Profit at London developer rises 40% to £380m after firm completes 30% more homes than during pre-recession peak

Berkeley Group

Berkeley has posted a 40% jump profit to £380m after the London housebuilder completed 30% more homes last year than during the 2007 market peak.

Reporting its results today, the developer posted revenue of £1.6bn for the year to 30 April 2014, up 17% on £1.37bn the previous year.

Pre-tax profit rose 40% to £380m, up from £271m the previous year.

The firm’s operating margin increased from 20.4% to 23.1%.

The firm said it completed 3,742 homes in the year - 30% more than at the peak of the market in 2007 - at an average selling price of £423,000.

The firm said that all of its sites that have full planning consent are now in construction, adding that it invested £353m in nine new sites over the last year to enable the construction of further 2,500 homes.

Berkeley chairman Tony Pidgley said: “The last year has seen a surge of confidence within the UK economy. Housebuilders have been at the forefront of the return to growth, creating a feelgood factor, which benefits everyone.

“Their investment has underpinned the delivery of affordable homes and infrastructure for our communities. This is a result of a stable economic and political environment and strong inward investment.

“London in particular competes on a global stage and the strength of the market here is vitally important for maintaining momentum in the wider domestic market.

“Looking to the future the housebuilding industry, supported by the stimulus of the Help to Buy scheme, has the capacity to increase further the supply of new homes across the country.

“Forward sales are critical to enable the industry to commit the significant capital necessary to do this. Berkeley is building on all of its sites that have an implementable planning consent and we are employing over 11,000 people directly on our sites sustaining a further 10,000 jobs indirectly in the supply chain.

“This year we have completed some 30% more homes than at the peak of the market in 2007, and I am proud of the role Berkeley has played in generating economic growth and its wider contribution to our society through the homes and places we create.”