Berkeley lifts outlook amid improving market conditions

19th Jun 2024 07:19

(Sharecast News) - UK housebuilder Berkeley lifted its earnings outlook by 5% for the current financial year amid tough trading conditions and unveiled plans to enter the London rental market.

Berkeley, which focuses on building high-end homes in London and regenerating brownfield sites, said it expected 2025 pre-tax profit to be £525m as it reported an 8% fall in pre-tax profit for the year to April 30 to £557.3m, but above forecasts of £549.5m

"We continue to see good levels of enquiry for well-located homes built to a high standard of design and quality but recognise that the current lack of urgency in the market is likely to remain until the long-anticipated reduction in interest rates commences," the company said on Wednesday.

It also announced the creation of its own build-to-rent platform "to maximise returns in today's market conditions" and had identified around 4,000 homes across 17 of its brownfield regeneration sites as an initial portfolio.

Shareholders were rewarded with a 33p-a-share dividend accompanied by a 174p-a-share special payout with a stock consolidation planned later in the year.

"Housing is a central issue in the upcoming General Election and we are optimistic that the next government will prioritise increasing housing supply of all tenures to deliver the homes the country badly needs where they are needed most," the company said.

"This is not straight-forward due to the multiple demands on development and the impact of policy and regulatory changes of recent years."

Excluding joint ventures, Berkeley delivered 3,521 homes in the period, down from 4,043 the previous year. Average selling prices came in at £664,000, up from £608,000 the previous year.

Reporting by Frank Prenesti for Sharecast.com