viewBerkeley Group

Berkeley Group warns on profits as building sites shut due to coronavirus

The housebuilder said it still plans to pay out a dividend of 99.32p per share at the end of the month

Berkeley Group -

Berkeley Group Holdings PLC (LON:BKG) warned that profits would be hit as it is starting to shut down more — but not all — of its building sites as the coronavirus epidemic hits its supply chain.

With more than 11,000 people working across its sites in December, the FTSE 100 group said suspending work on developments “will take time” and that it was focusing effort on completing “a number of private and affordable homes which are close to handover”.

READ: Rerkeley Group cancels extra £455mln cash payout

The supply of materials to its sites has been facing “increasingly considerable challenges”, the company said. 

What's more, like many of its fellow housebuilders, it has been hit by a volley of criticism from the public for keeping its sites open.

Rival Redrow also made a U-turn on keeping its sites open on Friday, with both decisions coming after the government introduced new tighter social distancing measures at the start of the week to limit the spread of the coronavirus, keeping people away from work unless their job was essential, and on Thursday night issuing guidance to effectively shut down the housing market.

As for profits, the disruption from closing sites will affect the final six weeks to 30 April of Berkeley's financial year, meaning it now expects profits to be “in the region of £475mln”, having said it was “on track” to meet expectations of around £555mln earlier in the month.

The board said, however, that it still plans to pay out a dividend of 99.32p per share, costing £125mln on 31 March and will return another £140.1mln to shareholders by 30 September through a combination of share buy-backs and dividend.

A reassessment of the company’s position with regard to postponed returns will be provided alongside full year results, which are due in mid-June.

Berkeley shares were down 1.6% to 3,635p by mid-morning on Friday.

Quick facts: Berkeley Group

Price: 4065 GBX

Market: LSE
Market Cap: £5.12 billion

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