Slow prop­erty mar­ket con­tin­ues to hit Berke­ley

Western Daily Press (Saturday) - - Business - RAVENDER SEMBHY busi­[email protected]­erndai­ly­

HOUSE­BUILDER Berke­ley has re­ported a sharp fall in prof­its as Brexit un­cer­tainty and a slow prop­erty mar­ket con­tinue to drag on the firm.

The group – which is fo­cused on Lon­don and the South East – said yesterday that revenue fell 0.7 per cent at £1.65 bil­lion in the six months ended Oc­to­ber 31.

How­ever the City yesterday re­acted pos­i­tively to its re­silience.

Pre-tax profit fell more than 25 per cent to £401.2 mil­lion and Berke­ley sold 2,027 homes at an av­er­age sell­ing price of £740,000.

Berke­ley said the mar­ket in Lon­don and the South East “lacks ur­gency” and un­der­ly­ing de­mand was con­strained by a macro un­cer­tain­ties and pol­icy in­ter­ven­tions, such as high trans­ac­tion costs and mort­gage re­stric­tions.

On Brexit, Berke­ley said that, while Bri­tain’s EU di­vorce was hit­ting sen­ti­ment and con­fi­dence, it be­lieved Lon­don would re­main a “vi­brant, tol­er­ant and di­verse global city” which would con­tinue to see de­mand for hous­ing in­crease.

Boss Rob Per­rins said he backed Prime Minister Theresa May’s With­drawal Agree­ment be­cause it guar­an­teed “fric­tion­less trade”.

He said: “Busi­nesses want cer­tainty but peo­ple have to be prag­matic. We need fric­tion­less trade and the agree­ment gives us that.”

Berke­ley also up­graded its profit guid­ance by at least five per cent fol­low­ing what it called a “re­silient” start to the year. The up­grade comes af­ter the group re­peat­edly warned of a prof­its fall next year, hav­ing pre­vi­ously fore­cast a drop of around 30 per cent.

The group said: “With the re­silient start to the year, Berke­ley is in­creas­ing its pre-tax profit guid­ance for the cur­rent year by at least five per cent and now an­tic­i­pates a sim­i­lar split be­tween the first and sec­ond half to last year when 55 per cent was earned in the first six months of the year.”

Shares rose more than 2.5 per cent at 3,410p in early trade yesterday.

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