YEAR END RESULTS ANNOUNCEMENT
The Berkeley Group Holdings plc (“Berkeley”) today announces its audited results for the year ended 30 April 2021.
Berkeley is the country's leading place-maker, operating principally in London, Birmingham and the South East. We are a proud UK business specialising in the creation of beautiful, successful and sustainable places where communities thrive and people of all ages and backgrounds enjoy a great quality of life.
Rob Perrins, Chief Executive, said:
“Today's strong results reflect the consistent and focused application of Berkeley's uniquely long-term business model, the quality of the homes and places we create and our proficiency in adapting to the challenges of the pandemic, sustaining production throughout. In this environment, we have delivered results for this year and last in line with guidance at the start of the two year period (which was before the pandemic), maintained our annual £281 million shareholder return and added ten new sites, with the capacity to deliver 6,650 new homes, to our land holdings.
Safety has been our first priority over the last year, and I want to register my appreciation and admiration for our highly skilled people and partners for their diligence, ingenuity and expertise in managing such complex changes and implementing best practice Covid-secure protocols across our construction, sales and office settings. This period has shown the Berkeley culture at its very best; helping ensure that throughout the pandemic we have met our commitments to our customers and local communities, without recourse to taxpayer support.
We ended the year in great shape, with net cash of £1.1 billion, cash due on forward sales of £1.7 billion and the estimated future gross margin in our land holdings increased to £6.9 billion, with a further £0.6 billion in the near-term pipeline.
This is a very strong platform from which to continue serving the most under supplied housing markets in the country once the disruption caused by the pandemic dissipates and London is again able to flourish as a global destination for culture, entertainment, education, recreation and business. London is one of the world's greatest open and welcoming cities and it has been wonderful to witness its vibrancy returning over recent weeks, with the gradual lifting of restrictions. People thrive on its energy, opportunity and unparalleled attributes.
Looking to the future, we launched an ambitious new ten-year vision “Our Vision 2030: Transforming Tomorrow”. This maintains Berkeley's leadership position in sustainability, providing a framework for the business that recognises both the complexity of what we do – transforming highly complex brownfield sites into flourishing, sustainable, connected and nature-rich communities – and the opportunity this presents to make a positive and lasting contribution to the economy, society and the natural world. This includes new science-based targets for climate change, which ensure Berkeley is aligned to the international effort to limit global warming to 1.5°C above pre-industrial levels. As part of our commitment to net biodiversity gain, we are now creating over 480 acres of natural habitats; an area the size of London's Hyde Park.
Berkeley's unrivalled land holdings now have capacity to deliver over 63,000 homes, of which over 70% are on our 29 large complex regeneration sites. 23 of these are now in production, underpinning the business plan for the next ten years. The next three years will see further investment in work in progress as more of these sites approach the point of delivery and we now have over 11,000 people working on our construction sites, more than prior to the pandemic, supporting Berkeley's planned 50% increase in delivery over the business plan period.
This progress made in the last year and strong cash position provides Berkeley with a clear focus on increasing investment in its Group and joint venture land holdings, including further selective acquisitions. It also provides the visibility for Berkeley to announce a £450 million B share scheme, followed by a share consolidation, comprising £228 million of surplus capital and the remaining £222 million of scheduled annual shareholder returns for 2021/22, subject to approval by shareholders.”
