The bumper profit increase from £812.4 million to £934.9 million was served up alongside a warning that profitability had peaked and would be heading lower by 30% from the current financial year.
Markets focused on the profit warning rather than the profit performance and the Berkeley Group share price was 1.95% lower in early trading today, down 76p at £38.17.
Bargain sites boost starting to fade
Earnings per share rose 94.9p, or 20.3%, from 467.8p to 562.7p, but total dividends paid fell by £107.9 million from £254.6 million to £146.7 million. There was an increase in share buy-backs to bolster investor returns, a £96 million rise from £44.4 million in the previous financial year to £140.4 million.
But this was insufficient to prevent an 11.9% decline in total shareholder returns from £299 million to £287.1 million.
During the year, Berkeley delivered 3,536 homes, including more than 10% of new private and affordable homes in London, it provided subsidies of £420 million for affordable housing “and wider community and infrastructure benefits”.
Tony Pidgley, chairman, said Berkeley’s business model “is focused on developing complex sites, which others are not willing or able to take on, creating fantastic, sustainable places with homes built to a high quality in which our customers want to live, and enriching the wider community by bringing homes, jobs and amenities for all”.
London property warning
He said housing supply had risen across England during the past 12 months, with a 16% increase in completed homes during the year and a 5% rise in the number of housing “starts”. This, said Mr Pidgley, “reflects positive decisions and fresh investment by Government and the private sector”.
But he sounded a warning about the position in London, the most expensive and crowded part of the UK’s property market, where housing starts were 30% lower than two years ago.
Mr Pidgley added: “This is a great shame as London is a fantastic world-class city with unique attributes that will last long beyond the current hiatus, which is only exacerbating the well-documented under-supply .”