Berkeley: On track but government housing plans require a ‘change of attitude’

Housebuilder Berkeley is on track to deliver £525m of pre-tax profit for the full year, according to an update from the firm this morning. 

The business, which is based in Cobham, England, said 90 per cent of this profit has already been secured through exchanged sales contracts.

Berkeley also said it is “fully committed” to delivering the new homes the country needs.

This follows a difficult period for the construction industry which has seen housebuilding in contraction for 19 out of the past 21 months due to the impact of high costs and sluggish demand.

The board said: “Berkeley supports the proposed changes to the planning system and the Government’s aspiration to deliver 1.5m new homes across this Parliament as part of its mission for growth.

“Achieving this ambition requires a change of attitude and a refreshed partnership approach to allow developments, that are currently stalled, to come forward.”

The housebuilder told shareholders it expected pre-tax profit for the year to be weighted towards the first half, with its operating margin therefore slightly ahead of its long-term range during the period.

It expected net cash at the end of October to be £450m, from £532m at the end of April, following shareholder returns of £229m in the first half.

This included the £184m proposed special dividend that is subject to approval by shareholders at today’s AGM.

The board added that the ambitious plan from the new Government brings with it a “number of changes to the operating environment”, the impact of which “Berkeley will fully evaluate ahead of updating the market with its interim results in December.”

Berkeley’s results end a mixed week for the housing sector. Britain’s biggest housebuilder Barratt reported a fall in completions, while Vistry significantly outperformed the wider market and said it is on track to build close to 20,000 homes this year.