The Berkeley Group has released its trading update for the period from 1st November 2024 to 28th February 2025.
The company reaffirmed its plan to deliver at least £975m in pre-tax profit across FY25 and FY26.
Sales reservations improved modestly, but Berkeley noted that further growth depends on economic stability and interest rate cuts.
Berkeley maintained a strong financial position but expects net cash to be around £300m by 30th April 2025, down from £474m in October, due to accelerated shareholder returns and settling land creditors.
Planning reforms have positively impacted Berkeley’s long-term regeneration sites, though the company remains cautious about regulatory changes impacting new home delivery.
Berkeley continued returning capital through £71.3m in share buy-backs and declared a 33p interim dividend.
A remaining £156.1m is due for shareholder returns by September 2025.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “There were no surprises at the door as Berkeley delivered its third-quarter update.
“Remarks echoed the trend seen across other housebuilding peers, with sales rates improving over the year.
“While these are now running ahead of last year’s level, there’s still some way to go to reach the boom of three years ago.”
Chiekrie added: “Management pointed to a need for greater economic stability and interest rate cuts to help drive the next leg of demand.”
“While the picture has improved, the sector’s not out of the woods yet.
“February’s RICS survey data suggested the property market might be losing some of its recent momentum, with some buyers and sellers stepping back amid caution around looming stamp duty changes.”
He said: “Despite the share price falling around 30% since September 2024, Berkeley remains sitting on solid foundations.
“A strong order book gives great revenue visibility, allowing the group to double down on its profit guidance for this year and next.
“The balance sheet looks strong, and with another £156.1mn of dividends and share buybacks to be completed by September 2025, there’s plenty of appeal for investors.
“But if interest rate cuts and a housing market recovery comes through in the near to medium term, other names in the sector are likely to catch more wind in their sails.”
