Berkeley Group Holdings PLC on Friday said it has seen a continued modest improvement in sales reservations for new homes as it reiterated profit guidance for the next two years.

In a trading update, the Cobham, England-based housebuilder said it expects to deliver pretax profit of at least £525 million in financial 2025 and £450 million in financial 2026. This will be down from £557.3 million in the financial year that ended April 30 last year, which itself was down by 7.7% from financial 2023.

In addition, Berkeley reiterated a commitment to return £283 million, 262 pence per share, per annum to September 2025, through a combination of buybacks and dividends.

Net cash is anticipated to be around £300 million at April 30, down from £474 million at October 31. The actual out-turn will be determined by the pace of further share buy-backs, any new land investment and the phasing of legal completions around the year-end, Berkeley said.

In response, shares in Berkeley rose 1.9% to 3,628.00p each in London on Friday morning. The wider FTSE 100 index was up just 0.3%.

Berkeley said enquiries are at a consistently good level, and it has seen the modest improvement in sales reservations noted at the time of the interim results continue.

Sales rates are ahead of those achieved last year, the company added.

But the housebuilder cautioned that for this improvement to continue and sales rates to return closer to the levels of three years ago, there needs to be greater confidence in the trajectory of interest rate reductions and wider economic stability.

Berkely said it is ‘hugely encouraged’ by the change in mind-set over planning, brought about by the new UK government’s planning reforms and housing delivery ambitions.

It said it has made good progress, securing important amendments on 10 of its long-term regeneration sites.

‘We are now working with our local authority partners to finalise the Section 106 agreements and clear conditions on a number of these so they can be implemented. We are also actively appraising a number of opportunities in the land market,’ it added.

But Berkeley voiced concerns over the extent and pace of regulatory changes of recent years. It said this, and the new Building Safety Levy, could place significant pressure on the delivery of new homes. The levy is due to be put in place in response to the fatal Grenfell Tower fire in London in 2017.

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