Last checked at 27 Mar 2020 09:20
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
27 March 2020
THE BERKELEY GROUP HOLDINGS PLC
COVID-19 Update
The Berkeley Group Holdings plc ("Berkeley" or the "Company") today announces how it is responding to the COVID-19 virus. Berkeley is the country's leading place-maker, operating principally in London, Birmingham and the South of England. We create beautiful, successful places where communities thrive and where people of all ages and backgrounds enjoy a great quality of life.
Operations
The health and safety of our people, subcontractors and customers is Berkeley's first priority. During the course of the Coronavirus crisis we have operated in accordance with Government and Public Health's Guidance, modifying our working practices to observe social distancing protocols, to continue many of our site activities.
However, our supply chain is experiencing understandable and increasingly considerable challenges in maintaining the delivery of materials to site. Therefore, we are now progressively managing the safe, temporary suspension of work on developments where this is the case. This will take time to achieve as critical in-progress works are brought to the stage where they can be safely suspended and secured.
We are focusing our efforts on completing a number of private and affordable homes which are close to handover and which many customers, across all tenures, will still need us to finish. Our site teams will continue to deliver these remaining essential works safely, and in-line with the Government's social distancing guidance.
The significant majority of our office-based staff are working from home and we have closed our sales centres and show homes.
We would like to record our thanks to all our staff, subcontractors and supply chain who have worked, and continue to work, tirelessly to meet our commitments to our customers in a safe manner in these unprecedented times.
Profit Guidance and confirmation of sustainability of Shareholder Returns
Due to this significant disruption, which affects the final six weeks of Berkeley's financial year, we now anticipate profits for the year ending 30 April 2020 will be in the region of £475 million, based upon a number of operational assumptions. Prior to the escalation of the disruption from COVID-19, Berkeley was on track to meet the Market's profit expectations for the year.
We are suspending future guidance until there is greater clarity of the impact of COVID-19 on business and the wider economy beyond 30 April 2020. Our priority is to maintain the dividend and deliver a pre-tax return on equity of 15% over the next six years, which the Board believes is the appropriate risk-adjusted target return across the cycle for Berkeley.
The dividend of 99.32 pence per share (£125 million), announced in the Company's 12 March Trading Update, will be paid to shareholders on 31 March 2020. The Board also confirms its intention to make the next £140.1 million shareholder return by 30 September 2020 through a combination of share buy-backs and dividend (£6.0 million of which has already been met through share buy-backs) and that it will reassess the position with regard to the postponed enhanced capital return when the Company announces its full year results for the year ended 30 April 2020.
Financial Strength
Financial strength and the recognition of the risks and cyclical nature of its activities has always been at the heart of Berkeley's business model. The Group currently has in excess of £1.0 billion of net cash, after payment of the £125 million dividend to be paid on 31 March 2020. Including bank facilities, Berkeley has total potential liquidity of £1.75 billion.
END
For further information please contact:
The Berkeley Group Holdings plc Novella Communications
R J Stearn Tim Robertson
T: 01932 868 555 T: 020 3151 7008
The person responsible for arranging for the release of this announcement on behalf of Berkeley is Richard Stearn, Group Finance Director.
LEI: 2138009OQSSLVVHQAL78