Berkeley Group's half-year profits rise on housing demand

6th Dec 2013 09:30

- Profits and revenues grow on housing demand- Gross margin target reached- Dividend raised to 90p from 15pUK housebuilder Berkeley Group saw its pre-tax profit rise 19.2 per cent to 169.2m pounds in the first half, driven by strong demand in the housing sector. Revenue jumped 19.7% to £821m in the six months ended October 31st as the company sold 2,294 new homes in the period, up from 1,927 last year.Operating profit, which includes £29.6m on disposal of 534 investment properties to M&G Investments, increased 16% to £169.6m. Basic earnings per share increased by 22% to 100p per share.During the period the group invested £278m in land, acquiring a further 1,754 plots. The estimated future gross margin in its land holdings has climbed £195m to £3.04bn, reaching the firm's target of growing to over £3bn some 18 months earlier than anticipated. Berkeley has remained cash generative, starting and ending the period ungeared with net cash of £78.9m."This performance maintains the board's view that Berkeley is on course to meet the first milestone payment of £568m by September 2015 and to return £1.7bn in cash to shareholders no later than September 2021," said Chairman Anthony Pidgley.The group raised its interim dividend to 90p per share from 15p last year. Pidgley warned that the long-term challenge for the UK is the significant housing shortfall which continues to grow. The housing sector has been boosted by government programmes including Help to Buy and Funding for Lending.RD