19 June 2024 , 09:28
1416
0
Housebuilder Berkeley has upgraded its outlook for the year despite the "challenging" conditions in the housing market.
The London-listed firm's boss noted a "lack of urgency" in property demand and anticipates this trend to persist until interest rates begin to drop from their current 5.25%. However, due to a "strong" order book, the group has improved its guidance for the current financial year.
Berkeley, which primarily focuses on developments in London and southern England, now expects a pre-tax profit of £525million for the current financial year, raising its previous target by 5%. This will still represent another decline in profit for the company.
The group reported a £557.3million pre-tax profit for the year to April, down 7.7% from the previous year due to the sector slowdown. The company admitted it has been affected by interest rates remaining high for longer than anticipated but highlighted "signs that the outlook is improving with inflation greatly reduced, the first interest rate cut expected later this year and a return to growth".
Rob Perrins, Berkeley's chief executive, said: "This is a strong performance in a challenging and volatile operating environment, demonstrating the resilience of Berkeley's business model with its focus on the country's most undersupplied markets. We continue to see good levels of inquiry for well-located homes built to a high standard of design and quality but recognise that the current lack of urgency in the market is likely to remain until the long-anticipated reduction in interest rates commences.
I'm a property expert - my guess for the cheapest time to buy a home this year
"Berkeley continues to benefit from a strong order book and has already secured 80% of its sales for next year, underpinning today's 5% increase in guidance." Shares in Berkeley were 2% lower in early Wednesday trading.