Berkeley Group FY profits rise but outlook cautious
By Michele Maatouk
Date: Wednesday 21 Jun 2023
(Sharecast News) - Housebuilder Berkeley Group posted a 9.5% jump in full-year pre-tax profit on Wednesday but struck a cautious note over the outlook.
In the year to 30 April, pre-tax profit rose to £604m from £551.5m as Berkeley hailed a "strong operating performance in a challenging environment". Revenues rose 8.6% to £2.6bn.
Chief executive Rob Perrins said: "Berkeley has delivered pre-tax profits in line with the guidance provided at the start of the financial year, maintained our shareholder returns programme and increased the net cash position.
"This is a very strong performance by our sales and construction teams, given market conditions and changing building regulations, and reflects the resilience of Berkeley's business model with its focus on the country's most undersupplied markets."
However, Berkeley also said that forward sales were down 15% on the year and that it expects sales for 2023/24 to be around 20% lower on the year.
"More recently we have seen expectations for the pace of reduction in inflation and interest rates slow with a consequential rise to mortgage rates," it said.
"The near-term market outlook is therefore uncertain, much the same as it has been since September 2022. In this type of market there is a lack of urgency and transactions typically stem from owner occupiers with a current motivation to move or investors with immediately available funds, with demand therefore weighted to product which is closer to delivery, as opposed to off-plan sales that do not complete for two to four years."
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