Berkeley Group says its full-year pre-tax profit is expected to match guidance

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Mar 12, 2021
  • Berkeley Group says its full-year pre-tax profit is expected to match guidance.
  • The housebuilder expects over £1.7 billion of forward sales by the end of 2021.
  • Berkeley Group is committed to return £280 million a year to shareholders.

Berkeley Group Holdings plc (LON: BKG) said on Friday that its financial performance continues to show resilience. The company forecasts pre-tax profit in fiscal 2021 to come in line with guidance.

Berkeley shares slid roughly 3% in premarket trading on Friday and lost another 2.5% on market open. Including the price action, the stock is now exchanging hands at £43 per share. In comparison, it had started the year 2021 at a much higher £47 per share.

Berkeley expects over £1.7 billion of forward sales

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Berkeley expressed confidence in the underlying demand on Friday that, as per the housebuilder, will help report a similar pre-tax profit in the year to conclude on 30th April as it did in the previous year.

FactSet Consensus for Berkeley’s pre-tax profit in fiscal 2021 currently stands at £534.5 million. In the previous year, the British firm had noted £503.7 million of pre-tax profit. Berkeley also said on Friday that its forward sales by the end of the ongoing financial year are likely to be valued at over £1.7 billion.

The British property developer predicts £954 million of net cash by the end of fiscal 2021. Reservation value, it added, is likely to remain 20% lower on a year over year basis due to the COVID-19 restrictions. The health emergency has so far infected more than 4.2 million people in the United Kingdom and caused over 125 thousand deaths.

In separate news from the UK, AstraZeneca further slashed its COVID-19 vaccine supply target to the European Union on Friday.

Berkeley wants to return £280 million a year to shareholders

According to Berkeley, it is well-positioned to hit the milestone of 15% pre-tax return on equity – a long-term target that it set earlier. The Cobham-based company is confident that it will report a similar profit in the next fiscal year as well.

Berkeley Group Holdings plc is committed to returning £280 million via dividends and buybacks to its shareholders per year. In its earlier report published in the first week of December, the housebuilding company had posted a 17% decline in its pre-tax profit in the fiscal first half.

Berkeley Group performed slightly downbeat in the stock market last year with an annual decline of more than 3%. At the time of writing, the British property developer and housebuilding company is valued at £5.27 billion and has a price to earnings ratio of 15.42.

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