# Berkeley Group on track to maintain shareholder returns

- Link: https://www.directorstalkinterviews.com/berkeley-group-on-track-to-maintain-shareholder-returns/4121121945
- Published: 2023-06-21T09:12:46+01:00
- Author: Amilia Stone

**[Berkeley Group Holdings plc](https://www.directorstalkinterviews.com/ftse-company/berkeley-group-holdings/bkg.l)**(
LON:BKG) has announced its audited results for the year ended 30 April 2023. 

> **Rob Perrins, Chief Executive, said:**
> “Berkeley has delivered pre-tax profits in line with the guidance provided at 
> the start of the financial year, maintained our shareholder returns programme 
> and increased the net cash position.  This is a very strong performance by our
> sales and construction teams, given market conditions and changing building regulations,
> and reflects the resilience of Berkeley’s business model with its focus on the
> country’s most undersupplied markets.
> We continue to see good levels of enquiry for well-located homes built to a high
> standard of design and quality but recognise that the market is likely to lack
> urgency until there is more certainty over the trajectory of interest rates.
> Berkeley’s focus on regenerating long-term brownfield sites has driven lasting
> positive change within some of the country’s most deprived communities and differentiates
> Berkeley as the only large-scale UK developer aligned with Government’s brownfield
> first agenda.  A deeper understanding and recognition of the benefits of, and 
> challenges to, this highly sustainable form of development is required within 
> the planning system to ensure the tremendous opportunity it presents for society,
> communities and the economy is not missed for future generations. 
> The challenge is increased when set alongside the uncertainty from a continually
> evolving and increasingly burdensome regulatory environment. While well-intended,
> this is constraining investment into brownfield regeneration and homebuilding.
> If housing delivery is to be maintained the planning system needs to respond to
> these challenges and certainty is needed in the regulatory environment as a matter
> of immediate priority. 
> Looking forward, we are well placed to meet our guidance for the next two financial
> years and continue investing in our existing regeneration sites, but will remain
> cautious in committing to new investment until the conditions for growth are in
> place.
> We remain focused on meeting our long-term pre-tax ROE target of 15% across the
> cycle and delivering against our shareholder returns programme.  At the same time,
> we will continue to serve our customers and the communities in which we work, 
> delivering individually designed, well-connected, nature-rich neighbourhoods with
> quality new homes across all housing tenures.”

**SUMMARY OF EARNINGS, SHAREHOLDER RETURNS AND FINANCIAL POSITION**

|  |  |  |  |  |  | Change | 
| **Earnings** |  | 30-Apr-23 |  | 30-Apr-22 |  | % | 
|  |  |  |  |  |  |  | 
| Profit before tax |  | £604.0m |  | £551.5m |  | +9.5% | 
| Earnings per share – basic |  | 426.8p |  | 417.8p |  | +2.1% | 
| Pre-tax return on equity |  | 18.7% |  | 17.5% |  |  | 
|  |  |  |  |  |  |  | 
| **Shareholder Returns** |  | 30-Apr-23 |  | 30-Apr-22 |  |  | 
| Share buy-backs undertaken |  | £155.4m |  | £63.7m |  |  | 
| B-Share capital return |  | – |  | £451.5m |  |  | 
| Dividends paid |  | £98.5m |  | – |  |  | 
| Shareholder returns |  | £253.9m |  | £515.2m |  |  | 
| Share buy-backs – volume |  | 4.0m |  | 1.5m |  |  | 
| Average price paid for share buy-backs |  | £38.25 |  | £41.81 |  |  | 
| Dividends / B-Share Return per share |  | £0.91 |  | £3.71 |  |  | 
|  |  |  |  |  |  |  | 
|  |  | As at |  | As at |  | Change | 
| **Financial Position** |  | 30-Apr-23 |  | 30-Apr-22 |  | absolute | 
| Net cash |  | £410m |  | £269m |  | +£141m | 
| Net asset value per share |  | £31.01 |  | £28.18 |  | +£2.83 | 
| Cash due on forward sales ^((1)) |  | £2,136m |  | £2,171m |  | -£35m | 
| Land Holdings – future gross margin |  | £7,629m |  | £8,258m |  | -£629m | 
| Pipeline sites / (plots (approx.)) |  | 14 (14,000) |  | 6 (8,000) |  | +8 (6,000) | 
| ^((1)) Cash due on private exchanged forward sales completing within the next three years |  |  | 
| See Note 8 of the condensed consolidated financial information for a reconciliation of alternative performance measures |

·     Forward sales sustained at a healthy £2.1 billion, with the value of reservations
for the financial year around 15% lower than the comparative financial year.

·      Net cash increased to £410 million, with £1.2 billion of borrowing capacity
providing total liquidity of £1.6 billion.

·      Sales pricing remains firm and above business plan levels with build cost
inflation moderating.

·      Berkeley reiterates its guidance of delivering pre-tax profits of at least
£1.05 billion across its next two financial years (FY24 and FY25) combined, which
is likely to be slightly weighted to the FY24, in line with market consensus and
the objective of delivering a sustainable pre-tax ROE of 15% through the cycle.

·    The Company reaffirms its commitment to £283 million (£2.63 per share) per 
annum Shareholder Returns up to 30 September 2025.

·    Berkeley will continue to be cautious on new investment and sales launches 
given the volatile operating environment, which includes the current macro-economic,
political and regulatory environments.

·    One site added to the long-term pipeline and approximately 5,500 plots on future
sites transferred from the land holdings to the long-term pipeline due to uncertainty
in the planning system; the majority of these sites are at appeal or subject to 
a call-in.

·      26 of 32 long-term complex regeneration sites in production, sustaining delivery
profile for the next 10 years.

**DELIVERING FOR ALL STAKEHOLDERS**

·   4,043 homes delivered, plus 594 in joint ventures (2022: 3,760, plus 872) – 
86% of which are on regenerated brownfield land.

·     Approximately £560 million of subsidies provided to deliver affordable housing
and committed to wider community and infrastructure benefits in the year.

·   The Company is delivering some 10% of London’s new private and affordable homes–
supporting an average of approximately 27,000 UK jobs per annum directly and indirectly
through its supply chain over the last five years.

·      Industry leading Net Promoter Score (> 70) and customer satisfaction ratings
maintained.

·     Since 2017/18 all new planning applications have committed to biodiversity
net gain, in total 54 developments which together will create more than 550 acres
of new or measurably improved natural habitats.

·    Scopes 1 and 2 emissions reduction target met well ahead of the 2030 science-
based target and 23 embodied carbon assessments completed as we progress our Climate
Action programme and journey towards net zero.

·      Rated “A-” by CDP for climate action and transparency and AAA rated in the
MSCI global ESG index. 

·   Gold membership of The 5% Club, with 10% of direct employees in ‘earn and learn’
positions as graduates, apprentices or sponsored students within the year. 

**Investor and Analyst Presentation:**

A pre-recorded presentation by the Directors on the results will be made available
on the Company’s website at 11:00 today – https://www.berkeleygroup.co.uk/investors/
results-and-announcements.

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