Berkeley Group sees “opportunities to invest” in the market despite challenges in the housing market, the housebuilder said in its half-year results as pre-tax profit fell by 25.7%.
It delivered £401.2m of pre-tax profit in the six months to 31 October, down from £539.9m in the same period in 2017. However, with activity relatively stable it said would raise pre-tax profit guidance by more than 5% for the current financial year.
Berkeley delivered 2,027 homes in the first half, down by 4.3%, but added 11 new sites to its land holdings – all outside London. Two of those sites are in Birmingham where chairman Tony Pidgley said the company has a “progressive and refreshing partnership” with the local authorities.
A new phase of Berkeley’s strategy will see it targeting a long-term pre-tax return on equity of 15%, which it said was part of its commitment to investing in the wider community benefits that good-quality development brings.
It plans to maintain annual shareholder returns at £280m through to 2025.
In the past six months, its shareholder return has risen by 45.5% to £237.5m thanks to its share buy-back programme.
Pidgley said: “Much is documented on the challenges facing the housing market in the UK.
“We firmly believe the key to increasing housing supply is a renewed focus on partnership and collaboration between the public and private sectors.
“We need to make housebuilding a shared agenda and create an environment which actively encourages good quality developments to come forward, and then support them all the way through to completion.”
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