Berkeley Group reports FY profit and net cash growth after share buy-backs

Berkeley Group Holdings plc (LON:BKG) has announced its audited results for the year ended 30 April 2026.

Rob Perrins, Executive Chair, said:

“Berkeley has delivered £451 million pre-tax profit for the year, with net cash increasing to £363 million, after £233 million of share buy-backs, and closing net asset value per share up 9% to £39.17. This robust performance, which is in line with guidance, reflects the focused execution of our Berkeley 2035 strategy, disciplined cost control and our agile response to extremely challenging macro-economic and regulatory conditions.

We delivered 4,203 good green homes within the most under-supplied regions of the UK, with 90% built on underused brownfield land within designated regeneration areas. Our projects contributed £530 million in subsidies to deliver affordable housing and commitments to wider infrastructure and community benefits this year. Few business models deliver this level of public good.

In the current environment, our focus is on maximising long-term shareholder value by optimising our existing land holdings through re-planning to restore and enhance margins, rather than acquiring new sites; controlling operating costs; tightly sequencing construction in line with prevailing demand; and flexing the pace of Build-to-Rent (“BTR”) investment.  This prioritisation of cash generation and disciplined capital allocation will allow us to continue with shareholder returns, increasing the cadence of share buy-backs where the share price is below net asset value per share. 

In its desire to stimulate economic growth, the Government has done an excellent job in restoring the fundamentals of housing policy, which had been abandoned by its predecessor. It has also tried to address the viability challenge with the Homes for London package which can make a huge difference if implemented constructively and with urgency.

However, it now takes at least eight years to complete an apartment building in the capital from the point of acquisition, through planning, agreement of Section 106 requirements, consultation with statutory consultees, clearance of pre-commencement conditions, detailed design, Building Safety Regulator (BSR) approval and construction.  Ten years ago, it took five years. A further 18 months is required for an appeal or call-in.  There is no certainty that a planning consent will be secured at the end of this process as our recent experience at Peckham demonstrates where the Inspectorate determined that the Peckham Rye conservation area would suffer too much harm from new housing on the site of a run-down shopping centre.  This after ten years of engagement on a site allocated for housing in the local plan.

Every part of the system needs to work to reduce the time taken to get buildings into development and allow homebuilders to make a return commensurate with the risk that can attract the necessary investment capital. Currently more homes are being lost to other uses than being built.  This can be addressed with the necessary policy changes and strong political leadership.

Demand for and supply of new homes has been hit by over ten years of continual SDLT increases and new surcharges. Introduced by stealth during a period when interest rates were 0.25%, these taxes have curtailed the early investment in new homes since interest rates began to normalise at the end of 2022.  It is this early investment that provides the necessary certainty for brownfield sites with their considerable upfront costs to come forward, thereby providing London with the new affordable homes and homes for rent it so desperately needs.

SDLT should be reduced on all new homes to a maximum of 3% (zero for first-time-buyers) and the SDLT surcharges that deter the vital investment in new build homes so damagingly should be removed. These changes will be fiscally neutral or better due to the considerable increase in tax revenues generated from greater transactional activity and by stimulating additional homebuilding which drives corporation tax (which is 29% on all residential property developers’ profits) and payroll taxes (direct and throughout the supply chain). 

These structural supply and demand challenges have left London delivering less than 10% of its MHCLG annual new homes target, with no prospect of material improvement without more decisive intervention as it is clear that policy changes to date are not feeding through to delivery.  Specifically:

1.   The Homes for London package should be fully implemented forthwith and remain in place until London’s housing numbers are restored.

2.   The time taken to deliver new apartment buildings needs to reduce from eight to five years, which it was ten years ago. This requires recognition of the appropriate required development return, with equitable review mechanisms that incentivise development. In addition, Section 106 mechanisms should be objectively assessed in a timely fashion with competing policy requirements and layering removed.

3.   The excessive tax burden, that was introduced in a different economic paradigm, must be reduced to unlock demand and attract the essential investment without which regeneration schemes cannot proceed.

