Berkeley Group, the housebuilder, has pushed back a £455m payout to shareholders by two years because of the coronavirus pandemic.
The FTSE 100 company saw sales fall dramatically over April and May, pushing its full-year profit and revenue down more than one-third each.
However, shares in the company rose 3.6 per cent this morning as it reassured investors that its financial model could withstand the crisis.
Profit before tax fell 35 per cent year-on-year to £503.7m, while revenue was also down 35 per cent, to £1.9bn in the year ended 30 April 2020.
Sales in April and May were down around 50 per cent, although pricing was ahead of expectations, it said.
Berkeley sold 2,723 homes during the year for an average price of £677,000, down from 3,698 homes at £748,000 last year.
The fall in average selling price reflects a differing mix of properties, it said.
The group ended the year with £1.1bn in net cash, up 16.8 per cent year-on-year.
Forward sales amount to £1.9bn, compared with £1.8bn last year.
Why it’s interesting
The housebuilder said that although the coronavirus pandemic had a “significant impact on our operating environment,” the firm was designed to withstand a volatile market.
“Berkeley’s strategy is designed for a high risk cyclical housing market, so when conditions shift for any reason we have high liquidity, long-term cash flow visibility and highly skilled teams with the grip to effect decisive operational change.”
The company added that it has not had to call on the government for financial support, or had to furlough workers.
Berkeley said it remains committed to shareholder returns of £280m a year until 2025.
However, the deferral of the £455m payout will give it the flexibility to buy new land, it added.
What Berkeley Group said
Chairman Tony Pidgley said: “The onset of the Covid-19 lockdown in the last five weeks of the period had a significant impact on our operating environment, but Berkeley ended the year in a strong financial and operational position as our resilient business model and agile working culture defined our response.”