16.6% drop for Berkeley

Berkeley’s pre-tax profit fell 16.6% during its first half year it reported last week.

During the six months to October 31 2020, the housebuilder’s pre-tax profit dropped to £230.8 million from HY 2019’s £276.7 million.

With the impact of Covid-19 permeating the period, Berkeley’s home sales dropped from last year’s 1,389 to 1,104. Their average selling price was up, at £799,000 (2019: £644,000), which the business said reflected the mix of properties sold during the period.

Revenue slipped 3.8% to £895.9 million, with operating profit down 11.1% to £228 million.

Berkeley said that with production “recovering quickly”, it expected a more even distribution of profits during its financial year, having stated at the start of the period that it anticipated a pre-tax profit of around £500 million for the full year, “to be split broadly one third in the first half and two thirds in the second half”.

The value of underlying sales reservations for the half year were around 15% lower than the previous financial year. Berkeley called this a “resilient performance”, given that its half year began during the first lockdown. The business said it had benefitted from the government’s stamp duty holiday.

During the period it saw its cash due on forward sales increase to £1.94 billion (October 31) from £1.86 billion (April 30). “This is a very robust position and provides good visibility over the next three years,” it said.

Looking ahead, Berkeley said the coming months would bring “further evidence” of Covid-19’s effect on the economy, “including the impact of the second national lockdown and tapering of government support and stimuli, as well as the emergence of the UK’s new trading relationships with the European Union and rest of the world, following Brexit”.