Berkeley Group Holdings plc (LON:BKG) is holding its Annual General Meeting today, at which it will provide the following Trading Update covering the period from 1 May 2021 to 31 August 2021.
“The first four months of this new financial year have seen a continuation of the resilient market conditions reported with our full-year results in June. The gradual easing of lock-down restrictions has been accompanied by a gradual firming of the London market as anticipated. Outside London, the market has remained robust. As a consequence, underlying reservations at this stage in the financial year are in line with those achieved in the two years prior to the pandemic. Sales pricing has remained above business plan levels, which is offsetting building materials cost inflation referred to further below, and cancellations have been at normal rates.
Berkeley therefore remains on track to meet its profit guidance and deliver a pre-tax profit for the year at or above the £518 million reported for the year ended 30 April 2021. We anticipate profit to be weighted more to the first half of this financial year and forward sales to be around the year-end level of £1.7 billion at the half year; the final figure will depend upon the number of completions achieved between now and 31 October, as well as the level of reservations over this period.
While the sales market has been resilient, the operating environment remains challenging. As reported in the wider market, and in line with our year-end results update, we have continued to experience inflationary pressure in build costs during this period, principally through materials, and we are mindful of ongoing issues in the supply chain and labour market resulting from Brexit and the pandemic.
Berkeley started the financial year with net cash of £1.1 billion and continues to invest in its land holdings selectively and in bringing forward its portfolio of complex, long-term regeneration sites.
In addition, and subject to approval by shareholders at today’s Annual General Meeting, Berkeley will complete the previously announced proposed B-share capital return of £451 million later this month. This comprises both the return of the first half of the previously identified surplus capital (£228 million) and the remaining £223 million of the regular shareholder return for the year to 31 March 2022.
Berkeley continues to anticipate that a large part of the second half of the surplus capital return (a further £228 million) due by March 2023 will be allocated to land expenditure.
The proposed B-share capital return will be accompanied by a share consolidation, following which the regular, annual £281 million shareholder returns will represent approximately £2.50 per share, increased from an initial £2 per share in 2016.
Following the B-share payment, the next scheduled shareholder return is the £141 million in respect of the six months to 30 September 2022. Given the resilient performance since the year-end, Berkeley Group today announces its intention to make the return through either dividends or share buy-backs in the intervening period.”