Berkeley group 2013/14 final results

DividendMax Ltd.

Berkeley group 2013/14 final results


3,742 new homes completed in the year, some 30% more than at the peak of the market in 2007

Consistent delivery of around 10% of all new homes built in London over the last five years

£353 million invested in nine new sites in the year, sufficient to build a further 2,500 new homes

All of Berkeley's sites which benefit from an implementable planning consent are in construction


Basic earnings per share increased by 38.6% to 221.8 pence (2013: 160.0 pence)

Pre-tax return on equity of 27.5% (2013: 22.4%)

Net cash of £129.2 million (April 2013: net cash of £44.7 million)

Net asset value per share up 5.6% to 1,065.6 pence (April 2013: 1,009.1 pence)

Dividends of 149 pence per share (£195.2 million) paid to shareholders in the year


Further interim dividend of 90 pence per share declared, payable in September 2014

Cash due on forward sales of £2,274 million (April 2013: £1,453 million)

24,006 plots (April 2013: 25,684) and future anticipated gross margin of £3,014 million (April 2013: £2,852 million) in land holdings

Pipeline of future land comprises 11,000 plots and potential gross margin of £1,500 million to be unlocked over the next five years

Commenting on the results, Chairman Tony Pidgley said:

"These are strong results which reflect the current market conditions and Berkeley's bold strategy to invest at the right point in the economic and housing cycle. Basic earnings per share have grown by 38.6% to 221.8 pence, of which 149 pence has been paid to shareholders as dividends in the year, and the estimated value of gross margin in our land holdings is now in excess of £3 billion.

The Board has declared a further interim dividend of 90 pence per share (£121.7 million), payable on 26 September 2014 to shareholders on the register on 22 August 2014. This means that 254 pence per share has been paid or committed to date, and leaves a further 180 pence per share in order to meet the first milestone of paying 434 pence per share by September 2015. The Board considers that the Group is currently on track to achieve this target and is well positioned to meet the remaining milestones by September 2021.

The last year has seen a surge of confidence within the UK economy. Housebuilders have been at the forefront of the return to growth, creating a feelgood factor which benefits everyone. Their investment has underpinned the delivery of affordable homes and infrastructure for our communities. This is a result of a stable economic and political environment and strong inward investment. London in particular competes on a global stage and the strength of the market here is vitally important for maintaining momentum in the wider domestic market.

Looking to the future the housebuilding industry, supported by the stimulus of the Help to Buy scheme, has the capacity to increase further the supply of new homes across the country. Forward sales are critical to enable the industry to commit the significant capital necessary to do this.  Berkeley is building on all of its sites that have an implementable planning consent and we are employing over 11,000 people directly on our sites sustaining a further 10,000 jobs indirectly in the supply chain. This year we have completed some 30% more homes than at the peak of the market in 2007, and I am proud of the role Berkeley has played in generating economic growth and its wider contribution to our society through the homes and places we create.

Berkeley's achievements are testament to the skill and dedication of our employees, and to the commitment of our partners on our schemes and in the supply chain, and I would like to express my thanks to all of them. I am delighted that the Group has been recently awarded the Queen's Award for Enterprise for Sustainable Development 2014. This award recognises Berkeley's approach to running its business for the long-term, to help ensure a better quality of life for everyone, now and for generations to come.

The Board is confident that Berkeley has the right plan to deliver long-term sustainable success, but remains alert to the inherently cyclical nature of the property market and the uncertainty surrounding future tax policy and political decision-making. Monetary policy and the financial stability of banks, which is currently a concern of regulators, are both factors influencing the housing market in the long-term. Provided any future increases in interest rates or regulation of mortgages are matched with future wages growth as the economy expands, the prospects for the housing market remain positive."

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