Berkeley pre-tax profits up 33.9%

Berkeley Group posts pre-tax profits of £392.7 million for the six months to the end of October - up 33.9% on last time.

This is from the sale of 2,076 homes (2015: 2,091) at an average selling price of £655,000 (2015: £506,000), reflecting the mix of properties sold in the year.

TYhe group says: "Having delivered pre-tax profits of £0.5 billion for the year ended 30 April 2016, these results mean that the Company remains firmly on target to deliver pre-tax profits of £2.0 billion over the three year period ending 30 April 2018.

"The remaining 18 month period is underpinned by forward sales. In total, Berkeley has £2.9 billion of cash on exchanged sales contracts which is due over the next three years. As always, the scale of the regeneration schemes from which we expect to generate the remaining earnings makes the delivery of profit in specific annual periods sensitive to timing and we prioritise quality ahead of individual period financial targets. The strength of this position gives Berkeley confidence to announce a new five year target to deliver at least £3.0 billion of pre-tax profits in the five years beginning 1 May 2016.

"Excluding an hiatus around Brexit, reservations for the six months remain in line with the beginning of the calendar year and are approximately 20% down on the same period last year as a result of the market adjusting to increased stamp duty and the economic uncertainty arising from the EU Referendum result. The underlying market has begun to adjust to these events and Berkeley plans to launch new product in the New Year which will be delivered in financial years beyond the period to April 2018."

Highlights:

- Net asset value per share - up 7.9% to 1,418 pence (April 2016: 1,314 pence)

- Forward sales - £2.90 billion (April 2016: £3.25 billion)

- Land bank - £5.9 billion of estimated future gross margin (April 2016: £6.1 billion) across 42,125 plots (April 2016: 42,858 plots)

- Market conditions - Excluding an hiatus around Brexit, reservations are 20% down on the same period last year, as a result of the market adjusting to increased stamp duty and the economic uncertainty arising from the result of the EU Referendum

- People - Over 15,000 people working across our sites, an increase of some 8.7% since April 2016, with 603 apprenticeships in the six months