Sales still low for Berkeley, but hopes of record earnings high

Berkeley Group’s sales remain 25% below last year’s figures but the developer is optimistic about earnings. In a trading update this morning for the period from 1 November 2022 to 28 Februar 2023, the developer said current trading was “in line with the levels identified in the December interim results, in which sales since the end of September 2022 were around 25% lower than the strong first five months of the financial year”. It added: “This is a resilient performance in the context of the market volatility since the end of September and reflects the underlying demand for quality homes in London and the South East.” Berkeley believes it is still on target to deliver pretax profit of approximately £600m for the year ending 30 April 2023, with at least £1.05bn in aggregate to be delivered for the following two years. The developer made a pretax profit of £550m last year. It had been talking of a profit of £625m for this year. This year’s earnings are underpinned by forward sales, which are anticipated to be above £2bn by the end of April 2023. The position in April 2022 was £2.17bn. Berkeley said it expected to have £375m net cash at year-end, up from last year’s £269m, but that was subject to any further share buy-backs in the intervening period. The group has yet to sign contracts for the government Self-Remediation scheme, which will compesl housing developers to pay for building safety improvements or face being barred from operating in England. The developer added that it was “working through the associated procedural matters with government” and hoped to be “in a position to sign this agreement” by the DLUHC deadline of 13 March. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Image from Berkeley Group