Berkeley Group announces further capital return in January

DividendMax Ltd.

Berkeley Group announces further capital return in January


1,000 new jobs created in the period, with 12,000 now sustained across the business

All sites with an implementable planning consent are in production, with 3 new sites started in the period in Wapping, Chiswick and Maidenhead

Announced a joint venture with National Grid on 7 November 2014. An initial 10 sites targeted to deliver over 7,000 new homes

Return to normal market conditions with good underlying demand, supporting expected full year earnings in line with current market consensus, ahead of previous guidance


Sale of a portfolio of ground rent assets for proceeds of £99.8 million and profit of £85.1 million

Net cash of £148.4 million at 31 October (April 2014: £129.2 million)

Net asset value per share up 8.8% to 1,160 pence (April 2014: 1,066 pence)


Further interim dividend of 90 pence per share (2013: 90 pence per share) payable in January 2015

Cash due over the next three years on forward sales of £2,693 million (April 2014: £2,274 million)

Land holdings comprise 24,381plots (April 2014: 24,006 plots) and future anticipated gross margin of £3,201 million (April 2014: £3,014 million)

11,000 plots with a potential gross margin of £1.5 billion in the pipeline of future land to be unlocked over the next five years

Visibility of further land from St William joint venture with National Grid

Commenting on the results, Chairman A. W. Pidgley CBE said:

"I am pleased to report a further period of strong performance which underlines the benefit of having the right strategy to operate in a cyclical market.

Since 2008, Berkeley has increased its net assets by nearly £900 million. This has enabled it to acquire 87 new sites. The Group acquires sites which are complicated, require patience and a long-term strategy, and have a risk profile which would deter most other housebuilders. This counter-cyclical approach underpins today's results and gives us the confidence to take the business forward.

The Board has declared a further interim dividend of 90 pence per share (£121.7 million), payable in January 2015, which leaves a further 90 pence per share (£121.7 million) to pay in order to meet the first milestone of returning 434 pence per share by September 2015. The Board's view is that Berkeley is on course to meet this first milestone payment. Looking beyond September 2015, Berkeley is well positioned to meet the remaining milestone payments of 433 pence per share by September 2018 and a further 433 pence per share by September 2021. Whilst we have stated our intention to meet a proportion of the next milestone through regular dividends, the timing of dividend payments against both future milestones will be subject to prevailing market conditions. If any surplus capital is generated, it will either be reinvested in the business, or used to fund further dividend payments or share buybacks.

In terms of Berkeley's wider contribution to the economy, we have created over 1,000 new jobs in the last six months, now directly sustaining some 12,000 in London and the South of England, and we are providing structured training to over 700 young adults. We have built some 10% of all new housing and 10% of all affordable housing in London over the last five years. All of this demonstrates the significant contribution that a vibrant house-building industry can provide to the UK economy.

There is clear support from the main political parties for the construction of new homes, and this needs to be coupled with continued encouragement of inward investment to fund this construction. A transparent and stable political and economic operating environment and a consistent approach to property taxation in the new parliament are crucial to limiting any uncertainty and providing the platform for growth. This week's announcement on the changes to stamp duty have been well-received by the market generally, but is a further change and we are yet to see consensus from the parties on the likely shape of policy after the General Election, which means continuing uncertainty.

Further to our announcement on 7 October 2014, I am delighted that Richard Stearn will be re-joining the Group as Finance Director. The date that his appointment will become effective is yet to be finalised, but it will be on or before 30 April 2015.

In closing, I would like to express my thanks to my colleagues in Berkeley for their dedication and hard work in delivering this strong performance. I firmly believe that Berkeley has the right plan in place to deliver long-term sustainable success, a strategy which can adapt to any changes in the market to protect the business and continue to deliver value to shareholders and the community alike."

Companies mentioned