This was a tale of two halves for London-focused housebuilder Berkeley Group (BKG). While forward sales for the year as a whole rose from £2.95bn to £3.25bn, reservations in the first five months of 2016 were down by a fifth. Increased transaction taxes and a policy shift against buy-to-let investors generated additional headwinds, and so far in 2016 there have been no new London launches.
That's all the bad news, which is hardly news, given that most markets have stalled ahead of the EU referendum. Berkeley has adopted the view that whatever the outcome, life will go on. London still faces a chronic housing shortage, with supply outstripping demand by a factor of 13 to one. To address this problem Berkeley has launched a new concept called the Urban House. Twice as many homes will be built on the same size plot as a terraced home by using three stories and replacing the back garden with a private roof garden.
Last year, Berkeley announced that the dividend programme put in place in 2011 to deliver 1,300p per share by the 2021 financial year would be increased to 1,634p, with the first 100p half-year payment already made in January, and the next scheduled for September.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit for the year to April 2017 of £757m (from £480m in FY2016), giving EPS of 394.1p.
| BERKELEY GROUP (BKG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,960p | MARKET VALUE: | £4.09bn | |
| TOUCH: | 2,959-2,961p | 12-MONTH HIGH: | 3,788p | LOW: 2,823p |
| DIVIDEND YIELD: | 6.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 1,311p | NET CASH: | £107m | |
| Year to 30 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.04 | 215 | 121 | nil |
| 2013 | 1.37 | 271 | 160 | 74 |
| 2014 | 1.62 | 380 | 222 | 180 |
| 2015 | 2.12 | 540 | 313 | 180 |
| 2016 | 2.05 | 531 | 296 | 200 |
| % change | -3 | -2 | -5 | +11 |
Ex-div: 11 Aug Payment: 15 Sep | ||||
