Berkeley Group has announced its unaudited preliminary results for the year ended 30 April 2016. The Group reported an adjusted profit before tax of £479.9 million, up 5.6% from £454.6 million for the same period in 2015. The ‘adjusted’ profit before tax excludes £51.0 million of profit (2015: £85.1 million) from the sale of ground rent assets.
Net cash was recorded at £107.4 million, compared with £430.9 million for the same period last year, after dividend payments of £259.5 million and investment in inventories and joint ventures. Net asset value per share increased 9.6% to 1,314 pence (April 2015: 1,199 pence), following payment of a £259.5 million (190 pence per share) dividend. Forward sales increased significantly to £3.25 billion from £2.95 billion in 2015, showing outstanding balance sheet strength.
“I am pleased to announce pre-tax profits for Berkeley of £530.9 million for the year ended 30 April 2016,” said Tony Pidgley, Chairman of Berkeley Group. “Berkeley remains ungeared with net cash of £107.4 million, cash due over the next three years on forward sales of £3.25 billion and is maintaining its earnings guidance for the three years ending 30 April 2018.2
“Following the enhancements to Berkeley’s dividend return plan announced in December 2015 which increased the target returns by 2021 to £16.34 per share, from £13.00 per share, the Board has declared a further interim dividend of £1 per share. This will be payable on 15 September 2016 to shareholders on the register on 12 August 2016.”
Pidgley, who will be speaking at the WhatHouse? New Homes Debate 2016, said that the Group is encouraged by the priority accorded to housing by the new Mayor of London, Sadiq Khan. “This issue has to become a political priority if we are to have any chance of delivering 50,000 new homes a year in London,” he said. “His administration has already shown welcome signs of adopting an approach to delivery which is both ambitious and pragmatic.
“In terms of housing policy, it is important that policies developed are consistent with the ambition of delivering more homes across all forms of tenure. This includes: ensuring Local Plans are in place across the country; finding the right framework for property taxation; and recognising the pressure that the conflicting demands of CIL, Section 106 and affordable housing place on the delivery of new homes. None of this is easy but if we get it right, it will have a profoundly positive impact on the future of London and the country as a whole.
“I firmly believe that place-making is a force for good in the country – giving people a home, creating strong communities and generating jobs and growth – making our society better in many different ways. We are proud of the places we create at Berkeley and I would like to thank each and every one of our people for their dedication, enthusiasm and innovation which has made the last twelve months another successful year for Berkeley.
“We live in exciting and fast moving times. There are always headwinds, although the strength of these ebb and flow. Berkeley operates the right business model and strategy for a cyclical market. In particular, our unique operating model of developing complex sites which others are not willing to take on, recognises the additional operational risk that comes with this strategy whilst maintaining the financial strength that it demands. The current plan places a premium on careful capital allocation to create consistent and sustainable added value returns for shareholders, through the delivery of homes and places of the highest quality.”