Housebuilder Berkeley on track to post £600m profits despite Truss’ mini-budget shocks
Housebuilder Berkeley said it was on track to post a boost in pre-tax profits for the full year despite demand failing to fully recover from the shocks which came in the wake of Liz Truss’s disastrous mini-budget.
In a trading update this morning, the FTSE 100 firm said it expects to deliver a pretax profit of around £600m for the year to the end of April, in-line with prior guidance. The homebuilder posted profits of £551.5m for the full year last year.
Berkeley, the sixth biggest housebuilder in the UK, is also expected to rake in more then £2bn on exchanged forward sales at the end of the financial year
However, bosses said demand had remained slow since the end of September, when mortgage prices were plunged into chaos by Liz Truss’s mini-budget.
Rates shot up and hundreds of products were pulled from the market as brokers struggled to price in the volatility of the market.
“Berkeley’s current trading is in line with the levels identified in the December interim results, in which sales since the end of September 2022 were around 25 per cent lower than the strong first five months of the financial year,” the firm said in a statement.
“This is a resilient performance in the context of the market volatility since the end of September and reflects the underlying demand for quality homes in London and the South East.”
Sales pricing throughout the five months to the end of February trading period has remained firm and above business plan levels, Berkely added.
Berkeley said it remained focussed on cost control and maintaining operating margins, though build cost inflation “showed early signs of moderating”.