Berkeley says to hit profit target early

Published 05th Sep 2011

London-focussed builder and developer Berkeley Group said it would hit a profit target two years earlier than expected thanks to more buoyant conditions since May last year.

The group, renowned for its savvy London land buys, said last year it was targeting to double pretax profit within five years as well as lift the margin in its land bank.

"The board believes that it is now positioned to achieve the profit target set in the five year plan at least two years earlier than originally anticipated, to the extent that market conditions prevail," Berkeley's chairman Tony Pidgley said in a statement ahead of its annual meeting on Monday.

Berkeley added that trading had been ahead of management expectations since May 2010, and it had achieved a significant number of planning consents, several of which were achieved in the past four months.

Forward sales stood over 850 million pounds at the end of August, compared with 813.5 million at the end of April and it had secured a further seven sites in the quarter.

The company unveiled a dividend strategy in June that will see it return 1.7 billion pounds in cash to shareholders over the next 10 years

Builders and developer focussed on the South-East of England are benefiting from stronger demand than the rest of the country. Sales in areas such as Wales, the North West, Yorkshire and Humberside can take up to twice as long as those in London, according to new data from Hometrack.

Source: ' Reuters '

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