Berkeley Group hoists profits 53pc, remains confident despite headwinds

Housebuilder Berkeley Group lifted annual pre-tax profits 53% and while it warned the business was facing "a number of headwinds and a period of prolonged uncertainty" around its core London housing market, it had £2.7bn of forward sales booked and remained confident of delivering its profits guidance for the next four years.

For the year to end-April revenue rose 33% to £2.72bn as it sold 3.4% more homes at an average selling price that increased 31% to £675,000.

The FTSE 250 group produced a profit before tax of £812.4m and earnings per share rose 58% to 467.8p thanks to share buybacks during the year.

As announced earlier in the year, it plans to make £138.8m of returns to shareholders by 30 September 2017, with the amount to be paid as a dividend announced on 17 August, following any buybacks in the intervening period.

Chief executive Rob Perrins said the housing market had stabilised in Berkeley's key London and the South East following the disruption from the Brexit vote but argued that higher stamp duty and planning requirements were leading to a reduced levels of new housing starts in London that "leads to greater uncertainty" and mean that supply in "will remain constrained and not reach the levels required".

There was net cash of £285.5m in the bank and forward sales of £2.74bn give good visibility of profitability and cash flow as we begin a new financial year, Perrins said.

"The housing market in London and the South East remains under-supplied with low interest rates, good mortgage availability and robust underlying demand. Taken together, this enables Berkeley to reiterate its guidance of delivering at least £3.0bn of pre-tax profit over the five years to 2021, assuming the return to normal market conditions continues."