Green 25 DMA
Red 50 DMA

Berkeley Group: A residential housebuilder with a high percentage of its developments on brown field land. Established in 1976, the company now includes the Berkeley Homes, St George and St James brands, with important exposure to the high value London property market.
Shares in issue 131.28m (Oct '10)
Currently no dividend (Oct '10)
Forecast PE apr '11 13.2, to apr '12 11.6.

Final Results

OPERATIONAL HIGHLIGHTS

· 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

PERFORMANCE

· 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

OUTLOOK

· 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

Ex-divi wed 20th Aug 2014 (90p)

Interim Management Statement


"The last five years have seen a period of sustained investment in land and construction for Berkeley. This has enabled the Group to deliver some 15,750 new homes in London and the South East of England over the period and support over 21,000 jobs directly and in the supply chain in the last year alone. A strong market in the last financial year, in which cash due on forward sales rose to over £2.2 billion, left Berkeley well positioned at the start of this year to maintain its investment and contribution to the UK's economic recovery.

Since the start of the current financial year, the market has reverted to normal transaction levels from the high point in 2013, providing a stable operating environment. Demand for the right product with good design in the best locations has remained resilient and, reflecting this, forward sales have been maintained at the levels previously reported.

In respect of our land holdings, the Board has targeted further growth in the value of potential gross margin over the course of the current year, driven particularly by unlocking planning and gaining access to the land currently held in the pipeline, which comprised over 11,000 plots and had an attributable potential gross margin of some £1.5 billion at the last year end. Good progress has been made in the period to unlock a number of these sites, and we will provide an update on this at the half year. New planning consents at London Dock in Wapping and a site in Chiswick in the period have further enhanced the quality of the land bank held unconditionally and the acquisition of two new sites in the period on a conditional basis into the pipeline provides further visibility on the availability of land in the future.

The disposal of a portfolio of the Group's ground rent assets for £99.8 million, which completed on 17th June 2014, has contributed to a strong operating cash inflow over the period. The Group currently expects to remain ungeared following the dividend payment of 90 pence per share (£121.7 million) on 26 September 2014.

A further 180 pence per share is payable as dividends in order to meet the first milestone of paying 434 pence per share by September 2015. The Board has previously indicated that it will aim to make regular dividend distributions where conditions permit and is on track to meet this commitment. Looking to the next milestone of 433 pence per share in September 2018, the Board intends to meet a proportion of this through regular dividend payments, where market conditions permit.

With a strong balance sheet and land bank Berkeley is well positioned to continue to invest in the business and deliver returns to shareholders. Earnings this year are anticipated to be in line with current market expectations."

END

.

National Grid and Berkeley Group launch new property Joint Venture
National Grid plc ("National Grid") and The Berkeley Group Holdings plc ("Berkeley") have today launched a new joint venture, to be named St William Homes LLP ("St William"). This will create major residential and mixed-use developments across London and the South East.

National Grid (through National Grid Property Holdings Limited) has a significant portfolio of surplus brownfield land which it is committed to releasing for development. The launch of St William is intended to bring together land from National Grid's portfolio, initially from across the Greater London area, and combine this with Berkeley's development expertise.

The acquisition of sites by the joint venture will be conditional upon their unencumbered release for development and the receipt of necessary planning permissions. None of the sites is expected to be income generating when acquired by the joint venture. St William aims to commence development activity on its first site in 2016, with the first homes being delivered in 2017.

National Grid and Berkeley will become shareholders of St William, each owning 50% of the equity through SPVs. Funding will be through a combination of shareholder equity and bank funding at an equity to debt ratio of 50:50. The equity investment for each shareholder will be initially capped at £175 million. When combined with bank debt, this will result in the joint venture vehicle having available funding of up to £700 million. These funds will be drawn down to match the working capital requirements of the joint venture as they fall due. Sufficient working capital will be retained in the business to fund ongoing activity, with surplus funds returned to National Grid and Berkeley as agreed between them.

Rob Perrins, Managing Director of Berkeley, said:
"This is good news for house-building. St William will take these redundant sites and turn them into new communities. I am delighted to be working with a partner like National Grid which shares our values and has such a strong pipeline of land and assets."

Excellent news.

I wonder if Boris had anyone to do with pushing this one along?

First off, he would know that NG owned the brownfield land. Next he merely needs to shove NG towards a big developer with encouraging noises concerning the granting of planning permission. Berkely definitely fit that bill. Easy peasy, lemon squeasy.

But surely these big firms are well capable of doing all of this by themselves?

But Boris has also been harping on about this kind of thing for ages now.

