Berkeley Group (BKG) delivered all the trading superlatives expected of a house builder in the middle of a boom cycle. It built 3,742 new homes in the year to April - 30 per cent more than at the peak of the market in 2007.
The London-focused builder also announced a further dividend of 90p a share, putting it firmly on course to achieve its target, announced two years ago, of paying £13 a share in dividends by 2021. This was underwritten by a 57 per cent leap in the cash due on forward sales, now £2.27bn, which is more than the projected turnover for the current year forecast by broker Numis.
Pre-tax profits jumped 40 per cent to £380m, and the pre-tax return on equity rose from 22.4 per cent to 27.5 per cent. A change in the mix of residential properties sold explains much of the increase in average selling prices from £354,000 to £423,000. This helped drive operating margins up from 20.4 per cent to 23.1 per cent, well above the peak of 20.8 per cent touched in 2007-08.
Around £353m was invested in nine new sites sufficient to build 2,500 homes. The land bank now stands at over 24,000 plots, with an estimated future gross margin of £3bn. On top of this, Berkeley has 11,000 plots in its strategic land bank (without planning consent), with a potential gross margin of £1.5bn.
Analysts at Numis have upgraded their forecasts for the current year to pre-tax profit of £510m and EPS of 294p.
| BERKELEY (BKG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,200p | MARKET VALUE: | £2.98bn | |
| TOUCH: | 2,198-2,200p | 12-MONTH HIGH: | 2,808p | LOW: 2,003p |
| DIVIDEND YIELD: | 8.2% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 1,064p | NET CASH: | £129m | |
| Year to 30 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 0.62 | 110 | 60 | nil |
| 2011 | 0.74 | 136 | 72 | nil |
| 2012 | 1.04 | 215 | 121 | nil |
| 2013 | 1.37 | 271 | 160 | 74 |
| 2014 | 1.62 | 380 | 222 | 180 |
| % change | +18 | +40 | +39 | +143 |
Ex-div:20 Aug Payment:26 Sep | ||||
