Berkeley welcomes rate cut

07-12-2007

Berkeley welcomes rate cut
Housebuilder Berkeley has confirmed it is to return £241.6 million to shareholders, a year ahead of schedule.

Confirmation of the earlier-than-planned payout came as the company reported an 11.2 per cent increase in pre-tax profits for the six months to October 31st.

Berkeley's profit before tax climbed to £90.6 million over the period, up from the £81.5 million reported for the corresponding period of last year.

Despite recent signs of an apparent slowdown in the UK's housing market, the company also reported a rise in forward sales.

As at October 31st, forward sales totalled £1.45 billion – a 55 per cent increase on the £936.3 million reported at the end of Berkeley's financial year.

The company also stressed yesterday's decision by the Bank of England to cut interest rates would give a boost to the sector.

In addition, Berkeley emphasised it was "uniquely placed" to respond to the current turbulence in the credit markets.

"Through identifying individual strategies for each of our sites which match supply with demand, never compromising on quality through a relentless attention to detail and by acquiring land on an opportunistic basis, Berkeley's strategy, with its London and south-east focus, is uniquely suited to the prevailing market conditions," explained Berkeley's managing director AW Pidgley.

Berkeley, which seeks to sell homes at an early stage in the development cycle, increased its landbank to 31,307 plots in the six months to the end of October – up from 30,128 plots at the end of the company's financial year.

Yesterday fellow housebuilder Bellway painted a more pessimistic view of current conditions in the housing market, reporting a seven per cent year-on-year drop in reservation levels in the four months to November 30th.

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