Interim Management Statement

Period from 1 November 2014 to 28 February 2015

20 March 2015

The Berkeley Group Holdings plc ("Berkeley" or "the Group") today announces its Interim Management Statement which covers the period from 1 November 2014 to 28 February 2015.

The delivery of new housing is central to many debates in advance of the General Election, and there is an acknowledgement across the board that there is an undersupply of new housing. Berkeley is in construction on 64 sites across London and the South of England, employing some 12,000 people on these sites every day. All of our sites that have an implementable planning consent are in construction. We continue to build some 10% of London's affordable housing and are focused on creating great places where our customers can enjoy a good quality of life now and in the future.

Policies adopted by the Government in power after the Election need to continue to encourage the investment necessary to fund the delivery of new homes and places, and a stable operating environment in terms of regulation, taxation and planning is crucial to this.

With the return to normal trading conditions over the course of this financial year from a high point in 2013, we continue to see good demand for new homes in London and the South of England. The strength of Berkeley's balance sheet continues to be supported by cash due over the next three years on forward sales which remains at the level reported at the half year. The Group is currently ungeared, with some £400 million of net cash following the payment of £122 million of dividends in January 2015.

Under the Group's long-term scheme to return £13 per share to shareholders by 2021, a further 90 pence per share is payable in order to meet the first milestone under this scheme of paying £4.34 per share by September 2015. Berkeley reiterates its current intention to meet a proportion of the next milestone of £4.33 per share by September 2018 through regular dividends, with the quantum and timing of such dividends being subject to prevailing market conditions, and to use any surplus capital generated to reinvest in the business or fund further dividend payments or share buybacks if appropriate.

Berkeley has continued to make good progress on its land holdings in the period. One new site in Reading has been acquired unconditionally by St Edward and a detailed planning consent has been secured on two pipeline sites at Hornsey and Kingston which are now unconditional and have been delivered into the land holdings. We have secured a further 7 new consents on our existing land holdings, all of which enhance our capacity to deliver more homes in the future. Following the announcement on 7 November 2014 of the launch of St William, a new joint venture with National Grid, we continue to work on unlocking the first ten sites.

With the progress made so far this year, the Board reiterates its previous guidance on full year earnings for the next three years to 30 April 2015, 2016 and 2017.

In terms of Board appointments, and further to previous announcements, Berkeley is now pleased to confirm that Richard Stearn will re-join the Group as Finance Director on 13 April 2015.

END

ExecLine ( November Posting )
Sure Co will eventually make use of their assets, but often as not the Execs are looking at a self-serving time-frame and manageing their Bonus/Pension,etc. Rarely will they look at the whole-company and say "what else" -
Boris, on the other hand, is excited by Good News, and this needs to fit his schedule - he can shout about Deals done some months ago, unless he was there cutting the ribbon ( as it were).
I think Boris needed good news - and someone mentioned NG - the rest is History.
( I wonder how many advisors benefited from this deal "prior" - that would be interesting...)

Jefferies International lifts Berkeley Group Holdings to hold from underperform, target raised from 1839p to 2681p

RBC note on friday:
"Help to Buy – The scheme was introduced in 2013 and successfully reignited the housing market. Although all political parties were said to be in favour of getting more FTBs onto the housing ladder, there was some uncertainty as funding is in place for 2015 but not beyond making it easy to scrap or introduce a different scheme. H2B makes up between 40-50 percent of sales at Barratt Development, Persimmon and Taylor Wimpey.
National Planning Policy Framework was introduced in 2012, with an emphasis on releasing both public and private land for development. We believe that planning approvals have picked up as a consequence. The local planning authorities are obliged to demonstrate a five-year supply of deliverable sites for housing with an additional 5% buffer to increase choice and competition. Planning typically slows down during an election period. The removal of the electoral uncertainty and any potential reforms around planning should be viewed positively.
Labour’s Mansion Tax – In our opinion, Berkeley Group was most at risk to an introduction of a mansion tax and any schemes to deter foreign buyers. Berkeley Group sells approximately 30% of its homes to foreign buyers, and the sales of homes over £2m represent 15% of its revenues. This compares to Barratt Development (with the second-largest exposure to London) with a 1% exposure to completions within the mansion tax bracket.
The outcome of the election is positive for the Housebuilders. The Housebuilders have underperformed going into the election. We believe that the removal of any major political uncertainty should lead to a catch-up. We believe that Berkeley Group, which has underperformed the Housebuilding sector is the largest beneficiary of the electoral outcome. The sector is trading on EV/IC/ROCE/WACC of 1.1x 2015E and 0.9x 2016E and yielding 6% on average."

