UK homebuilder Berkeley says trading stable, reaffirms profit guidance

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By Aby Jose Koilparambil

(Reuters) -British high-end homebuilder Berkeley on Friday reiterated its annual profit forecast, saying trading has been stable over the first four months of its current fiscal year.

The housing market is expected to benefit from the UK’s first rate cut in more than four years last month, as well as from the government’s reform plans to boost land supply.

Britain’s ruling Labour Party is aiming to build 1.5 million homes before the next election and develop underused areas like car parks and green spaces with low environmental value, marking a significant shift from previous policies.

Berkeley, which unlike its bigger rivals focuses on redeveloping land that was previously used for industrial purposes, said it was on target to achieve its pre-tax earnings forecast for the year to April 30 of 525 million pounds ($691.6 million).

Analysts on average are expecting annual profit of 526.7 million pounds, according to LSEG data.

“Like the rest of the industry, the group is clearly evaluating the implications of the new government’s targets and policy initiatives,” Investec analyst Aynsley Lammin said in a note.

The company, which operates across London, Birmingham and the south of England, said pre-tax profits for the year are expected to be weighted towards the first half, and operating margin will be slightly ahead of its long-term range of 17.5% to 19.5% for the six-month period to October end.

In June Berkeley lifted its earnings outlook for 2025, the first FTSE 100 homebuilder to do so in more than two years.

British house prices rose last month at the fastest annual pace since late 2022, data from mortgage lender Halifax showed, adding to signs of renewed momentum in the property market.

Berkeley’s FTSE 100 rival Barratt said this week the recovery in the UK housing market is in its “early days” and that it doesn’t see profit growth until fiscal 2026.

Vistry, the country’s top builder by output, posted a 7% rise in half-year earnings, helped by resilient demand for its affordable homes.

($1 = 0.7591 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhaniwala and Jan Harvey)