Berkeley forecasts flat profits for two years as London lags housing boom
Berkeley Group PLC (LON:BKH) said it expects profits to be flat for the next two years after edging up in the year to April just ended.
Pre-tax profits rose 3% to £518mln and the London-focused housebuilder forecast them to stay around this level until 2023.
The FTSE100 group sold 2,825 new homes (2020: 2,723) across London and the South East during the year at an average selling price of £770,000 (2020: £677,000).
London has lagged the housing boom in other parts of the UK as commercial areas have remained largely shut and people work more from home outside the capital. Berkeley said the higher prices reflected a change in the mix of developments.
Cashflow generated was also flat but the group announced a £450mln payout to shareholders comprising £228mln of surplus capital plus a payment of £222mln that had been flagged previously.
Rob Perrins, chief executive, said: “We ended the year in great shape, with net cash of £1.1bn, cash due on forward sales of £1.7bn and the estimated future gross margin in our land holdings increased to £6.9bn, with a further £0.6bn in the near-term pipeline. “