Housebuilder Berkeley Group has increased its pre-tax profit guidance for the current financial year by more than five per cent, it said today.
This comes despite its results for the first half of the year showing its pre-tax profit fell by a quarter compared to the same period last year, dropping from £539.9m to £401.2m.
Its guidance for the next two years remains unchanged.
The company sold 2,027 homes in the period, down from 2,190 in 2017, at an average selling price of £740,000, which is up from £721,000 in 2017.
Chief executive Rob Perrins said: “With the resilient start to the year, Berkeley is increasing its pre-tax profit guidance for the current year by at least five per cent and now anticipates a similar split between the first and second half to last year when 55 per cent was earned in the first six months of the year.”
He added: “This is in the context of a short term outlook that is clearly uncertain due to the ongoing Brexit process and a number of headwinds in the operating environment in London and the South East. This uncertainty affects sentiment and confidence which has a consequential adverse impact on investment levels and transaction volumes with a number of developers withdrawing from these markets.”
George Salmon, equity analyst at Hargreaves Lansdown, said: “These are strong results from Berkeley. Upgraded profits and a balance sheet that looks even more resolute has given the group the confidence to promise a steady flow of shareholder returns all the way out to 2025.
"However, there’s only so much the group can do to look after its share price. Sentiment will remain closely tied to the Brexit barometer, since London could well be in the eye of the storm should a disorderly departure trigger a housing meltdown."
Cash due on forward sales was down 14 per cent on the same period as last year at £1.9bn.
Net cash was up 25 per cent at £858.7m.