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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.

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

.

The number of British property funds suspended following the country's vote to leave the EU doubled to six on Wednesday, leaving 15 billion pounds ($19.4 billion) frozen in the biggest seizing up of investment funds since the 2008 financial crisis.

The funds pulled down the shutters after a wave of investors asked for their money back amid speculation about a possible drop in commercial property prices in reaction to the result of the June 23 referendum.

That in turn has raised concerns about the outlook for the broader financial system, given the risk of investors bailing out of other asset classes in a panic and of lenders to the sector such as banks suffering fresh balance sheet stress.

Henderson Global Investors, part of Henderson Group , said on Wednesday it had temporarily suspended trading in its 3.9 billion pound UK Property PAIF and PAIF feeder funds due to "exceptional liquidity pressures" given uncertainty after the Brexit vote and the other suspensions.

It was followed within the hour by Columbia Threadneedle, part of the Ameriprise Group, which said it had suspended trading in its Threadneedle UK Property Fund.

Canada Life said it had also suspended its Canlife Property and Canlife UK property funds, describing this as a deferral of requests to withdraw investments. "The deferral can be for up to six months, enabling the funds to ensure property values reflect market conditions," it said in a statement.

They joined rival funds managed by M&G Investments, Aviva Investors and Standard Life Investments which suspended trading on Monday and Tuesday.

"Over half of the property fund sector is now on ice, and will remain so until managers raise enough cash to meet redemptions. To do that they need to sell properties, and as any homeowner knows, that is not a quick or painless procedure," said Laith Khalaf, senior analyst at fund supermarket Hargreaves Lansdown.

"These funds are therefore likely to be closed for weeks and months rather than simply a matter of days," he wrote in a note to clients.

Britain's Financial Ombudsman Service said it had begun to receive calls from retail investors worried about the closures and the potential hit to their savings. "Although the decision to suspend redemptions was expected, the extent of the suspensions by the three funds so far is quite troubling," a spokeswoman said shortly before Wednesday's fund announcements.

Keenan Vyas, Director in the Real Estate Advisory Group at Duff & Phelps in London, said the consequences could be profound.

Deutsche Bank today reaffirms its buy investment rating on Berkeley Group Holdings (The) PLC (LON:BKG) and cut its price target to 3829p (from 3981p).

Did I read BKG is likely to fall-out of the FTSE 100 - or is this another Post-Brexit scare story? . . . . although it's possible some other Stocks are to enter, due to their recent rise, perhaps.... that might be the "push-factor"
Still, with a Yield of nearly 7.5% - , this is still a "Keeper" -IMHO.
EDIT ( 28Nov2016)- sp 2420p so maybe a tiny slippage...

StockMarketWire.com
Berkeley Group Holdings is re-iterating its guidance for the delivery of £2.0 billion of pre-tax profit over the three year period ending on 30 April 2018, having delivered the first £0.5 billion of this in the year ended 30 April 2016.

Shareholders at today's annual general meeting will be told that Berkeley entered 2016/17 with record cash due on forward sales of £3.25 billion and future estimated land bank gross margin of £6.15 billion, respectively. This is a consequence of Berkeley operating its added value strategy which manages risk through the cycle.

The update will say: "In particular, this involves selling properties early in the development cycle where possible and ensuring land with implementable planning consent is in place to underpin production.

The forward sales provide good visibility over the next two years and Berkeley re-iterates its guidance for the delivery of £2.0 billion of pre-tax profit over the three year period ending on 30 April 2018, having delivered the first £0.5 billion of this in the year ended 30 April 2016.

"This visibility of cash flow and earnings also underpins the Company's dividend plan, of which the next £1.00 interim dividend per share is payable to shareholders on 15 September 2016 (£137 million), bringing the total returns paid to shareholders since 2011 to £6.34, with a further £10 per share to be paid evenly over the remaining 5 years to September 2021.

"Following the dividend payment and taking into account the £20 million spent on acquiring the Company's shares on 24 June, Berkeley expects to remain ungeared at the 31 October 2016 half year, with the actual level of cash dependent on the extent and timing of land and build investment.

"Berkeley reported in its full year results in June that reservations were some 20% lower in the first five calendar months of the year, compared to the same period in 2015, as customers adjusted to higher property taxes and the uncertainty surrounding the UK Referendum, with Berkeley deferring the release of new product to the market.

