Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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Broker Peel Hunt's £16.35p price target implies 12% possible upside. A prospective price/earnings (PE) ratio of 11.9 falling to 10.5 looks undemanding given Berkeley’s track record, profits potential and compelling yield attractions
An unrivalled land bank and powerful London presence provide the scope for further earnings forecasts upgrades at Berkeley (BKG). Since the £1.9 billion cap refined its strategy in early 2009 the Cobham-headquartered residential homes developer has invested heavily in new land in London and the South East to drive both growth and prodigious cash generation. Final results for the year to April (29 June) highlighted a 30% increase in the order book to over £1 billion as the London market remained buoyant. The company repeated its view it could increase pre-tax profits by 20% to £220 million in the year to April 2013 and the backlog suggests that target is beatable. The next round of profit estimate increases could begin with next week's annual general meeting update (5 September). On a longer-term basis the firm's plan to return £13 a share in cash to shareholders by September 2021 is a key reason to own its shares. Management intends to dish out £4.34 by September 2015 alone.
20 July 2012 Peel Hunt reiterates its Buy recommendation for Berkeley Group increasing its target price from 1600p to 1635p. 25 July 2012 Goldman Sachs reiterates its Buy recommendation for Berkeley Group increasing its target price from 1800p to 1950p. 27 July 2012 Deutsche Bank retains its Buy Recommendation for Berkeley Group and its target price of 1572p. P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=256596 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
Berkeley Group: UBS raises target from 1,530p to 1,640p, buy rating unchanged.
House-builder Berkeley Group saw both revenues and profits surge in the 2011/2012 fiscal year and said it would hit its medium-term profit targets quicker than first thought. Revenue jumped by 40.2% from £742.6m to £1,041.1m in the year to April 30th. The group sold 3,656 homes, up from 2,544 the year before, while the average selling price rose from £271,000 to £280,000. Meanwhile, pre-tax profit climbed by 57.5% from £136.2m to £214.8m. Overheads jumped by £26.1m to £99.6m but reduced as a percentage of revenue. The group said it is well-positioned to meet its previous target of doubling its pre-tax profit from £110m to £220m by April 30th 2013, two years earlier than planned. Its first targeted dividend repayment is expected in September 2015. "I am delighted to report a strong performance again this year," said Chairman Tony Pidgley.
Good news abounds in the property sector, which makes house builder Berkeley very interesting for Tempus in the Times. The group invested heavily when land values were heading south between 2008-2009 and has a very generous dividend policy (£1.7bn to be returned by 2021). It dropped yesterday despite saying it would double pre-tax profits by next year. Tempus says buy.
Northland Capital retained its "buy" stance on The Berkeley Group (BKG), with a 1,600p target price. The broker said that strong trends in the London housing market should support a solid trading update from the housebuilder on 19th March. Northland is impressed that the firm believes it will be able to double its operating profit within three years, instead of the previously expected five, adding that this could lead to an early start to the proposed 13 pounds per share dividend payment scheme over ten years. The shares crept down 5p to 1,378p.
Holdings (The) Sell 28-Feb-12 £4,080,000.11 Anthony W Pidgley 300,000 @ 1,360.00p Berkeley Group Holdings (The) Sell 28-Feb-12 £2,720,000.08 Robert C G Perrins 200,000 @ 1,360.00p
Peel Hunt ups target to 1,500p from 1,400p, buy recommendation unchanged.
ubs raises target to 1,530p from 1,480p.
Credit Suisse raises target to 1,225p from 1,079p, maintains neutral.
Outlook While well designed homes built to a high quality in desirable locations in London and the South East remain in demand, Berkeley is aware of the potential implications of the macro uncertainty that continues to provide the backdrop to the economy and the threat of short-term volatility. In these conditions, Berkeley will aim to invest its capital efficiently where it can create the best long term value for shareholders and assess the level of risk accurately. Despite the current challenging economic environment, Berkeley's performance in the first half, combined with its strong balance sheet, forward sales, well-bought land bank and brand reputation, places the Group in a strong position to deliver its near term operational targets and to return £13 per share set out in the long term strategic plan.
http://www.investegate.co.uk/Article.aspx?id=201112020700152234T
House builder Berkeley Group saw profit before tax rise by 64.1% to £101.1m in the six months ended October 31st from £61.6m the year before. Revenue rose 20.4% to £404.9m from £336.2m. In Central London, demand for prime residential property in good locations remained strong over the period as a whole and this has seen Berkeley increase its level of forward sales by 15.2% from £813.5m to £937.2m, the company said.
Mr Pidgley, Berkeley‘s chairman, told its annual meeting yesterday of forward sales in excess of GBP850 million, up from GBP813 million in April and GBP648 million a year before that, notes the Tempus column in the Times. As I wrote on Saturday in a review of the sector, the builders’ problem is a lack of sites in areas where people want to live. This is not Berkeley’s problem. Analysts were upgrading profit expectations for the current year, Numis Securities moving from GBP161.6 million to GBP181 million pre-tax. Some wonder if Mr Pidgley might accelerate or even increase that special dividend programme. Berkeley shares, up 57p at GBP12.35.5, are the most highly rated in the sector and sell on about 12 times’ this year’s earnings. They may be set for a rest for now, but progress longer-term seems likely, says the Times.
