Berkeley Group reports in-line trading, uncertainty still weighing on London market
Ahead of its annual shareholders meeting, Berkeley Group said trading conditions over the first four months of the new financial year had been in-line with management's expectations, but added that uncertainty around Brexit, stamp duty and mortgage interest deductibility continued to negatively impact the London market.
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Nonetheless, the company reiterated it was on track to deliver at least £3.0bn of pre-tax profits over the five years ending on 30 April. For the current year, profits were expected to be at least as strong as in the previous financial year.
Furthermore, sales prices achieved during the reporting period had also been ahead of the company's business plans and Berkeley was in "excellent shape", the company said in a statement.
Indeed, cash balances were seen higher at the half-point of the new financial year than when it began, underpinning visibility on earnings and financial strength.
The company also reiterated its plans to pay out a £70.4m of dividends on 15 September or 51.76p a share, with the next six-monthly return of £138.9m via dividends and share buybacks expected to be made by 31 March 2018.
"Share buy-backs will be undertaken to the extent the Board believes these are in the best interests of all shareholders and not only when the shares are materially under-valued."
Ahead of the company's AGM on Wednesday, analysts at Numis said they would be focusing on management's comments surrounding market conditions and on land and build investment, with the absence of any significant increase in the latter likely to translate into higher cash returns than previously indicated.