Berkeley Group released its interim results for the six months ended 31st October 2024, reporting 2,103 homes delivered and a £275m pre-tax profit.
The company highlighted its growth strategy, ‘Berkeley 2035’, aimed at fostering long-term shareholder value.
This strategy focuses on flexibility in capital allocation, enabling investment in land, build-to-rent (BTR) projects or direct returns to shareholders as opportunities arise.
Additionally, 177 homes were delivered through joint ventures, marking an increase from 204 last year.
Over £300m was provided in subsidies to support affordable housing and broader community benefits during this period.
Berkeley accounted for around 10% of new private and affordable homes in London, sustaining approximately 26,000 jobs in the UK over the last five years.
Sales remained steady compared to FY24 run rates with an uptick in recent weeks, keeping Berkeley on track to meet its pre-tax profit guidance of £525m for the current year and £450m for FY26.
Operating costs remained stable, contributing to a net cash position of £474m.
Following £242m in shareholder returns during the period, the company reported a total liquidity of £1.7bn.
Richard Hunter, head of markets at interactive investor, said: “Investing in the housebuilding sector is a long-term pursuit and the announcement of a new ‘Berkeley 2035’ growth strategy highlights this approach.
“The strategy has a number of strands, with the headlines being projected growth in the Return on Capital Employed, further investment in the group’s recently launched ‘Build to Rent’ platform and an ongoing focus on shareholder returns.
Hunter added: “Consumer confidence remains extremely guarded, the possibility of higher for longer interest rates is keeping some potential new buyers on the sidelines, while the group also notes the overhang of additional building regulations as part of the new industry regulator’s formation.
He said: “Until such time as consumer confidence returns and the revitalised planning system is able to bed in, the sector as a whole is likely to remain under some pressure.
“Indeed, Berkeley’s share price has fallen by 16% over the last year, as compared to a gain of 11% for the wider FTSE100, with a drop of 24% over the last six months contributing to the net decline.
“Well-regarded though the company may be, the market consensus of the shares as a hold implies that investors are not yet quite convinced that the new strategy and the existing sector obstacles are at the required inflection point.”
