Berkeley Group (BKG) coped rather well with the headwinds that affected trading in the year to April 2017. Reservations fell sharply in the wake of the EU referendum, but sentiment has improved somewhat since then. And the 30 per cent drop in overall housing starts in London only served to exacerbate the chronic imbalance between the supply of new homes and demand.
Even so, forward reservations worth £3.25bn at the start of the financial year were down to £2.74bn by the end, but Berkeley remains on target to deliver at least £3bn in pre-tax profits over the five years ending in 2021. At the April 2017 year-end, the group was employing more than 13,000 people working on 58 live construction sites, with more than 1,600 people in formal training. This is an important consideration because skill shortages (and sterling's weakness) pushed up build costs by 6 per cent. This was more than offset by a change in the product mix that boosted average selling prices by 31 per cent to £675,000, while completions actually rose from 3,776 to 3,905. This helped to lift operating margins from 24.5 per cent to 27.8 per cent.