Berkeley builds solid £101m profit

The winner of MT's 2011 BMAC awards has reported a 64% jump in pre-tax profits. We told you it was good...

by Emma Haslett
Last Updated: 30 Nov 2012
Proof, if it were needed, that MT is always right. Berkeley Group, the housebuilder that took first place in our Britain’s Most Admired Companies list on Wednesday, has reported an impressive 64% rise in first half pre-tax profits, to £101.1m. The company reckons that’s largely down to the £30.7m it’s just made with the sale of a student residence project – but considering the sector as a whole hasn’t necessarily had the easiest few months, that’s still a fine effort.

Revenues for the six months to the end of October rose to £405m, up from £336m during the same period last year – that’s a rise of just over 20%. It added that it had another 14 housing schemes in the pipeline, which would add 2,000 plots to its books, including 993 new homes in Fulham, West London – the location of choice for those who can’t quite stretch to a pad in Chelsea. That will presumably cash in nicely on a new scheme announced by the Government last month to underwrite mortgages for first-time buyers. Excellent timing…

But given that the construction sector in general (and the residential sector in particular), has been badly hit by the low number of properties being sold at the moment, what else has Berkeley done right? Tony Pidgley, the group’s chairman (lots more on him in our BMAC feature) reckons it’s to do with the company’s focus on London and the South East, where prices are much stronger than elsewhere in the country.

So confident is it, in fact, that in the summer, the company (of which Pidgley is a big shareholder) announced a £1.7bn dividend plan to take place over the next 10 years. But he added that the Government could do more to address red tape in the planning system, which he said is holding the sector back. ‘Without addressing this issue, I fear planning on a large scale will become the sole preserve of the strongest and most financially secure developers which will be detrimental to the desire to increase supply and competition to stimulate economic growth,’ he said.

See? We told you he was good. Just call us Mystic Mag…

- Find out more at the BMAC microsite

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