Berkeley sales drop 25% in year of two halves

Berkeley Group has posted strong results for the year ended 30 April 2008 but remains guarded about the sector’s outlook.

Pre-tax profit was up 3% from £188.1m to £194.3m while turnover rose by 8% from £918.4m to £991.5m.

The forward order book stands at £1.2bn, which is 29% ahead of last year.

Chief executive Tony Pidgley called the figures an “excellent set of results” but described the 12 months as “a year of two halves”.

After what Pidgley described as a “dramatic change” in November with the onset of the credit crunch, sales fell 25% below historic levels.

Ahead of the results, one analyst said Pidgley’s outlook statement would be more important than the figures themselves.

While he called the market “challenging” and “uncertain” there was no detail on trading prospects.

Despite the uncertainty, the City reacted positively to the results and Berkeley’s net debt level of £4.5m.

Kaupthing analyst Kevin Cammack said: “Berkeley has always been as much an investment in management as the market it operates in and to this end Pidgley et al are making their mark.”

He also hailed the group’s plan to defer a return of 300p to shareholders to plough the cash into opportunistic land buying at a time when rivals were less able to spend.

He said: “If approved - it should be - it once again demonstrates Berkeley's innovation and ability to play the cycles with superior strength and guile.”