- Profit below previous year
- No ‘meaningful’ recovery yet
- FY26 profit seen lower still
Despite an upbeat trading statement, in which Berkeley Group’s (BKG) chief executive Rob Perrins cited the firm’s ‘exceptional execution’ in a ‘volatile operating environment’, the market gave the results a thumbs-down.
The shares dropped as much as 412p or 9.9% to £37.38 before recovering to £38.50 for a loss of 300p or 7.5%, although that still left them down on the start of the year.
WAITING FOR A ‘MEANINGFUL’ RECOVERY
For the year to the end of April, Berkeley posted a pre-tax profit of £529 million, slightly ahead of the consensus but 5% below the previous year’s figure of £557 million.
‘There is good underlying demand for our homes, with transaction volumes gradually improving over the course of the year,’ said Perrins.
‘However, consumer confidence remains finely-balanced and a more meaningful recovery requires both improved sentiment and macroeconomic stability,’ added the chief executive.
During the year, the company added a large site in Slough town centre to its portfolio and was selected as development partner by Birmingham city council for the regeneration of a 148-acre estate with the potential to deliver over 7,500 new and refurbished homes.
With its existing pipeline of 12,000 plots and over 75% of sales secured for the current financial year, Perrins said the firm was ‘well-placed’ to hit its April 2026 pre-tax profit guidance of £450 million, which represents a further 15% decline.
EXPERT VIEW
‘Berkeley is guiding for a substantial drop in pre-tax profit for the current year and for profit to remain flat in the year afterwards, with the relatively downbeat outlook reflecting a volatile operating environment,’ observed AJ Bell investment director Russ Mould.
‘The company previously earned a reputation for shrewdly calling the housing market cycle, so the company’s conservative guidance in its latest results announcement has made investors sit up and take notice. That’s caused shares across the housebuilding sector to fall.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Ian Conway) and the editor (James Crux) own shares in AJ Bell.
