Berkeley Group is to enhance its £1.8bn dividend plan launched in 2011 by a further £500m.
The company said it would pay out £16.34 per share instead of the planned £13 per share by 2021 after reviewing its financial strength, visibility over future earnings and cash generation and market conditions.
The announcement came as the company revealed a slight dip in pretax profit for the half year, from £304.9m to £293.3m, which was hit by the sale of a portfolio of ground rents.
Pretax profit was up by 10.2% to £242.3m when the £51m profit from ground rent sales – down from £85.1m – was stripped out.
The upmarket London-focused housebuilder currently has forward sales of £3.1bn, up from £3bn in April, and a landbank of £5.4bn, after acquiring six sites during the period.
Berkeley chairman Tony Pidgley said: “With the strength of our recent performance and the visibility over future profitability and cash generation from our landbank 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.”
