Berkeley Group delivers solid FY results amid 'exceptionally volatile' period

Property developer and housebuilder Berkeley Group said on Wednesday that full-year pre-tax profits and earnings per share had both improved in the twelve months ended 30 April, reflecting the "stability" of its "uniquely long-term operating model" throughout an "exceptionally volatile" period.

Berkeley posted a 6.4% rise in pre-tax profits to £551.5m, a 23.1% surge in basic earnings per share to 417.8p, and a single percentage point increase in pre-tax return on equity to 17.5%. Revenues were up 6.6% at £2.38bn on the sale of 3,760 homes, compared to 2,825 in the prior year.

The FTSE 100-listed firm stated that the value of its underlying reservations was up 25% year-on-year and slightly ahead of pre-Covid levels, with cost inflation absorbed by sales prices.

Berkeley also highlighted that the value of its land holdings had shot up by £1.37m to £8.25m, with the net asset value of its portfolio rising by £2.06 per share to £28.18, but noted its net cash balance had fallen by £859.0m to £269.0m.

"An increase to profits forecasts for the next three years and strong hints of even greater cash returns to shareholders are failing to move shares in high-end housebuilder Berkeley," said AJ Bell's investment director Russ Mould. "Investors are focusing instead on rising interest rates, falling consumer confidence and fears of a recession, especially as acquisitions, dividends, and buybacks are whittling down the FTSE 100 firm’s net cash pile."

Reporting by Iain Gilbert at Sharecast.com