support. In the period, Berkeley has made good progress, securing important amendments on 10 of our long-term regeneration sites. We are now working with our local authority partners to finalise the Section 106 agreements and clear conditions on a number of these so they can be implemented. We are also actively appraising a number of opportunities in the land market.
Nonetheless, Berkeley remains concerned by the impact of the extent and pace of regulatory changes of recent years, as we now await details of the new Building Safety Levy. Taken together, these incremental changes place significant pressure on the delivery of new homes.
We are also working hard in preparing the Building Safety cases required under the pre-start on site Gateway 2 approval process implemented by the new Building Safety Regulator. Alongside the rest of the industry, including the G15 group of Housing Associations, we believe a review of this process is necessary to ensure it meets its objectives without incurring further delays to delivery, and thereby supports the Government’s housing ambitions.
Since its interims results, Berkeley has returned £71.3 million via share buy-backs (1.9 million shares at an average price of £37.92). An interim dividend of 33 pence per share (£33.0 million) has been declared for payment on 28 March 2025. Taking this and the share buy-backs in the first half into account, there is currently £156.1 million residual shareholder return (to complete the £283.5 million annual return) due by the end of September 2025. To the extent this amount is not delivered as share buy-backs, it will be returned in September as a dividend.”
