Berkeley, a prominent housebuilder headquartered in Cobham, has announced its expectation of achieving a £525 million pre-tax profit for the year. This projection is firmly grounded, with 90 per cent of the anticipated profit already secured through exchanged sales contracts.
The company has underlined its dedication to addressing the nation’s housing needs, despite broader sectoral challenges marked by high costs and fluctuating demand. According to City AM, housebuilding has recently faced contractions due to these issues.
The board of Berkeley has expressed support for the proposed reforms to the planning system and the government’s objective to deliver 1.5 million new homes within the current parliamentary term, aligning with its growth mission. The board stated, ‘Achieving this ambition requires a change of attitude and a refreshed partnership approach to allow developments, that are currently stalled, to come forward.’
In communications with investors, Berkeley projected that its annual pre-tax profit would be skewed towards the first half of the year. The firm expects a marginally higher operating margin than its long-term average for the same period.
Additionally, the company predicts a reduction in net cash by the end of October, estimating £450 million compared to April’s close of £532 million. This forecast includes shareholder returns amounting to £229 million within the recent half-year period, which encompasses a £184 million special dividend proposal awaiting approval at the Annual General Meeting (AGM).
The new government’s ambitious agenda introduces various changes to the operating environment, which Berkeley plans to thoroughly evaluate before updating the market with its interim results in December.
This announcement comes during a week of significant developments within the housing sector. Barratt, the largest housebuilder in Britain, reported a decline in completions, while Vistry exceeded market performance expectations and is on track to construct nearly 20,000 homes this year.
Berkeley’s anticipated pre-tax profit illustrates its strategic foresight in navigating the complexities of the housing market. The company’s proactive stance on government policies and planning reforms, coupled with its operational strategies, positions it well to meet its financial and developmental objectives.