Berkeley Group Holdings plc (LON:BKG) is holding its Annual General Meeting today, at which it will provide the following Trading Update covering the period from 1 May 2022 to 31 August 2022.
“Berkeley has continued to trade well during the first four months of the new financial year, with the value of underlying sales ahead of the financial year ended 30 April 2022. The good level of demand continues to support pricing above business plan levels, which is sufficient to cover cost increases on a blended basis across Berkeley’s developments.
Consequently, Berkeley is on track to meet its profit guidance and deliver a pre-tax profit for the current financial year ending 30 April 2023 of £600 million and £625 million for the year ended 30 April 2024. The profit for the current financial year is anticipated to be around 55 per cent weighted to the second half, in line with production scheduling.
The ongoing resilience of the sales market and second half weighting of revenue and profits, means that forward sales, representing cash due under exchanged private sales, are expected to be marginally above the £2.17 billion held at 30 April 2022. Net cash is anticipated to be at a similar level to the £269 million held at the most recent financial year-end, albeit this is subject to normal trading fluxes and the extent to which further share buy-backs are undertaken. Berkeley is still targeting to be working capital neutral over the course of the current and next financial year, in line with its guidance at the year-end.
The operating environment remains volatile and little changed over the couple of months since the June results announcement, with overall cost inflation continued at the rates noted therein (5-10% per annum across the portfolio). In this context, Berkeley’s current strategy focuses on ensuring each site has the most appropriate development solution reflective of prevailing requirements, whilst new land will only be added to the land holdings very selectively.
As announced on 11 August 2022, a dividend of £23.3 million, or 21.25 pence per share, will be paid to shareholders on 9 September 2022 with the remainder of the £141.1 million return for the six months ending 30 September 2022 having already been satisfied through share buy-backs.
Berkeley Group also announced that the next £141.1 million shareholder return will be provided by 31 March 2023 through a combination of dividends and share buy-backs. Of this, £38.3 million has already been returned through share buy-backs. The amount to be paid as a dividend will be announced prior to the end of February 2023, taking account of any further share buy-backs made in the intervening period. The scheduled annual shareholder return of £282 million now represents £2.59 per share.”
