Berkeley Group Holdings PLC (LSE:BKG) has said it expects to meet its profit forecasts for the current and next financial year, as it reported that robust housing demand has enabled it to raise prices to mitigate cost inflation.
In an update issued ahead of today’s AGM, the housebuilder said it is on track to meet its guidance for a pre-tax profit of £600mln for the year to April 30, 2023, and £625mln for the 2024 financial year.
Profit for this year will be around 55% weighted to the second half, it added.
The FTSE 100-listed company said it continued to trade well during the first four months of this year, with the value of underlying sales ahead of the year ended April 30, 2022.
“The good level of demand continues to support pricing above business plan levels, which is sufficient to cover cost increases on a blended basis across Berkeley's developments,” it noted.
Forward sales at the end of the current year are expected to be marginally higher than the £2.17bn held at end-April 2022, due to the “ongoing resilience” of the sales market and second-half weighting of revenue and profits.
Net cash levels are anticipated to be similar to the £269mln at end-April 2022.
With the operating environment remaining volatile and cost inflation rising, Berkeley said it is focusing on “ensuring each site has the most appropriate development solution reflective of prevailing requirements, whilst new land will only be added to the land holdings very selectively”.