Berkeley Group bubbling

Operating profits grew by 40 per cent to £524m. While new home sales were down from 3,742 in the previous year to 3,355, this was more than offset by a 36 per cent increase in the average selling price to £575,000. Profits were also boosted by £85m on the sale of a portfolio of 10,000 ground rent assets, and contracts have been exchanged on an additional portfolio that will generate profits of £50m in the year to April 2016.

The business continues to throw off substantial sums of cash, with net balances up more than threefold at £431m by the year-end even after the payment of £244m in dividends. The 90p dividend declared for the second half completes the company's first milestone of 434p a share by September 2015. The group remains on track to return an additional 433p by September 2018 and the same amount again by September 2021.

Berkeley is due £3bn of cash on forward sales over the next three years, and is targeting pre-tax profits of around £2bn over the three years to April 2018. Five new sites were acquired during the year, and eight existing sites moved into production. Planning developments encouraged management to transfer some plots from its speculative pipeline into the landbank proper, which now stands at over 37,000 plots, with a gross development value of £5.3bn. The group also generated sales of £72m from commercial activities, including the sale of 130,000 square feet of office, retail and leisure space.

Operating margins slipped from 23.1 per cent to 21.7 per cent, reflecting a £47m charge taken for settling tax and national insurance liabilities arising from internal share incentive schemes.