Berkeley defies cooling market with £62m profit

Aaron Morby 12 years ago
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London and South East house builder Berkeley Group has shrugged off the cooling housing market to deliver an 18.5% rise in pre-tax profits to £61.6m in the first half of the year.

Chairman, Tony Pidgley said: “This strong set of results represents an excellent performance from Berkeley at a time when the economy is looking to find traction for what is proving an elusive sustained recovery.”

The improvement was driven principally by an increase in revenue of 15.9% from £290.1m to £336.2m and leaves Berkeley boasting industry beating margins of 17.4%.

Managing Director, Rob Perrins, said: ‘Today’s results, which show an increase in both earnings and sales reservations approaching 20%, demonstrate the underlying resilience of the housing market in London and the South East over the last six months.

He said that since the start of the year Berkeley has acquired 13 new sites with 2,500 plots, including prime London sites in Westminster and on Hammersmith Embankment.

“Overall, this strong performance provides the board with confidence that Berkeley can outperform management’s original expectations for the current year and is well placed for the following year.”

Looking forward, Berkeley warned that the Government needed to tackle mortgage, building regulation and planning issues if the under-supply of new homes in London and the South East is to be addressed.

Perrins said: “Irresponsible lending must be prevented but there should be sufficient flexibility to allow hard-working people to acquire their own home, while providing a support mechanism for those who do fall into difficulty.

He also warned that changes to the building regulations in the pursuit of zero-carbon must not lose sight of the goal of providing well designed, comfortable and affordable homes.

“Achieving planning consents in the current market which are commercially viable is an industry wide challenge,” warned Perrins.

“While fully supporting local decision making, the lack of a common framework is creating uncertainty and delay which adds to the risk and cost of development and this unfortunately means that a number of new schemes cannot be brought forward.”

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