The London-focused housebuilder says it remains on track to hit its four-year profit target, even as buyers hold off ahead of the Budget.
Berkeley Group Holdings (LSE: BKG) has told investors it remains on course to deliver £1.4bn of pre-tax profit over its current four-year plan, despite warning that cautious buyers and a shaky economic backdrop continue to weigh on the housing market.
The update carried no fresh share price move disclosed by the source, but it reaffirms guidance investors have been watching closely since Berkeley confirmed plans in April to cut production by around a quarter over four years, choosing to prioritise cash generation over chasing short-term profit growth.
The housebuilder said enquiry levels remained good and stable, but that buyers without an urgent need to move were still reluctant to commit, with some potentially waiting to see what emerges from the government's Budget at the end of October before signing contracts. Berkeley added that sentiment had softened further since the start of its financial year amid the conflict in the Middle East and ongoing UK political uncertainty.
Management said earnings were expected to be broadly even across the four-year plan, with profit slightly weighted towards the first half of the current year, a signal that Berkeley is sticking to its cash-first strategy rather than trying to accelerate output into a soft market.
The group used the update to repeat its call for stamp duty reform, urging ministers to cap the tax at 1% for first-time buyers and downsizers and to scrap the surcharge on investors, arguing the current regime is strangling transaction volumes and, by extension, housing supply – a message likely to resonate across the FTSE 100 housebuilding sector as investors wait to see whether the Budget delivers any relief.
This report is based on Berkeley Group Holdings’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Martin Sepion on Unsplash.
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