Housebuilder’s results exceed expectations as board predicts outperformance for year overall

Housebuilder Berkeley released its half-year results today, showing pre-tax profit up 18.5% to £61.6m, compared with £52.0m for the same period in 2009.

Announcing the figures for the six months ended 31 October 2010, the board said it was confident that Berkeley could “outperform management’s original expectations for the current year” and was “well placed for the following year”.

The operating margin of 17.4% was at a similar level to the first half of 2009, with net finance income of £1.8m (down from £3.0m a year earlier) and joint ventures contributing £1.2m of profit (against a £1.6m loss a year earlier.)

Net cash fell during the six-month period, however, to £252.7m from £316.9m at April 2010.

Earnings per share rose by 19.2% compared with the same period in 2009, to 33.5p.

Analyst Kevin Cammack of Cenkos said that the interim results were better than expected and that the group looked “better positioned than any housebuilder to withstand current conditions”.

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.

“As a consequence, cash due on forward sales has increased by 21.9% over the period, providing forward visibility in a period which has seen Berkeley increase the number of sites from which it is selling.”

Since the start of the year, Berkeley has acquired some 2,500 plots, including prime London sites in Westminster and on Hammersmith Embankment, both completing in the second half, and a site for 1,000 new homes in Horsham.


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