Berkeley ‘on track’ after resilient housing market conditions continue

Housebuilder Berkeley Group has said it is on track with its profit guidance for the current year after “resilient market conditions” continued over the past four months.

The company said reservations are currently in line with those seen two years prior to the pandemic, after seeing a “gradual firming” of the London market in recent months.

Meanwhile, outside of London, the group said the market has “remained robust”.

Berkeley said it is therefore set to deliver a pre-tax profit for the current financial year “at or above” the £518 million reported for the year to April 2021.

Profit is expected to be weighted more to the first half of this financial year, with forward sales set to be around £1.7 billion at the half year.

It also told investors on Friday that sales pricing has stayed above business plan levels, offsetting a jump in building material costs.

“While the sales market has been resilient, the operating environment remains challenging,” the company added.

“As reported in the wider market, and in line with our year-end results update, we have continued to experience inflationary pressure in build costs during this period, principally through materials, and we are mindful of ongoing issues in the supply chain and labour market resulting from Brexit and the pandemic.”

Berkeley added that it started the current financial year with £1.1 billion in cash and plans to continue to invest in its land holdings.

Meanwhile, shareholders at the group’s annual general meeting on Friday will also vote on its previously annual plans to return £451 million of share capital back to investors.