Housebuilder reports strong growth as it aims to increase development by 50%

Berkeley has increased its earnings guidance for 2020/2021 by 5% and is now forecasting annual profit increases of 5% for the next three years until 2025.

The housebuilder today reported pre-tax profit of 拢290.7 million for the six months to 31 October, a 26% increase on the same period last year which was impacted by lockdown and 5% higher than in 2019 pre-pandemic.

Berkeley now expects earnings to grow 5%, after initially saying pre-tax profit for 2021/22 would remain at last year鈥檚 level of 拢518.1m.

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The firm has bought more land for a further 500 homes at its Royal Arsenal London Riverside development

It also now anticipates profit to hit 拢625m by 2025, as it seeks to increase its build volumes by 50% from pre-pandemic levels.

It said this was due to 鈥渆xcellent visibility in our delivery pipeline, particularly through the long-term sites in land holdings which are in production, and the recovery of sales to pre-pandemic levels鈥�.

Turnover for the six months rose to 拢1.2bn, up 36% on last year and a 31% increase on the equivalent period in 2019.

The housebuilder, which focuses primarily on regeneration sites in London and the South-east, said sales reservations are now 鈥渟lightly ahead鈥� of pre-pandemic levels and a 20% reduction last year had been wiped out.

Rob Perrins, chief executive of Berkeley, said: 鈥淭he performance reflects Berkeley鈥檚 conviction and investment in its strategy over the last 18 months, which is focused on London and the South-east, the country鈥檚 most under-supplied housing markets, in spite of the challenges presented by the pandemic, supply chain constraints and regulatory environment.鈥�

Berkeley sold 1,828 new homes in the six months, including 395 through joint ventures.

It has land holdings covering 94 sites, including 30 long-term regeneration projects with a combined 拢6.9bn of future gross profit and a short-term pipeline of 7,000 homes.

Berkely has added two sites to its land holding 鈥� a shopping centre in site Peckham, south London for 900 new homes and a site next to its existing Royal Arsenal London Riverside development for 500 new homes. It has also started work on four new regeneration sites, including the 1,300-home Bermondsey Place scheme in Southwark, and the 1,200-home Eight Gardens development in Watford, Hertfordshire.

In August, Berkeley announced plans to raise 拢400m to build low-carbon homes through the issuing of a green bond.

 

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