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.
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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