SUMMARY OF EARNINGS, SHAREHOLDER RETURNS AND FINANCIAL POSITION
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Change |
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Earnings |
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30-Apr-21 |
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30-Apr-20 |
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per cent |
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Profit before tax |
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£518.1m |
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£503.7m |
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+2.9% |
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Earnings per share – basic |
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339.4p |
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324.9p |
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+4.5% |
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Pre-tax return on equity |
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16.5% |
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16.6% |
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-0.1% |
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Shareholder Returns |
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30-Apr-21 |
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30-Apr-20 |
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Share buy-backs undertaken |
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£188.6m |
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£130.5m |
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Dividends paid |
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£145.5m |
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£149.8m |
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Shareholder returns |
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£334.1m |
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£280.3m |
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Share buy-backs – volume |
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4.4m |
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3.5m |
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As at |
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As at |
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Change |
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Financial Position |
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30-Apr-21 |
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30-Apr-20 |
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absolute |
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Net cash |
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£1,128m |
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£1,139m |
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-£11m |
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Net asset value per share |
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£26.12 |
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£24.72 |
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+£1.40 |
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Cash due on forward sales (1) |
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£1,712m |
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£1,858m |
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-£146m |
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Land Holdings – future gross margin |
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£6,884m |
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£6,417m |
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+£467m |
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(1) Cash due on private exchanged forward sales completing within the next three years |
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INCREASING INVESTMENT AND DELIVERY
· Investment in Berkeley's unique operating model, delivering large, complex regeneration sites that few others have the requisite resources, expertise and risk appetite to undertake at scale. In the year:
o Ten new sites (four of which are in our St William JV) acquired covering over 6,650 homes; seven in London and three in the Home Counties.
o Four major new planning consents obtained on long-term regeneration developments; Malt Street, Southwark (1,350 homes), Silk Park, Barnet (1,300 homes), St Albans Road, Watford (1,200 homes) and Plumstead (1,750 homes); along with two new consents outside London.
o Six sites moved into production, including five long-term regeneration developments; TwelveTrees Park, West Ham (3,800 homes), St William's Poplar Riverside (2,800 homes), Silk Park, Hendon (1,300), Horlicks Quarter, Slough (1,300 homes) and Camden Goods Yard (700 homes).
·Berkeley now has 23 of its 29 long-term complex regeneration developments in production, supporting its anticipated 50% increase in housing delivery by 2024/25 from 2018/19 levels.
· In addition, Berkeley has some 7,000 plots on sites it is currently advancing that it anticipates will come into the land holdings during the next two years, giving good visibility on achieving the long-term ambition of increasing the estimated future gross profit in the land holdings to £7.5 billion.
DELIVERING FOR ALL STAKEHOLDERS
· 2,825 homes delivered (plus 429 in joint ventures) – Berkeley is delivering some 10% of London's new private and affordable homes – supporting approximately 28,000 UK jobs per annum directly and indirectly through its supply chain over the last five years.
·Over £200 million of subsidies provided to deliver affordable housing and committed to wider community and infrastructure benefits in the year.
· Maintained industry leading Net Promoter Score (+77.9) and customer satisfaction ratings.
· Recipient of coveted Diamond Award at RoSPA's 2020 Health & Safety Awards.
· Having been carbon neutral in our direct operations since 2017, we have set science-based targets committing Berkeley to reducing emissions from our direct operations by 50% by 2030 and reducing the carbon intensity of our homes by 40% by 2030, against our 2018/19 baseline.
· Berkeley is the only UK homebuilder rated “A” by CDP for its carbon climate action and transparency, and is AAA rated in the MSCI global index.
·Over 40 developments now have net biodiversity gain strategies. Kidbrooke Village, our first development to put our approach into practice, recently won the prestigious Sir David Attenborough Award for Enhancing Biodiversity and the overall President's Award at the Landscape Institute Awards 2020.
· £660,000 made available to support the Berkeley Foundation charity partners during COVID-19, in addition to ongoing funding of over £2 million in the year.
SHAREHOLDER RETURNS
·On track to deliver a pre-tax ROE of at least 15% on a cumulative basis from 1 May 2019 to 30 April 2025, which broadly equates to annual pre-tax profits of £500 million.
· Commitment to £281 million per annum Shareholder Returns up to 30 September 2025 re-affirmed.
·Proposal to return £228 million of £455 million surplus capital, along with scheduled returns for 2021/22, as part of a £450 million B share scheme, followed by a share consolidation, in September 2021, subject to approval by shareholders at the September AGM.
·Remaining £227 million of surplus capital retained for allocation to incremental land investment over the period to 30 April 2023.