Berkeley Group will take an “appropriately cautious” approach to investment at a time of wider uncertainties, the housebuilder has said, despite reporting a 35.8% rise in profits in its half-year results.
Revenue was up 13.7% to £1.6bn while profit before tax jumped to £533.3m – up from £392.7m in the first half of 2016.
It sold 2,117 new homes – up from 2,076, year-on-year – with the average price rising from £655,000 to £719,000.
However, given ongoing uncertainties and changes to stamp duty, Berkeley warned that forward sales will continue to fall in the second half of the financial year, having already dropped 10.6% since 30 April to £2.45bn.
UK customers have been most affected by those headwinds, while overseas customers “continue to see relative value in the London market”.
Rob Perrins, chief executive of Berkeley, said: “While trading has been sufficiently robust to support an increase in our earnings guidance, we are appropriately cautious in our investment strategy at present.
“We remain prepared to take on operational risk for the right opportunities, but this will be balanced by reduced overall financial risk while the uncertainty prevails and until we have sufficiently visibility to invest more decisively.”
Meanwhile, Tony Pidgley, chairman of the company, called for support for Crossrail 2, saying: “The decision to invest in Crossrail 1 is now paying off handsomely and so too would a strong, unambiguous commitment to Crossrail 2.”
He went on to urge the government to amend regulations around the Community Infrastructure Levy, favouring an approach where infrastructure and affordable housing in sites with more than 100 homes are funded through Section 106 agreements and are exempt from CIL.
While Greenbelt protections should remain, Pidgley added, “we must be prepared to develop the urban fringe where this has little amenity or community value in its existing use”.
Alongside its results, Berkeley also announced three appointments to its board including Rachel Downey who is joining as a non-executive director. Justin Tibaldi and Paul Vallone are being promoted to the main board as executive directors.
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