StockMarketWire.com
Home-builder Berkeley Group posts pre-tax profits of £539.7m for the year ended 30 April - up from £380.0m last time.

Chairman Tony Pidgley said the result underlined the benefit of operating the right strategy consistently through the cycle.

Revenue rose to £2,120.0m (2014: £1,620.6m) included £2,020.2m of revenue from operations (2014: £1,620.6m) and £99.8m from the sale of a portfolio of ground rent assets (2014: £nil). The £2,020.2 million of revenue from operations included £1,936.2 million of residential revenue (2014: £1,605.0 million), £12.3 million from land sales on 3 sites (2014: £nil) and £71.7 million of commercial revenue (2014: £15.6 million). 3,355 new homes (2014: 3,742) were sold across London and the South of England at an average selling price of £575,000 (2014: £423,000). The increase in average selling price reflects first completions at Ebury Square, Riverlight, Fulham Reach and One Tower Bridge, all London schemes acquired in 2009/10.

The year ended 30 April 2014 included the disposal of 534 properties from Berkeley's rental fund to M&G Investments at an average selling price of £197,000 and the sale of two student developments. Revenue of £71.7 million from commercial activities (2014: £15.6 million) included the sale of some 130,000 sqft of office, retail and leisure space across a number of the Group's developments including Fulham Reach in Hammersmith, Langham Square in Putney and Royal Worcester as well as a 90,000 sqft hotel at Goodmans Fields in Central London. The £15.6 million of revenue last year was mainly from the sale of retail space on developments including Marine Wharf in Deptford, Goodmans Fields in Aldgate, Fulham Reach in Hammersmith and Imperial Wharf in Fulham. During the year, the group sold a portfolio of approximately 10,000 ground rent leases across some 60 sites for proceeds of £99.8 million and a gross profit of £85.1 million. Income and expenses associated with this sale have been recognised in the income statement through revenue and gross profit. The adjusted gross margin percentage, excluding profit from the sale of ground rent assets, has been broadly stable at 31.3% (2014: 31.4%), and reflects the mix of homes sold in the period.

Overheads of £192.7 million (2014: £134.1 million) included a charge of £47.0 million (2014: £nil) in respect of the Company's decision to settle the tax and national insurance liabilities arising on the vesting of options for participants in Part B of the 2009 LTIP scheme on 15 April 2015, in lieu of issuing shares to this value, and the intention to do the same in respect of options vesting on 15 April 2016.

Of this £47.0 million, £33.5 million is in respect of prior periods and £13.5 million in respect of the year ended 30 April 2015.

Pidgley said: "By maintaining our financial discipline Berkeley can apply its unique operating model to develop sites which are complex and where others may perceive that the risk is too great, and in doing so, we unlock land for new homes that would not otherwise come forward.

"Berkeley accepts this additional operational risk which is managed carefully and intensively to create sustainable added value returns.

"Berkeley is delivering some 10% of all new homes in London and 10% of the capital's affordable homes across our 74 sites. This creates economic value of £1.4 billion and sustains some 12,000 jobs. In addition, we remain committed to increase site-based apprenticeships and training to help address the skills shortage which our industry faces.

"We are acutely aware of the importance to our society of all forms of tenure for new housing and welcome the vision of Government, the Greater London Authority and local councils to increase the number of new homes built. For Berkeley it is equally important to ensure that we are market leaders in terms of the quality of the places and homes we create.

"We welcome the stability in Central Government following the General Election and the commitment to increase housing supply, but political uncertainty remains with the London Mayoral Election and referendum on Britain's relationship with Europe on the horizon. Berkeley is a supporter of the UK remaining in Europe as this is the best way for London to remain a world city. There is no doubt, however, that for business to thrive, we must not be bound by over-regulation, be this from our own government or from Europe."

Barclays Capital retains equal weight on Berkeley Group Holdings, target raised from 2581.2p to 3713.5p

Interim Management Statement

StockMarketWire.com
Berkeley posts adjusted pre-tax profits of £242.3m for the six months to the end of October - up 10.2% on last time - and declared a further interim dividend of 100 pence per share, payable on 22 January.

Pre-tax profits were £293.2m - down from £304.9m last time due to the impact of ground rent sales.

Berkeley says it remains ungeared with £263.1 million of net cash and cash due on forward sales over the next three years of £3.1 billion and is on track to meet its three year earnings guidance.

Chairman Tony Pidgley said: "With the strength of our recent performance and the visibility over future profitability and cash generation from our land bank and forward sales, I am delighted to confirm that we have today set out proposals to increase Berkeley's 2021 dividend return target from £13 per share to £16.34 per share. With £4.34 per share having already been paid, the remaining £12 per share is planned to be paid in annual dividends of £2 per share over the next six years. This gives a clear and steady dividend return plan for the next six years whilst also allowing for further investment in the business."

