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Housebuilder Berkeley Group Holdings PLC on Friday reported a slight contraction in half-year profit and revenue as operating expenses and net finance costs widened.
In the six months to October 31, pretax profit fell 2.0% to £284.8 million from £290.7 million a year ago. Revenue was 1.6% lower at £1.20 billion from £1.22 billion.
During the period, Berkeley delivered 2,080 homes and 251 joint ventures, compared to 1,818 homes and 395 joint ventures a year prior.
Meanwhile, operating expenses increased by 19% to £89.9 million from £75.5 million. However, Berkeley noted that for construction, material cost inflation has started to recede. The firm expects ‘build cost inflation to start to moderate during 2023 from the current elevated levels which have been between up to 10% across [its] portfolio on a blended basis for some time’.
Further, net finance costs more than doubled to £10.6 million from £5.0 million. Berkeley’s net cash increased by 28% to £343 million from £269 million however.
Chief Executive Officer Rob Perrins said the ‘robust’ results reflect long-term operating strength amid ‘an uncertain and challenging operating enivornment’. He added that there is enduring appeal for high-quality London and South East homes.
Looking ahead, Perrins said: ‘In these uncertain times, Berkeley has a very clear strategy; realising its forward sales, matching supply to demand, adding value to its existing land holdings and pipeline sites, protecting operating margins and focusing on cash generation ahead of the income statement.’
Berkeley shares were 0.6% higher at 3,821.00 pence each on Friday morning in London.
By Tom Budszus, Alliance News reporter
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