Berkeley profits rocket but Pidgeley warns of stagnating construction sector.
Berkeley saw profits rocket by 58 per cent in the yer to 30 April 2012.
The house builder and developer - focused in London and the south east - saw revenue rise to £1.04 billion from £742.6m a year before, as pre-tax profit rose from £136.2m to £214.8m. It means the firm is on track to double profits earlier than expected.
Berkeley saw a £30.7 million exceptional profit from the disposal of 51 per cent interest in a student scheme at Clapham Junction in September 2011.
Berkeley said it is on track to return £1.7bn to its shareholders in by 2021, as it announced last year.
Chairman Tony Pidgley said: “This set of results demonstrates that we have embarked on this in the right way, delivering solid performance whilst remaining focused on the long-term success of the business.”
However, Mr Pidgley said – against a backdrop of a challenging economic outlook both in the UK and abroad – there are “numerous practical issues that have yet to be resolved” after the removal of the South East Plan, the introduction of the National Planning Policy Framework and the introduction of the Mayoral Community Infrastructure Levy alongside Section 106 contributions.
“These include the role that localism plays in development on a large scale and how to ensure that the delivery of new housing is commercially viable in an environment where planning authorities and government place ever increasing financial burdens on developers,” he said.
Mr Pidgley warned: “Unnecessary bureaucracy, over-zealous regulation and taxation policy, and a negative rhetoric that undermines confidence, create barriers to the delivery of new housing which will pose an unwelcome drag on growth.
“Indeed, there are indications across the wider industry that the recent upturn in construction levels is beginning to stagnate.”
The company has net debt of £57.9m (April 2011: net cash of £42m). Berkeley invested £311m in land in the year, acquiring a further 2,444 residential plots. It has 26,021 plots in land bank (April 2011: 27,026).
It said success is reliant on “keeping the business agile and flexible to act and react quickly it what it knows to be a cyclical property market”.