Housebuilder Berkeley Group this morning upgraded its earnings guidance for the current financial year by 5 per cent, after a “resilient sales market” coupled with its investment in new regeneration development projects across London helped it deliver profit ahead of estimates.
Earnings guidance was raised for pre-tax profits to increase by 5 per cent a year for the next three financial years, with Berkeley projecting approximately £625m pre-tax profit in the year ending 30 April 2025.
Group profit jumped more than a quarter (26 per cent) to £290.7m in the six months to 31 October, up from £230.8m in the same period a year earlier, and ahead of analysts estimates of £280m.
Berkeley posted a strong 34.8 per cent increase in earnings per share to 201.7p, up from 149.6p a year earlier, which helped the housebuilder reinforce its commitment to £282m (£2.52 pre share) per annum ongoing shareholder returns up to 30 September 2025.
By the six months ending 30 September 2022, Berkeley will return £141m to shareholders, £35m of which has been spent on share buybacks since this September.
“The performance reflects Berkeley’s conviction and investment in its strategy over the last 18 months, which is focused on London and the South East, the country’s most under-supplied housing markets, in spite of the challenges presented by the pandemic, supply chain constraints and regulatory environment,” said CEO Rob Perrins.
“Over this time, we have continued to deliver in line with our uniquely long-term operating model, progressing construction across our portfolio of 64 live projects.
“These include 30 long-term, highly complex regeneration sites, of which 25 are now in delivery.”
Berkeley’s share prices is expected to rise today on the the updated guidance, but analysts at JP Morgan note that the group’s shares are down 8 per cent in the year to date, significantly underperforming for its sector.