(Alliance News) - Berkeley Group Holdings PLC on Friday posted a fall in profit for the first half of financial 2021 but confirmed its targets for shareholder returns.
Shares in the FTSE 100-listed housebuilder were trading 2.8% lower at 4,716.00 pence each on Friday morning in London.
For the six months ended October 31, Berkeley posted pretax profit of GBP230.8 million, down 17% from GBP276.7 million recorded the year prior. This was as revenue slipped 3.8% to GBP895.9 million from GBP930.9 million.
The company sold 1,104 homes during the period, down 21% from 1,389 the year before. However, the average selling price rose 24% to GBP799,000.
Net asset value per share rose 0.4% to GBP24.82.
Looking ahead, Berkeley said it is on track to achieve a pretax return on equity of at least 15% for the six years to April 2025, adding that this equates to an annual pretax profit of GBP500 million, a figure it expects to deliver for the full year, in line with previous forecasts. Pretax profit for the twelve months to April 30, 2019 was GBP775.2 million.
The company also outlined plans for a previously deferred GBP455 million to go towards new land investment or enhanced cash returns or both. Back in June, it deferred for up to two years, a GBP455 million return of surplus capital, due to Covid-19 uncertainty. It had been due to be delivered by March 2021.
On Friday, the company confirmed the previously earmarked sum will now be delivered by the end of April 2023, "through either enhanced cash returns to shareholders, incremental land investment or a combination thereof". During the half year, the housebuilder returned GBP171.4 million to shareholders, up 14% from GBP149.8 million a year earlier.
As at October-end, Surrey-based Berkeley had cash of GBP1.25 billion, down from GBP1.36 billion at October 31, 2019.
By Ife Taiwo; ifetaiwo@alliancenews.com
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Berkeley Group (BKG)