Berkeley’s first half profit slumps on Brexit and election worries
HOUSEBUILDER BERKELEY Group has reported a slump in first half pre-tax profit after it sold homes at lower prices in a Brexit-hit market.
With less than a week to go before the General Election, buyers are holding off on spending.
The company said pre-tax profit fell 31 per cent to £277m in the six months to October 31. Revenue fell nearly 44 per cent to £931m.
The FTSE-100 company said the uncertainty surrounding the upcoming General Election and delay to Brexit was damaging the economy.
It delivered 1,389 homes during the period, down from 2,027 last year, while the average selling price fell 13 per cent to £644,000.
The firm said some housebuilders have been hesitating to embark on new projects.
The company said the extended Brexit deadline, adding to three years of uncertainty for the sector, and next week’s General Election have put pressures on developers.
The management team had been expecting the results, signalling to investors well in advance there would be a drop.
However, Berkeley’s chairman Tony Pidgley said the uncertainty caused by Brexit and other event, might be a boon for Berkeley, saying his business could capitalise on the caution of some of its rivals.
“Looking forward in London, Berkeley is now one of very few remaining developers delivering long-term regeneration programmes at scale, due to the complexity of bringing these sites through the development process, their high capital requirements and the uncertain macro conditions that have seen others step back, despite the city’s undersupply of housing,” he said.