Housebuilder鈥檚 results exceed expectations as board predicts outperformance for year overall

Housebuilder Berkeley released its half-year results today, showing pre-tax profit up 18.5% to 拢61.6m, compared with 拢52.0m for the same period in 2009.

Announcing the figures for the six months ended 31 October 2010, the board said it was confident that Berkeley could 鈥渙utperform management鈥檚 original expectations for the current year鈥� and was 鈥渨ell placed for the following year鈥�.

The operating margin of 17.4% was at a similar level to the first half of 2009, with net finance income of 拢1.8m (down from 拢3.0m a year earlier) and joint ventures contributing 拢1.2m of profit (against a 拢1.6m loss a year earlier.)

Net cash fell during the six-month period, however, to 拢252.7m from 拢316.9m at April 2010.

Earnings per share rose by 19.2% compared with the same period in 2009, to 33.5p.

Analyst Kevin Cammack of Cenkos said that the interim results were better than expected and that the group looked 鈥渂etter positioned than any housebuilder to withstand current conditions鈥�.

Managing director Rob Perrins said: 鈥淭oday鈥檚 results, which show an increase in both earnings and sales reservations approaching 20%, demonstrate the underlying resilience of the housing market in London and the South East over the last six months.

鈥淎s a consequence, cash due on forward sales has increased by 21.9% over the period, providing forward visibility in a period which has seen Berkeley increase the number of sites from which it is selling.鈥�

Since the start of the year, Berkeley has acquired some 2,500 plots, including prime London sites in Westminster and on Hammersmith Embankment, both completing in the second half, and a site for 1,000 new homes in Horsham.

 

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