Panmure Gordon proved harder to impress, sticking with its "hold" recommendation and 1200p price target. it is, however, upgrading its forecasts for the year to April 2012: the profit before tax forecast moves from £155.7m to £165.2m, giving earnings per share of 93.2p and net asset value of 781p. Berkeley Group trades on a price-to-net-asset-value (PNAV) of 1.51, Panmure notes. "We believe the stock deserves to trade on both a premium to the sector and to NAV given the strong returns seen from the company. That said, looking at valuations across the sector at the moment, the current premium rating looks about fair," the broker concluded.
Northland Capital Partners reiterated its "buy" recommendation for the stock. "From here we see a further margin improvement as the lower cost land, acquired during the recession, starts to come into production. The overall reservations level is now 30% up on last year and, given the group’s approach to pricing and the better margin on new sites, this should be a significant driver of performance in the current financial year. This is supported by the group’s strong cash potential given its gross margin of over 28% and its £42m net cash position on 30 April 2011," the broker said. "With stronger site visitor levels, and a largely trade-up and overseas buyer market, the impact of restricted mortgage availability is less of an issue for the company. Nonetheless, it could fly if the shortage was overcome. The rating is a BUY and we see no reason to remove this stock as our favoured investment in the sector," the broker concluded.
CONT In respect of land bank investment, Berkeley has secured a further 7 sites in the quarter. Additionally, Berkeley continues to focus on adding value to its existing land bank from optimisation. Improved consents have been achieved in the period on a number of schemes, including sites in Battersea, Kew, North Bersted and Gillingham. These successes, coupled with further investment in work in progress, indicate that market conditions, as opposed to delivery, will be the most important factor in determining the extent of further growth in the business. Berkeley's emphasis on place making and putting the customer at the heart of every decision, coupled with a focus on London and the South East, has enabled it to outperform despite the well publicised wider market challenges we are experiencing. Our ability to produce homes and places where people want to live gives us confidence that we can achieve our return to shareholders over the long term.
At The Berkeley Group Holdings plc's ("Berkeley's") Annual General Meeting ("AGM") being held today, the Chairman, Tony Pidgley, will make the following Interim Management Statement, which covers the period from 1st May 2011 to 31st August 2011. Berkeley embarked on a five year plan in May 2010 to achieve the following near term operating targets during a period of recovery in the wider market. · Firstly, to achieve a compound return on equity, broadly equivalent to doubling profit before tax over 5 years; · Secondly, to grow the future gross margin in the land bank from £2 billion to some £3 billion in the same period; · Thirdly, to be the market leader in place making using the Building for Life criteria. With the full year results announced in June, the Board indicated its confidence that the business would maintain the reported rate of earnings growth and increase the value of the land bank in the current year. Additionally, the Board provided shareholders with long term visibility on both the timing and amount of potential returns, announcing its intention to return £13 per share (some £1.7 billion in total) over the next 10 years in a series of dividends payable on milestone dates in September 2015, 2018 and 2021. Since the original plan was announced in May 2010, trading has been ahead of management expectations and Berkeley has achieved a significant number of planning consents and invested in work in progress in line with its strategy. Together with the performance in the period since 1st May 2011, the Board believes that it is now positioned to achieve the profit target set in the five year plan at least 2 years earlier than originally anticipated, to the extent that market conditions prevail. Market conditions in the four months ended 31st August 2011 have enabled further growth in forward sales which are currently in excess of £850 million.
http://www.investegate.co.uk/Article.aspx?id=201109050700085760N
Merrill Lynch upgrades Berkeley Group from neutral to buy, target price raised from 1140p to 1555p.
Citigroup downgrades Berkeley Group Holdings from buy to hold, target price raised from 1250p to 1375p.
Deutsche raises target price on Berkeley Group Holdings from 1052p to 1244p.
Liberum upgrades Berkeley Group Holdings to buy from hold, target price raised from 1150p to 1530p
Commenting on the results for the year, Managing Director, Rob Perrins said: "I am pleased to report that Berkeley has performed strongly during the year, exceeding the targets set for both return on equity and land bank growth. The 20.2% growth in earnings per share reflects the depth of demand for well located property in London and the South East where supply is constrained and Berkeley has the land and expertise to deliver quality homes and places. In addition, Berkeley has acquired some 3,600 plots across 24 sites in excellent locations during the year, and has increased the number of active sites in line with our strategy to invest at this point in the cycle. The increase in forward sales of 25.5%, land bank growth of 13.1% and our planning successes contribute to an improvement in operational visibility. This provides us with confidence that Berkeley can maintain the rate of earnings growth in the current year and increase the value of the land bank over the next two years, through a combination of optimisation and land acquisition, before commencing the return in cash to shareholders envisaged in the long term plan."