Friday preview: Brokers divided on dividends for Berkeley Date: Thursday 23 Jun 2011
LONDON (ShareCast) - London and south-east house builder Berkeley raised the bar for full-year results back in March when it said earnings would be at the high end of its expectations.
Brokers responded by revising their forecasts, and expectations now are for pre-tax profit of £129.8m on sales of £694.5m. Panmure Gordon is above the median forecast with its prediction of profits of £131.2m. The broker goes for earnings per share of 70.5p (consensus: 70.71p), and thinks shareholders will have to wait a while longer for a resumption of dividend payments, as it anticipates the group will continue to focus on land investment.
Not all brokers agree; consensus is for Berkeley to pay a dividend of 2.72p, its first pay-out since 2004.
“In terms of sector commentary, we expect the group to comment that conditions have remained pretty robust. We know that London has continued to outperform the rest of the UK and this is borne out in Berkeley Group’s performance over the past couple of years, with the group maintaining a net margin in the high teens,” Panmure Gordon said.
“When we last heard from the group it reported a 25% increase in reservations, primarily driven by more sites coming on stream, and we would have expected this momentum to have continued in the weeks since," the broker added.
Panmure Gordon re-iterated its "hold" rating and 911p target price for housebuilder Berkeley Group Holdings (BKG). Ahead of full-year results next week, the broker said it expects to hear a positive statement from the "high quality operator". Nevertheless, believing that the stock looks fully valued, Panmure prefers to maintain its neutral stance. Shares in Berkeley, which earlier in the year announced that it expects to report earnings at the high end of its expectations for the 12-months ended 30th April 2011, added 5p to 1,141p.
Berkeley Group (BKG) anticipates reporting earnings at the high end of its expectations for the year ended 30th April 2011, the housebuilder announced as winter sales reservations jumped and visitor numbers held steady. The company, which specialises in luxury flats, added that the investment in work in progress will enable a further growth in earnings in 2011/12 if overall market conditions permit. Shares in Berkeley gained 36p to 1,040p.
Berkeley to hit high end of forecasts By Philip Whiterow
Date: Friday 18 Mar 2011
LONDON (ShareCast) - London and south-east housebuilder Berkeley continues to benefit from the region's position as a pocket of strength in an otherwise gloomy housing market.
"Berkeley anticipates reporting earnings at the high end of its expectations for the year ended 30 April 2011 and the investment in work in progress will enable a further growth in earnings in 2011/12 if overall market conditions permit," it said.
Sales reservations were up 25% between November and February on the same time last year. "Cancellation rates are at historically low levels, while visitors per site has been consistent with the same period last year, reflecting the current mortgage market conditions, with an increase in the number of outlets leading to the higher levels of sales overall," the firm said.
"Forward sales currently exceed £800m, while build costs remain benign with underlying increases in fuel and commodities offset by excess capacity in the construction sector," Berkeley added.
In the period, it acquired a further 1,000 plots across 8 new sites bringing the total number of plots acquired in the year to 3,500 across 21 sites.
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