Berkeley suspends £455m shareholder payout over coronavirus
Housebuilder Berkeley Group has suspended a £455m shareholder payout until there is more clarity on the economic impact of coronavirus.
The property developer said there had been no noticeable impact on its own business so far, but warned that the effect on UK firms is still unknown.
Berkeley Group said it was responsible to approach the next six months with “a reduced risk appetite and heightened sense of caution”. While it still intends to make the payout, the company will reassess the situation in June.
In the meantime, the company will revert to the original shareholder returns programme with a payout of a £125m dividend on 31 March and commitment to a £140m dividend to be paid by 30 September.
In a statement Berkeley Group said: “Today’s announcement is made in the context of the current increased macro uncertainty, which has been uniquely impacted by the global spread of coronavirus.
“While there has been no noticeable impact on Berkeley’s business to date, the ultimate impact on UK business is unknown.
“There is no recent historic precedent and for this reason it is absolutely right for any responsible business to approach the next six months with a reduced risk appetite and heightened sense of caution.”
Berkeley said the suspension “in no way alters the board’s view of the long-term value of the business”.
The company said it has net cash in excess of £1bn, with a further £750m of bank facilities available.
The property firm also said it is on track to meet market expectations for the year ended 30 April and its long-term target of £3.3bn pre-tax profit in the six years to 30 April “assuming a measured outcome to the effect of coronavirus”.