LONDON (ShareCast) - (Sharecast News) - Berkeley Group said on Friday that it was temporarily suspending work on developments that have been hit by supply issues, as it confirmed the payment of its upcoming dividend but withdrew guidance due to the Covid-19 outbreak.
The housebuilder had kept its sites open but modified its working practices to comply with social distancing guidelines. However, due to supply chain issues and the challenges of maintaining the delivery of materials to sites, it is now "progressively managing the safe, temporary suspension of work" on developments where this is the case.

"This will take time to achieve as critical in-progress works are brought to the stage where they can be safely suspended and secured," it said.

The housebuilder said it was focusing on completing a number of private and affordable homes which are close to handover and which many customers still need us to finish. "Our site teams will continue to deliver these remaining essential works safely, and in-line with the government's social distancing guidance," it said, adding that most of its office-based staff are working from home, while sales centres and show homes have been shut.

As a result of the disruption, which affects the final six weeks of its financial year, it now expects profits for the year ending 30 April 2020 will be around ?475m. Prior to the escalation of the Covid-19 outbreak, it was on track to meet market expectations for the year.

The company said it was suspending future guidance until there is greater clarity on the impact of the pandemic.

"Our priority is to maintain the dividend and deliver a pre-tax return on equity of 15% over the next six years, which the board believes is the appropriate risk-adjusted target return across the cycle for Berkeley," it said.

The 99.32p a share dividend announced in the March trading update will be paid to shareholders on 31 March. In addition, Berkeley confirmed that it plans to make the next ?140.1m shareholder return by 30 September.

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