# Berkeley Group sees a continuation of the resilient market conditions

- Link: https://www.directorstalkinterviews.com/berkeley-group-sees-a-continuation-of-the-resilient-market-conditions/4121020650
- Published: 2021-09-03T07:26:11+01:00
- Author: Amilia Stone

**[Berkeley Group Holdings plc](https://www.directorstalkinterviews.com/ftse-company/berkeley-group-holdings/bkg.l)**(
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.”

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