"After an hiatus either side of the Referendum, the market in August, traditionally a quiet month, has returned to the relative levels reported for the first five months of the year; approximately 20% down on August 2015, reflecting the lower levels of available product, as well as the broader market conditions.

"Importantly, throughout 2016, site visitor numbers and enquiries have been at similar levels to the same period last year demonstrating the strength of underlying demand, although customers are taking longer to commit. Pricing has remained resilient and above business plan levels with reservation cancellation rates at normal levels, following a temporary and expected increase after the UK Referendum result

"The focus for Berkeley is on delivering the high quality homes and places for our customers during this financial year and 2017/18, whilst closely matching its capital investment into new phases and developments, which are for delivery from 2018/19 onwards, to the market demand, as it has always done."

Berkeley says it has been selective in the land market, acquiring just two sites in the period, both unconditionally, with planning advanced on a number of existing sites.

"What is increasingly clear is that Government policy, which has been helpful outside London, has had a negative effect on the capital. Transaction taxes are now too high and this is restricting both mobility in the second hand market and the pace of supply and delivery of new homes in London and the South East.

"There is also a tension between the national policy on Starter Homes and the London Mayor's ambition to build more affordable housing, while the very high rates of the Community Infrastructure Levy adopted by local authorities now pose a significant threat to development viability.

"While these challenges persist, and the barriers to entry for small builders remain high, London will fall well short of its targets for new homes. This is not just a problem for business and ordinary people in the capital but for the country as a whole. London is the engine of our national economy and the principal driver of fiscal revenues. So this is not just a question of housing Londoners - important though that is. It poses a risk to deficit reduction and the prosperity of the whole country.

"With its strong balance sheet, forward sales, high quality land bank and leading brand and customer service, Berkeley is well positioned to deliver its earnings and dividend guidance and optimise shareholder returns in the current market conditions, whilst retaining sufficient capital to be flexible should suitable new investment opportunities arise."

StockMarketWire.com
Berkeley Group posts pre-tax profits of £392.7 million for the six months to the end of October - up 33.9% on last time.

This is from the sale of 2,076 homes (2015: 2,091) at an average selling price of £655,000 (2015: £506,000), reflecting the mix of properties sold in the year.

TYhe group says: "Having delivered pre-tax profits of £0.5 billion for the year ended 30 April 2016, these results mean that the Company remains firmly on target to deliver pre-tax profits of £2.0 billion over the three year period ending 30 April 2018.

"The remaining 18 month period is underpinned by forward sales. In total, Berkeley has £2.9 billion of cash on exchanged sales contracts which is due over the next three years. As always, the scale of the regeneration schemes from which we expect to generate the remaining earnings makes the delivery of profit in specific annual periods sensitive to timing and we prioritise quality ahead of individual period financial targets. The strength of this position gives Berkeley confidence to announce a new five year target to deliver at least £3.0 billion of pre-tax profits in the five years beginning 1 May 2016.

"Excluding an hiatus around Brexit, reservations for the six months remain in line with the beginning of the calendar year and are approximately 20% down on the same period last year as a result of the market adjusting to increased stamp duty and the economic uncertainty arising from the EU Referendum result. The underlying market has begun to adjust to these events and Berkeley plans to launch new product in the New Year which will be delivered in financial years beyond the period to April 2018."

Highlights:
- Net asset value per share - up 7.9% to 1,418 pence (April 2016: 1,314 pence)

- Forward sales - £2.90 billion (April 2016: £3.25 billion)

- Land bank - £5.9 billion of estimated future gross margin (April 2016: £6.1 billion) across 42,125 plots (April 2016: 42,858 plots)

- Market conditions - Excluding an hiatus around Brexit, reservations are 20% down on the same period last year, as a result of the market adjusting to increased stamp duty and the economic uncertainty arising from the result of the EU Referendum

- People - Over 15,000 people working across our sites, an increase of some 8.7% since April 2016, with 603 apprenticeships in the six months.

Numis today upgrades its investment rating on Berkeley Group Holdings (The) PLC (LON:BKG) to buy (from add) and left its price target at 3844p.

Deutsche Bank today reaffirms its buy investment rating on Berkeley Group Holdings (The) PLC (LON:BKG) and cut its price target to 3599p (from 3876p).

