Berkeley hails post Covid resurgence

Berkeley Group posted a profit before tax for the year to 30th April 2022 up 6% at £551.5m (2021: £518.1m).

Revenue for the year was up 7% at £2,348.0 (2021: £2,202.2). This was from the sale of 3,760 homes across London and the southeast  (2021: 2,825) at an average selling price of £603,000 (2021: £770,000).

These are not quite the dizzying numbers of 2018/19 when it made £775m before tax on nearby £3bn turnover, but times have changed.

The value of underlying reservations was up 25% on last year and slightly ahead of pre-pandemic levels, with cost inflation absorbed by sales prices. Cash due on forward sales stood at £2.2bn at year-end (2021: £1.7bn).

Such is the shape of the business, its landholdings and work in hand that it anticipates delivering pre-tax profits of £600m for the current financial year, an increase of 10%, and £625m in each of the following two years.

Berkeley has 26 regeneration developments in production. Four major new planning consents were obtained on long-term developments during the year: Milton Keynes and St William’s Bow Common (1,000 homes), Leyton (570 homes) and Bethnal Green (550 homes).

The group has added four new sites to its land holdings during the year, including a shopping centre in Peckham, where it is targeting the delivery of more than 900 new homes, and the Ram Brewery site in Wandsworth.

In March, Berkeley acquired the outstanding 50% partnership interest in its joint venture St William Homes from National Grid for £412.5m.  St William is now a wholly owned subsidiary of Berkeley Group.

Chief executive Rob Perrins said: “These strong results reflect the stability of our uniquely long-term operating model throughout an exceptionally volatile period. They are underpinned by our portfolio of major brownfield regeneration projects, where patient and sustained investment is transforming disused land into distinct and highly sustainable mixed-use neighbourhoods within the UK’s most undersupplied markets.

“We are incredibly proud of the places we create, which are individually designed in close collaboration with local councils and communities to provide the right mix of homes, amenities, natural landscapes, cultural attractions and commercial spaces.  Examples include Grand Union, where we completed the first 128 homes this year, 92 of which are affordable rented homes delivered in partnership with Brent Borough Council, alongside a beautiful canal-side public square and 5,000 square foot Community Centre; and the hugely exciting Horlicks Quarter where, in partnership with Slough Borough Council, we have delivered the first 35 homes and the heritage restoration of the iconic factory, clock tower and chimney is well underway.

“As the largest contributor to new homes in London, our conviction in the long-term resilience and attraction of the capital has been rewarded by the city’s resurgence post Covid-19, with our passion for creating distinctive and well-rounded neighbourhoods providing a clear advantage as customers increasingly prioritise the quality and character of the local setting post pandemic. The £556m of subsidies provided to deliver affordable housing and committed to wider community and infrastructure benefits exceeds our profit for the year, and is a clear indicator of the social value and benefits that stem from our unique portfolio of long-term regeneration sites.”

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