Berkeley ups the dividend

Trading in the six months to October 2015 remained strong, with no sign of any let-up in demand. This helped to increase cash due on forward sales by nearly 5 per cent to £3.1bn. And cancellation rates of 10 per cent remained well below normal historic levels of 15-20 per cent. Sales rose from 1,372 in the six months of the previous year to 2,091. While average selling prices dipped from £649,000 to £506,000, this reflected a change in the product mix from the previous year, which included completions at Ebury Square, with its average selling price of £6.4m.

Headline profits were lower as revenue from the sale of the last of its ground rent assets was down from £99.8m to £53.4m. Overheads were also £26.6m higher, relating to costs associated with the group’s share option scheme. However, gross profits were up nearly 5 per cent at £391m, and Berkeley is sticking with its target to deliver pre-tax profits of around £2bn over the three-year period to April 2018. Berkeley added six new sites to its land bank, including the 2.6 acre West End Green site in Paddington.

Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to April 2016 of £466m and EPS of 253p, from £455m and 233p in FY2015.