StockMarketWire.com
Berkeley Group's underlying reservations in the seven months since the immediate Brexit referendum effect were down 16% but the last two months were ahead of last year.

It said pre-tax profits for the year ended 30 April were expected to be at the top end of analysts' expectations, with the actual outturn dependent upon completion timing on Berkeley's larger developments.

A similar level of profitability was anticipated for the year ending 30 April 2018.

The group said the housing market in London and the South East had now stabilised and enquiry levels remained robust, cancellation rates were at normal levels and pricing continued to be resilient and above business plan levels.

It said: "The reduction in reservations is across all price points and reflects the ongoing impact of both Brexit uncertainty and the changes in recent years to SDLT and mortgage interest deductibility.

"This has been partly offset by the continued availability of mortgage finance at low interest rates, favourable currency exchange rates and the quality of Berkeley's well-presented and well-located homes.

"When coupled with the planning environment and increased demands from the combination of affordable housing, CIL, Section 106 obligations and review mechanisms, this has resulted in new starts in London falling by some 30%."

Berkeley said it was concerned by this under-supply and the knock-on effect it had on the provision of housing of all tenures which, if not addressed, represented a threat to London remaining the inclusive and open global city which was so important to London and the UK's growth and prosperity.

It added: "We therefore welcome the Government's White Paper and the Mayor's continued focus on housing but note that these will take time to effect change, given the competing priorities."

Berkeley said it was uniquely placed to maintain its high levels of production in London and the South East.

StockMarketWire.com
Berkeley continued to trade in line with management's expectations in the four months from 1 May, with sales prices achieved remaining above business plan levels, shareholders at the annual general meeting today will be told.

An update at the meeting will say: "This, coupled with the group's strong forward sales position and unrivalled land bank, provides the Board with the confidence to reaffirm its guidance that Berkeley is on track to deliver at least £3.0 billion of pre-tax profit in the five years ending 30 April 2021, with profits for the current year anticipated to be at least as strong as 2016/17.

"While Berkeley is in excellent shape, the London market continues to be adversely impacted by both, uncertainty around the terms and implications of Brexit and, the changes in recent years to SDLT and mortgage interest deductibility.

"This has been partly offset by good availability of mortgage finance at low interest rates, favourable currency exchange rates and the quality of Berkeley's well-presented and well-located homes.

On the supply side, the planning environment remains challenging with the multiple requirements of Affordable Housing, CIL and Section 106 requirements, still yet to reflect the current market conditions. As a consequence, new construction starts in London remain some 30% lower than 2015.

"With cash balances forecast to be higher at the half year than at the start of the year, the visibility of earnings and financial strength of the Group underpin Berkeley's Shareholder Returns Programme, under which in excess of £2.2 billion (£16.34 per share) is being returned through a combination of dividends and share buy-backs by 2021 on a six-monthly basis.

"The returns initially equated to £2 per annum but this has increased to £2.04 per annum following share buy-backs undertaken since January 2017.

"As announced on 17 August 2017 a dividend of £70.4 million, or 51.76 pence per share will be paid to shareholders on 15 September 2017 with the remainder of the £138.8 million of the return for the 6 months ending 30 September 2017 having been satisfied through share buy-backs of £68.5 million.

"The Company also announced that the next six-monthly return of £138.9 million will be made by 31 March 2018, with the amount to be paid as dividend to be announced in February 2018, taking account of any share buy-backs in the intervening period. Share buy-backs will be undertaken to the extent the Board believes these are in the best interests of all shareholders and not only when the shares are materially under-valued.

"In total, by 30 September 2017, Berkeley will have returned £8.34 of the £16.34 target.

"With its strong balance sheet, forward sales, high quality land bank and leading brand and customer service, Berkeley is well positioned to deliver its earnings guidance and optimise shareholder returns in the current market conditions, whilst retaining sufficient capital to be flexible should suitable new investment opportunities arise."

