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London-focused housebuilder Berkeley has seen its share price slide despite announcing a 6.4% increase in pre-tax profit in company results for the year to April 30.

Berkeley said trading at the business remained 鈥渟table鈥�, despite fears over the state of the market, with business in the new financial year in line with the end of the last 鈥� but it warned over the potential for a 鈥渧olatile鈥� operating environment to impact upon supply and demand.

Shares in the housebuilder fell back more than 5% on the news in early trading, wiping 拢200m off the 拢4bn value of the firm, with the losses compounding falls in the value of the company seen on Monday.

Berkeley said it made pre-tax profit of 拢552m in the year, above the 拢545m expected, on revenue of 拢2.35bn, up 6.6% on 2021 results.

It also confirmed its previous guidance that its March purchase of the share of the St William joint venture from the National Grid, meant that it was on course to deliver profit targets for the next three years a year early, with pre-tax returns rising to 拢600m next year and 拢625m beyond then.

The firm built 3,760 new homes in the year, up from 2,825 in 2021, at a gross margin slightly down at 28.3%. The firm鈥檚 forward sales grew to 拢2.17bn at the year-end compared to 拢1.71bn in the previous year, but its net cash position slumped to 拢269m, from 拢1.13bn at the same point in 2021, reflecting the investment in the St William joint venture.

Berkeley鈥檚 statement gave few concrete numbers around current trading, the cost of fire safety repairs, and how it was being impacted by construction cost inflation, beyond stating that 鈥渙n a blended basis across our portfolio we have been able to absorb these cost pressures through sales pricing鈥�.

And the firm did give a variety of warnings around the potential impact on trading of the current economic, political and regulatory uncertainty in the light of Brexit, covid, the war in Ukraine, the fire safety crisis and the new tax burdens flowing from that.

Chief executive Rob Perrins said: 鈥淭he economic and operating environment remains volatile with inflation, labour and materials shortages, interest rates and regulatory costs of development all having the potential to impact supply and demand.鈥�

The results statement also said the firm was concerned about 鈥渟upply chain disruption, increased taxation, inflation and concerns over future economic growth鈥�.

It added: 鈥淥ur industry has also seen regulatory developments in building safety, including the 好色先生TV Safety Pledge and RPDT [Residential Property Developer Tax], carbon related taxes and the Levelling Up and Regeneration Bill. These factors inevitably risk impacting companies鈥� capacity and appetite for investment and innovation.鈥�

Regarding the government鈥檚 planning reforms, the firm said there was also a risk the government鈥檚 鈥渓audable aims鈥� were achieved 鈥渁t the cost of limiting housing delivery and its social and economic benefits鈥�.

It also admitted that two of its London regen schemes were currently subject to planning 鈥渃all-in鈥� by the secretary of state.

Shane Carberry, equity analyst at Goodbody said the results were positive, despite concerns that demand for new homes could drop due to rising interest rates. He said: 鈥淲hile inflation and interest rates both continue to rise, so do house prices, albeit at a slightly slower rate than earlier in this year.鈥