Berkeley Homes ups major site starts despite 20% profit fall

Berkeley Homes is cranking up investment in new regeneration sites despite pre-tax profits falling by just over a fifth to £775m.

This morning the luxury house builder said it was entering a new investment phase targetted at developing major regeneration sites in London and the South east, as well as its relatively new Birmingham market.

Berkeley’s net cash position at the April year-end stood at £975m, which was 42% higher than a year before.

Signalling the new longer-term investment phase for the business, Berkeley said it had commenced production on 14 sites in the year, ten of which have been in the second half of the financial year.

These include the next wave of regeneration sites, such as Oval Village, Southall Waterside,  Clarendon in Hornsey and King’s Road Park in Fulham and Hartland Village in Hampshire.

Chairman Tony Pidgley said that in this new next phase of its strategy, Berkeley is targeting a long-term, sustainable pre-tax return on equity of 15%.

The return reflects the investment required to bring forward the next generation of sites, their longevity and relative risk profile.

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