Berkeley ups guidance after profit jumps

Berkeley increased its guidance for the current year and beyond as the housebuilder reported a 26% increase in first-half profit fuelled by its investment in London and surrounding areas.

Pretax profit for the six months to the end of October rose to £290.7m from £230.8m a year earlier as revenue increased 36.3% to £1.22bn.

The FTSE 100 group raised its guidance for the year by 5% from an earlier forecast for profit little changed at about £518m. Berkeley said it expected profit to increase by 5% over the next three years, resulting in pretax profit of about £625m for the year to the end of April 2025.

Rob Perrins, Berkeley's chief executive, said: "This is a strong set of results, including enhanced returns for our shareholders. The performance reflects Berkeley's conviction and investment in its strategy over the last 18 months, which is focused on London and the South East, the country's most under-supplied housing markets, in spite of the challenges presented by the pandemic, supply chain constraints and regulatory environment."

The company stuck to its plan to return £282m to shareholders each year to September 2025 and to pay out £455m of surplus capital by April 2023.

Berkeley builds houses in London and surrounding counties. As the London market has improved, the value of sales reservations in the first half was slightly better than in the two years before the pandemic. This has resulted in the 20% reduction in the 2021/22 being reversed, it said.