The London housebuilder flags geopolitical risk and macro uncertainty even as it maintains full-year guidance
Berkeley Group Holdings PLC (LSE:BKG), the London-focused luxury housebuilder, has reaffirmed its profit targets for the current financial year while painting a cautious picture of the trading environment, citing geopolitical tensions and macroeconomic uncertainty.
The company said it remains on track to deliver pre-tax profit of £450 million for the year, with a similar level expected for its 2027 financial year.
Berkeley also maintained its target for a net cash position of around £300 million, reflecting the settlement of more than £250 million of land creditors and shareholder returns of around £190 million so far this year.
The group warned, however, that the trading environment has remained "constrained" by the impact of geopolitical events on consumer confidence, and said the situation in the Middle East is weighing on risk sentiment.
Berkeley said it is alert to the risk of further deterioration in macroeconomic conditions, including the prospect of higher inflation and interest rates staying elevated for longer.
Sales enquiries have held up, the company said, with the value of underlying reservations recovering toward levels seen before the pre-Budget period last autumn.
Looking beyond 2027, Berkeley said it will focus on cash generation, balance sheet strength and shareholder returns, while optimising its land portfolio and developing its build-to-rent (BTR) strategy.
The company expressed support for the government's "Homes for London" package, developed with the Ministry of Housing, Communities and Local Government (MHCLG) and the Greater London Authority, describing it as containing "all the right ingredients" to address viability challenges in the current housing market.
Berkeley also flagged ongoing difficulties with the Building Safety Regulator (BSR), saying its initial implementation had "severely impacted" the supply of new homes in London and other urban areas.
The company said progress has been made over the past six months but that approvals being achieved within prescribed timeframes remain the exception rather than the norm.
Since its last interim results, Berkeley has returned £59 million to shareholders through share buy-backs, bringing the total for the year to £191 million and to £330 million since the launch of its Berkeley 2035 strategy in December 2024, which it said is running ahead of schedule.