However, in a trading update for the period from May 1 to August 31, the firm revealed that it is set to meet profit guidance for its financial year thanks to a resilient housing market.
The housebuilder, which delivers homes in London, Birmingham and the south of England, said that outside of the capital underlying reservations for the current stage of the financial year were in line with those in the two years before the pandemic, Berkeley said. It noted that sales prices were offsetting the price hikes seen with building materials.
Berkeley explained that it remains affected by escalating build costs during the reported period, adding it was “mindful” of continuing issues within the supply chain and labour market, caused by Covid-19 and Brexit.
With the more favourable housing market conditions, Berkeley said it was still set to deliver a pre-tax profit for the year at or above the £518 million that it reported for its year ending April 30 2021.
Berkeley’s statement read: “We anticipate profit to be weighted more to the first half of this financial year and forward sales to be around the year-end level of £1.7 billion at the half-year; the final figure will depend upon the number of completions achieved between now and 31 October, as well as the level of reservations over this period."
The company began its fiscal year with net cash of £1.1 billion, with the business continuing to invest in its land holdings “selectively”. Berkeley will issue its B Shares on September 6 in accordance with its B Share Scheme.
- Avant Homes registered a pre-tax loss of £3 million for its year ending April 30 2021, after incurring a £10.4 million exceptional expense from its sale to developer Berkeley DeVeer earlier this year.
The housebuilder stated that the exceptional item involved the sell-side costs associated with the acquisition of the Avant Homes Group by Berkeley DeVeer and Elliott Advisors. The pre-tax loss is an improvement on the loss of £17.2 million in 2020 as a result of the pandemic.
At the same time, in the year to April 2021, the business achieved a post-tax profit of £6 million due to a tax credit of £9 million.
During the period, Avant achieved 1,921 legal completions against 2020’s 1,759. The private average selling price rose 5.9% to £287,000. Revenue was £505 million, up from 2020’s £446 million.
