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The Markets
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The Markets
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Proactive UK has moved.
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Real Estate

Berkeley warns of uncertainty from EU vote as profits rise

House-builder says UK staying in EU is best way to keep London a "world city"

Housebuilder Berkeley Group (LON:BKG) warned that uncertainty from a British referendum on Europe could hit the housing market as it posted higher annual profits.

The group also said adjusted earnings this year were likely to match those in 2014/15.

Berkeley welcomed political stability following the UK general election and potential moves to help builders tackle the country's housing shortage.

But the London-focused group highlighted ongoing political uncertainty from next year's mayoral election in the capital and the proposed EU referendum.

Chairman Tony Pidgley said: "Berkeley is a supporter of the UK remaining in Europe as this is the best way for London to remain a world city.

"There is no doubt, however, that for business to thrive, we must not be bound by over-regulation, be this from our own government or from Europe."

Berkeley reported a 42% rise in pre-tax profits to £539.7mln on a 30.8% increase in revenue to £2.12bn in the year to April 30.

It sold 3,355 new homes at an average selling price of £575,000, and made extra profit of £85.1mln from selling a portfolio of ground rent assets.

The company has secured 28 new or improved planning consents and said all sites with permission were in production.

Adjusted pre-tax earnings rose 19.6% to £454.6mln and the group said it was issuing a further interim dividend of 90p per share payable in September.

It said market conditions were normal with good underlying demand and outlook.

Berkeley said that with £3bn of cash due on forward sales over the next three years and stable market conditions, it expected adjusted earnings in 2015/16 would be similar to 2014/15.

It is targeting pre-tax profits of about £2bn in the three years to 2017/18.

Managing director Rob Perrins said: "Berkeley has the land, forward sales, balance sheet and people to achieve its targets."

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