Dir selling is a "worry" but that's what we should expect as sp rises and Misses wants a fur coat ( sorry Carribean Holiday ).... There are few days they can sell and sp seems to be holding, possibly due to further cash distribution promised.
All talk of Affordable Homes MUST exclude London and major cities.... land is at a premium and no-one want vagabonds/chancers in their neighbourhood..... So, I'm guessing there will be more "New Towns" carved out of sleepy hamlets ( Poor souls ), to achieve anything like what is promised. BKG isn't really in that Market, so I guess they will continue with what they do . . .. although I did read they had plans to convert 2U2D properties in inner-cities..... but this may come to little more than "gentrification" with more high prices.
EDIT(8Dec2017)-sp up 8% after "v.good results" - Those followed Dir-Sells must weep. Has been a good Invest. =One of v.few!

StockMarketWire.com
Berkeley Group posts strong first half results with pre-tax profits up 35.8% at £533.3m.

The group has increased its five year pre-tax profit guidance starting 1 May 2016 to £3.3bn from £3.0bn.

Revenues of £1,607.7m for the six months to the end of October were up by 13.7% from a year ago.

The group said the 2017/18 full year results would represent a peak for Berkeley, before returning to more normal returns in 2018-19 and guidance of £1.5bn of pre-tax profit for these two years would be approximately 60% weighted towards the current year.

Berkeley's objective is to be London's leading place-maker, balancing strong operational performance with a desire to produce homes of a high quality in fantastic places for all Londoners, playing a key role in delivering the 300,000 new homes this country needs each year.
The group said operational highlights included:
- 2,117 homes delivered - includes more than 10% of London's new private and affordable homes

- £300 million of subsidies provided to deliver affordable housing and committed to wider community and infrastructure benefits in the period

- Over 12,000 people working across its sites, including over 850 apprenticeships in the six months

- The Berkeley Foundation has added three new strategic partners to its four enduring partnerships, with over £12 million committed to more than 100 charities since the Foundation's inception in 2011

Chairman Tony Pidgley said the results reflected Berkeley's disciplined execution of its unique operating model which places product quality and financial strength at its heart, allowing for investment at the right time in the cycle.

Pidgley said: 'Most major development opportunities today involve complex brownfield sites that require a huge amount of time, expertise and capital to bring them forward and a commitment on all sides to share the risks and rewards, often over one or more decades.

'Berkeley has the requisite expertise and capital to undertake these complex developments that carry high operational risk, which others are usually not willing or able to take on.

'It is from this foundation that we can create beautiful, sustainable places where people love to live.

'While the political context for housebuilding is turbulent, where there is stability, the potential for growth and delivery remains strong.

'The London Mayor, Sadiq Khan, has set out his priorities very clearly.

'We support the increased target in the draft London Plan of 66,000 new homes a year.

'In our experience, the Mayor is open for business and prepared to fast-track sites that achieve the threshold of 35% affordable housing.

'We are also pleased with progress in our newest business, St Joseph, which acquired two sites in the period.

'The new West Midlands Mayor and Birmingham City Council are showing real leadership and a willingness to make decisions and enable developers to get on with building more good homes.

'We welcome the focus on housing in last month's Budget; particularly the help for small developers and measures to get more land into development.

'It was good to see action on Stamp Duty in respect of First Time Buyers.

'However, other changes to SDLT and mortgage interest deductibility in recent years remain a constraint on transaction levels and social mobility.

'This is felt most keenly in London where all housing transactions are down 18% since last year and new starts remain more than 30% down on 2015.'

StockMarketWire.com
High-end housebuilder Berkeley Group reaffirmed its full-year guidance, but continued to express caution over the London housing market amid concerns about the impact of Brexit.

Berkeley reaffirmed its guidance to deliver at least £3.375bn of pre-tax profits in the five years from 1 May 2016 to 30 April 2021, with at least £1.575bn pre-tax profit to be delivered in the two years ending 30 April 2019.

The housebuilder continued, however, to express cautions over its key market in London, which remains constrained by high transaction costs, restrictive income multiple limits on mortgage borrowing and prevailing economic uncertainty, accentuated by Brexit.

Berkeley said it expects that net cash at the half year would be above the year-end position of £687.3m.

Add:

As announced on 16 August 2018 a dividend of £44.0 million, or 33.30 pence per share, will be paid to shareholders on 14 September 2018 with the remainder of the £139.2 million return for the six months ending 30 September 2018 having already been satisfied through share buy-backs of £95.2 million. The Company also announced that the next six-monthly return of £139.2 million (£1.06 per share) will be made by 31 March 2019, with the amount to be paid as dividend to be announced in February 2019, taking account of any share buy-backs in the intervening period.