Berkeley Group trading in line amid softer demand

Berkeley Group said in a trading update on Friday that its current trading was in line with the levels it identified in December.

The FTSE 100 housebuilder said sales since the end of September were around 25% lower than the strong first five months of the financial year, reflecting the underlying demand for homes in London and the South East.

Its sales pricing throughout the period remained “firm”, and above business plan levels, with the company focussed on cost control and maintaining operating margins.

Build cost inflation had shown early signs of moderating, the board noted.

The company said it intended to continue matching supply to demand, taking a “cautious approach” to releasing new phases to the market as it focuses on the quality of its forward sales.

Berkeley reaffirmed that it was on target to deliver pre-tax earnings of around £600m for the year ending 30 April, with at least £1.05bn in aggregate to be delivered for the following two years.

The earnings were underpinned by the group's cash due on exchanged forward sales, which were expected to be above £2bn as at 30 April.

Net cash at year-end was currently expected to be around £375m, subject to any further share buy-backs in the intervening period.

Berkeley said a dividend of £75.2m, or 69.44p per share, would be paid to shareholders on 24 March.

The rest of the £141.4 million return for the six months ending 31 March had already been satisfied through share buy-backs.

“The company also announced that the next £141.4m shareholder return will be provided by 30 September through a combination of dividends and share buy-backs,” the board said in its statement.

“Of this, £9.5 million has been returned through share buy-backs.

“The shareholder returns programme currently comprises a commitment to return £283m, or £2.62 per share, per annum to September 2025.”

At 1140 GMT, shares in Berkeley Group Holdings were up 0.02% at 4,037p.

Reporting by Josh White for Sharecast.com.