Berkeley raises profit expectations

The Berkeley Group Holdings Plc is set to achieve its profit targets at least two years earlier than originally anticipated, according to its board.

Chairman Tony Pidgley will use today’s annual general meeting to confirm that the company’s 2010 target to effectively double profits over five years is ahead of schedule after trading ahead of expectations since results in June.    

Conditions in the four months ended 31 August 2011 have enabled further growth in forward sales, which are currently in excess of £850m, up from £814m in May 2011.   

In a statement to the city today it said: “Since the original plan was announced in May 2010, trading has been ahead of management expectations and Berkeley has achieved a significant number of planning consents and invested in work in progress in line with its strategy.  Together with the performance in the period since 1 May 2011, the board believes that it is now positioned to achieve the profit target set in the five year plan at least two years earlier than originally anticipated, to the extent that market conditions prevail.”

Berkeley has continued to add to its land bank, acquiring seven new sites since the end of April, and continues to focus on its existing assets, achieving improved consents on a number of sites. Its declared target in this area is to grow the future gross margin in the land bank from £2bn to £3bn over five years from 2010.

Announcing its full year results in June, the board declared its intention to return £13 per share - amounting to £1.7bn in total - over the next decade in a series of dividends payable on milestone dates in September 2015, 2018 and 2021 respectively.