Shares in Berkeley Group (BKG) jumped as much as 11 per cent after the London-focused housebuilder grew first-half operating profit by 16 per cent to £169.6m. Shareholders were also rewarded with a hefty increase in the dividend and the group remains on target to return a total of £13 a share by 2021. What's more, with the Tower development in Vauxhall running ahead of schedule, full-year earnings should be towards the top of analysts' expectations.
Strong demand for houses and apartments in and around London pushed sales up from 1,927 to 2,294, and Berkeley replenished its land bank by spending £278m on six new sites totalling 1,754 plots. That's why the target of growing estimated gross margin in its land holdings to over £3bn has been reached 18 months early. Moreover, a further five sites have been secured on a conditional basis that will add another 5,000 plots to the land bank when planning consent is granted. Sales made using Help to Buy were relatively modest and are expected to be used in less than 5 per cent of all transactions. However, on lower priced sites, mainly outside London, the government scheme accounted for nearly a third of sales.