Berkeley Group (BKG) delivered a strong performance in the year to April 2018 but cautioned that profits will be around one-third lower in the year in FY2019 as activity returns to more normal levels. Thereafter, the housebuilder is looking to achieve a 20 per cent pre-tax return on equity against 39.3 per cent in the last year. Importantly, its shareholder return programme remains unchanged.
Sales dipped to 3,536 from 3,905 units, but average selling prices rose from £675,000 to £715,000. And with forward sales of £2.2bn, Berkeley has raised its pre-tax profit guidance for the two years to April 2019 by £75m to £1.575bn.
Berkeley’s shareholder return programme established in 2011 pledged to pay £13 per share by 2021, but this was increased to £16.34 in 2015. However, since then some of the funds have been used to buy in shares when the share price was considered to be artificially low. Shareholder returns in the year totalled £287.1m, of which £146.7m came through dividends and £140.4m through the purchase of 4m shares. Of the £139.2m to be returned in the six months to 30 September 2018, £32.2m has already been returned through share buybacks and, subject to possible additional buybacks, the dividend amount will be announced on 16 August.
Analysts at Peel Hunt are forecasting pre-tax profit for the year to April 2019 of £674m and EPS of 397p.
BERKELEY GROUP (BKG) | ||||
ORD PRICE: | 3,964p | MARKET VALUE: | £5.32bn | |
TOUCH: | 3,963-3,965p | 12-MONTH HIGH: | 4,338p | LOW: 3,164p |
DIVIDEND YIELD: | see text | PE RATIO: | 7 | |
NET ASSET VALUE: | 1,952p | NET CASH: | £687m |
Year to 30 Apr | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 1.62 | 380 | 222 | 180 |
2015 | 2.12 | 540 | 313 | 180 |
2016 | 2.05 | 531 | 296 | 200 |
2017 | 2.72 | 812 | 468 | 137 |
2018 | 2.70 | 935 | 563 | see text |
% change | -1 | +15 | +20 | - |
Ex-div: | 23 Aug | |||
Payment: | 14 Sep |