Berkeley Group is continuing to lead the rest of the UK housebuilding industry, according to the latest housebuilding profitability figures from BDO Stoy Hayward, writes Tom Bill.

The data from companies reporting in the last quarter showed that Berkeley had an operating margin of 20% over the past six months, compared with a sector average of 13.1%.

Richard Kelly, construction partner at BDO, said: 鈥淏erkeley is holding up so much better than the rest. It鈥檚 operating in a different league, in that it鈥檚 a longer-term developer, but not so different that it can鈥檛 be compared to its rivals.鈥�

Although Berkeley posted strong results for the year ended 30 April 2008, it was guarded about the outlook.

Pre-tax profit was up 3%, from 拢188.1m to 拢194.3m, and turnover rose 8% from 拢918.4m to 拢991.5m.

Tony Pidgley, Berkeley鈥檚 chief executive, conceded the market was 鈥渃hallenging鈥� and 鈥渦ncertain鈥� but had little more to say about the firm鈥檚 trading prospects for the rest of 2008. Despite the vagueness, the City reacted positively to the results and Berkeley鈥檚 net debt level of 拢4.5m.

Kevin Cammack, an analyst with Kaupthing, said the City had always reacted as much to what Pidgley said as it had to the performance of the company.

It鈥檚 bad out there and getting worse. There鈥檚 no sign of liquidity returning yet and no light at the end of the tunnel.

Richard Kelly, BDO stoy hayward

Berkeley also announced a plan to defer a return of 300p to shareholders. Instead, it will plough the cash into land buying at a time when rivals are less able to spend.

Cammack added: 鈥淚f approved 鈥� and it should be 鈥� this plan will once again demonstrate Berkeley's innovation and ability to play the cycles with superior strength and guile.鈥�

Elsewhere in the BDO survey, Miller Group posted a margin of 11.5%. BDO鈥檚 Kelly said: 鈥淚t鈥檚 never been a spectacular performer in terms of margin so it wasn鈥檛 a big shock.鈥�

Telford Homes recorded a margin of 16.6%.

Kelly said: 鈥淚t鈥檚 bad out there and getting worse. There鈥檚 no sign of liquidity returning yet and no light at the end of the tunnel.鈥�

He said the picture would become clearer in the next few months after Barratt, Taylor Wimpey, Persimmon and Redrow posted their annual results.鈥�

Downloads

Topics