Housebuilder Berkeley (BKG) fell 1.8% to £47.64 as it sounded warnings on the potential impact of Brexit and the pandemic going forward alongside its first half numbers.

However, it is sticking to its full-year guidance for now.

For the six months ended 31 October, pre-tax profit fell 16.6% to £230.8 million year-on-year as revenue fell to £895.9 million from £930.9 million.

The company sold 1,104 new homes in the first half, down from 1,389 last year, at a price of £799,000, up from £644,000 year-on-year.

Forward sales increased to £1.94 billion from £1.86 billion reported at the end of the previous financial year.

Looking ahead, the company reiterated full-year pre-tax profit guidance of £500 million although it will be split more evenly than the previously guided with one third in the first half and two thirds in the second half. Berkeley also committed to a target of returning £280 million to shareholders.

Davy analyst Colin Sheridan commented: ‘Berkeley has retained its strong balance sheet position with £954 million in net cash at the end of October, down somewhat from £1.14 billion at the same point last year.

‘The annual cash return of £280 million has been reiterated, and we expect this could be significantly exceeded in the coming years.’

AJ Bell investment director Russ Mould said: ‘Berkeley management can see what all of us can; the housing sector is buoyant thanks to pent-up demand from lockdown, people are moving to get more space or a different set-up having experienced weeks at a time indoors this year, and a temporary stamp duty holiday is providing a tailwind to sales activity.

“However, unemployment is mounting and if an unruly Brexit further dents consumer confidence then this will eventually lead to pressure on the property market.’

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Issue Date: 04 Dec 2020