The group reports a good period of trading in the first six months of the year with adjusted pre-tax earnings coming from from the sale of 2,091 homes at an average selling price of £506,000. Together with a further £51.0 million of profit from the sale of ground rent assets, this represents total pre-tax earnings of £293.3 million.

UP 7+%

Credit Suisse today reaffirms its neutral investment rating on Berkeley Group Holdings (The) PLC (LON:BKG) and raised its price target to 3101p (from 2814p).

From the FT today:
"Hedge fund managers are taking short positions against the biggest listed provider of luxury London homes in a bet that weakening emerging markets will put the once buoyant sector into reverse. A small group of funds are targeting the shares of Berkeley Group, the main listed proxy for new high-end London property, amid signs that Asian and Russian buyers are deserting the market.
Odey Asset Management, BlueMountain Capital Management and Anchorage Capital took short positions against the FTSE 100 builder in January, worth 2.2 per cent of its share capital, according to data disclosed to the Financial Conduct Authority.
The short positions run against analysts’ consensus that Berkeley is well positioned to continue growing — and indicate the hedge funds believe pricing and transaction levels for luxury London homes have further to fall."

Jefferies response to the above:
"Perhaps the box office hit 'The 'Big Short' is spurring investors to short Berkeley group in what some perceive as an overheated London housing market. We would not short Berkeley Group as its investment case is based on strong foundations, solid ground and physical properties rather than intangible synthetic mortgage products. We still believe cash is king and Berkeley will meet its promises to return cash to shareholders; go long not short.
Press reports that several investors are shorting Berkeley Group It appears to us that some investors are worried about over heating in certain 'high end' pockets of the London housing market and are using Berkeley as a proxy to bet against this market.
In our view Berkeley is the wrong vehicle: Much like in 'The Big Short' those initially wanting to bet against the US housing market did not have a vehicle to go short against, so they had to create one, however we do not believe that Berkeley Group is the appropriate vehicle. With ASPs of £550,000 this year and £650,000 next Berkeley hardly, in our view, provides a playground in which the rich and famous play at property developing and speculating. Mention trophy assets to Mr Pidgley and he is likely to explain in words that will leave no room for ambiguity that he does not invest in trophy assets. Mr Pidgley also has, in our view, a rather enviable track record in calling the London housing market.
Help to Buy London: Interestingly the evening papers yesterday (Evening Standard - West End Final) ran with the headline 'Renters rush for Help to Buy Loans', suggesting that 15,000 first time buyers have applied for the new scheme in the first 7 days since its launch. Equity investors will of course be aware that Berkeley is the natural beneficiary here. We have a shortage of homes across London, over the last 20 years production has averaged less than 20,000 homes a year, compared to household population growth of 50,000 pa. Over the next 10 years the population in London is expected to grow by 1 million and yet to the total planning pipeline for new homes (even if there was sufficient labour to build these homes) is around 240,000.
Help to Rent London: The capital is crying our for rental properties and if Berkeley's overseas investor demand were to wane we know of around 20 funds raising but struggling to invest money in the fast growing private rented market.
The £175m question: Let us not forget that Mr Perrins and Mr Pidgley are seeking at their upcoming EGM to adjust their LTIP, to limit their payout to £175m each should they return the £16.34p per share to investors. If the London market does slow, we are sure they reduce or stop buying land, so cash generation remains strong and dividends are very likely, in our view, to get paid. With a yield of 6.4% we see attractions at these levels. Leave (most of) the rest of the sector out of this Quite how concerns over high end London should impact the national and 'non-London' regional listed housebuilders escapes us. We are not aware of any 'perceived' bubbles outside of London and the South East we doubt their (Help to Buy aided) returns are under threat. However one listed London housebuilder (Telford Homes TEF LN, N/R) seems to have been neglected by the shorting parties, shouldn't they short that London housebuilder as well?
Valuation: At 3129p Berkeley trades on a CY2016 P/B of 2.15x and offers a yield of 6.4%. Our 4650p PT is based on the simple average of a P/B multiple of 1.75x and a PER of 14x applied to our CY2016 estimates plus dividend probability weighted across our Neutral Case (50%), Upside Case (45%) and Downside Case (5%). Risks: Berkeley's fortunes are linked to the underlying UK housing market significant reductions in UK house prices, mortgage availability or material changes to the supply chain may lead us to reduce our estimates.

down £5.00 or 14% in just a day or two ...... pretty shitty if you're a holder!

Nice little buy by BlackRock, Inc..

See RNS