4.   All regulators, including the BSR, need to be appropriately resourced to meet targeted statutory deadlines.

If these measures are introduced, London can meet its housing targets, tax revenues will grow and national GDP will increase by 1%.

In the longer term, London’s outlook is hugely compelling and the city’s core strengths and appeal remain firmly intact. The capital is a true global hub, the largest financial centre in Europe and the second largest in the world. It offers security, heritage, and investment potential in an uncertain global environment. 

Berkeley’s performance is driven by the passion, skill and commitment of our people. They continue to deliver hugely positive outcomes for communities, the economy and the environment in the most challenging of conditions, and I would like to thank them on behalf of the Board and shareholders.”

Summary of FINANCIAL POSITION, Earnings AND Shareholder ReturnS

 ⁽¹⁾ See Note 9 of the Condensed Consolidated Financial Information for a reconciliation of alternative performance measures  

·      Cash due on forward sales has reduced to £1,006 million (2025: £1,403 million), with legal completions in the year ahead of reservation rates, with the value of underlying sales reservations 15% lower.

o  Customer interest encouraging throughout, as evidenced by enquiries and leads

o  Good transaction levels from customers with current need or strong liquidity

o  Forward sales more impacted by lack of urgency in the market

·      Operating efficiency maintained with operating costs 6% lower than last year, in an inflationary environment. 

·      Net cash is £363 million, after shareholder returns of £233 million, land creditor payments of £253 million and £69 million of BTR construction cost.

·      Bank facilities refinanced after the year-end, with a new 5-year term and borrowing capacity increased from £1.2 billion to £1.4 billion, providing strong total liquidity of £1.8 billion.

·      Net asset value per share has increased by 9.0% to £39.17 and reflects historic cost.

·      Unrivalled land holdings with £6.4 billion of future gross margin.

CAPITAL ALLOCATION AND BERKELEY 2035

·      Berkeley 2035 strategy, which provides agility to adjust capital allocation between key value drivers, was rephased in the year to reflect the prevailing operating environment. Now targeting:

o  £1.4 billion pre-tax profit over the next four years (FY27 to FY30); and

o  15% Return on Capital in the core business as soon as possible (11% to 15% in the meantime).

·      £233 million of shareholder returns completed by 30 April 2026; £112 million of which contributes to the next shareholder return target of £640 million by September 2030.

·       Limited new land investment but new 8,000 homes masterplan at The Green Quarter in Ealing, new planning consents at Borough Triangle (890 homes), Hemel Hempstead (485 Homes) and Brighton Gasworks (480 homes), and numerous amendments to improve existing planning consents contributing to over £250 million value added to land holdings.

·      Berkeley Living, our BTR platform, now has three completed sites in lease-up with leasing velocity and rents at target levels. In total, 1,122 homes across six buildings to be leased and rents stabilised over next 18 months.

DELIVERING FOR ALL STAKEHOLDERS

·      4,076 homes delivered, plus 127 in joint ventures (2025: 4,047, plus 282) – 90% of which are on brownfield land.

·      Contributed over £530 million of value to community infrastructure and benefits, including affordable housing.

·      Industry-leading Net Promoter Score +77.9 and customer satisfaction ratings maintained. Ranked first for both Customer Care and Build Quality by HomeViews, part of Rightmove.

·      Updated science-based targets validated by the SBTi and more than 70 embodied carbon studies completed.

·      Winner of the Biodiversity Protection Award at the National Sustainability Awards as a recognised pioneer in the industry for biodiversity net gain, with 56 developments committed to date.

·      Gold membership of The 5% Club, with 8.5% of direct employees in ‘earn and learn’ positions as graduates, apprentices or sponsored students on our award-winning programmes within the year.

·      ‘AAA’ MSCI ESG rating and rated an Industry Top-Rated company and Low Carbon Leader by Sustainalytics.

·      Placed on CDP’s prestigious “A” list for both Climate Change and Water Security.

Investor and Analyst Presentation:

A pre-recorded presentation by the Directors of Berkeley 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.