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The Berkeley Group Holdings

The Berkeley Group Holdings plc another year of solid performance

The Berkeley Group Holdings plc (LON: BKG) today announced its audited results for the financial year ended 30 April 2019.

Berkeley is the country’s leading place-maker, operating principally in London, Birmingham and the South East. We are a proud UK business and taxpayer. We create beautiful, successful and sustainable places where communities thrive and where people of all ages and backgrounds enjoy a great quality of life.

DELIVERING FOR ALL STAKEHOLDERS

· 3,698 homes delivered – includes more than 10% of London’s new private and affordable homes

· Over £525 million of subsidies provided to deliver affordable housing and committed to wider community and infrastructure benefits in the year

· More than 11,000 people working across our sites

· Over 500 apprentices worked on Berkeley sites during the year, which also saw the launch of a second construction academy

· Maintained Industry leading Net Promoter Score and customer service ratings

· Berkeley’s pioneering approach to enhancing nature and biodiversity recognised by Government, with net biodiversity gain to become a national policy requirement

EARNINGS AND GUIDANCE *

· £775.2 million of pre-tax profit (2018: £977.0 million), at top end of market expectations, reflecting resilient trading in the year

· Current 18% out-performance against December 2016 plan to deliver £3.0 billion of pre-tax profit in the five years ending 30 April 2021, in period of extended macro and political uncertainty

· In line with existing guidance and the original plan, pre-tax profit for 2019/20 is anticipated to fall by around a third from 2018/19, with pre-tax ROE expected to settle at around 15% thereafter

FINANCIAL POSITION *

· Net cash of £975.0 million (April 2018: £687.3 million)

· Net asset value per share up 18.9% to £23.05 (April 2018: £19.38)

· Cash due on forward sales of £1.8 billion (April 2018: £2.2 billion)

· £6.2 billion of estimated future gross margin in land holdings (April 2018: £6.0 billion)

STRATEGY FOR INVESTMENT AND SHAREHOLDER RETURNS

· 14 new sites added to the land bank in the year, comprising 8,700 homes

· 9 new planning consents in the year and over 60 revisions to existing consents, with 15 sites moved into production (including Grand Union in Brent, Oval Village, Hartland Village in Fleet, King’s Road Park in Fulham and Clarendon Gasworks)

· 5.6 million shares acquired in the year for £198.9 million and dividends paid of £53.0 million

· Annual Shareholder Return extended at current amount of £280 million per annum to 2025

  • The results for the year ended 30 April 2018 have been restated following the adoption of IFRS 15, “Revenue from Contracts with Customers”. Accordingly, all references to comparable period performance throughout this press release have been restated. Details regarding the financial impact of IFRS 15 are included in note 8 of the condensed consolidated financial statements attached to this press release.

CHAIRMAN’S STATEMENT

This has been another year of solid performance for Berkeley, delivering financial results ahead of expectations while unlocking an increasingly valuable mix of social, economic and environmental benefits for the communities in which we work.

Our unique operating model, which recognises the cyclical nature of residential property development, continues to set us apart. We focus on large, complex and capital intensive regeneration opportunities in London, Birmingham and the South East of England, including a high proportion of former utility works and major industrial sites, which few other developers have the financial strength or development expertise to take on.

These long-term regeneration programmes require extensive remediation and enabling infrastructure works before they can be reconnected with the communities around them. Successfully reviving such vast and difficult sites presents a mix of technical, design and social challenges which are beyond the traditional role and scope of a developer.

Our approach is holistic, long-term and highly collaborative. We focus on the long-term strength and wellbeing of the local community and build strong local partnerships that maximise social value. This people-centred culture is what defines Berkeley’s brand and ensures we are the clear partner of choice within our sector.

Other performance highlights include completing 3,698 homes, winning 26 Considerate Constructors Scheme National Site Awards and securing an independently assessed customer satisfaction score (Net Promoter Score) of 73.5 which is on a par with highly respected consumer brands. In a further mark of consistency, every Berkeley operating company achieved an Investors in Customers Gold Award in 2018.

This was a breakthrough year for Berkeley’s pioneering approach to reversing natural habitat loss and delivering a measurable net biodiversity gain on all new sites. Over 25 developments submitted for planning have targeted a net biodiversity gain through landscape design. We have delivered our first large scale net biodiversity gain landscape strategy at Kidbrooke Village in partnership with the London Wildlife Trust. Following our pioneering work in this field, this year the Government has announced that net biodiversity gain will be mandatory for new developments through national policy.

I am also delighted to report that in May 2019, Berkeley’s company-wide approach to tackle climate change was credited with the Carbon Reduction or Offset Programme of the Year accolade at the Better Society Awards 2019. This fantastic result reflects our status as the country’s only carbon positive residential developer, something we achieved in 2018.

This was also a great year for project-level milestones and achievements. The regeneration of Woodberry Down in Hackney celebrated its 10th anniversary, as did Kidbrooke Village in Greenwich. At Southall Waterside, we have now welcomed the first local Ealing residents to this 88 acre former gasworks and seen more than 50 Londoners enrol in the site’s state-of-the-art Construction Academy, delivered in partnership with West London College.

During the year, Berkeley made shareholder returns of £251.9 million, of which £198.9 million was represented by share buy-backs and £53.0 million by dividends. This included the £139.7 million scheduled return for the six months ended 31 March 2019. Of the £139.7 million return announced to be made by 30 September 2019, £5.2 million has been made to date through share buy-backs. The amount that will be returned as a dividend will be announced on 15 August 2019 and paid on 13 September 2019 to shareholders on the register on 23 August 2019, taking account of any further share buy-backs in the intervening period.

I am extremely proud of these results, and the unique operating model which underpins them. Most of all, I am grateful and indebted to our superb staff and fantastic partners. The passion and care they bring to their work are what give the places we create their life, pride and enduring value.

Tony Pidgley CBE

Chairman