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Berkeley profits dip 12pc despite sales increase

Profits at house builder Berkeley dipped 12 per cent over the past six months despite a £11 million increase in revenue.

Berkeley saw its pre-tax profits drop 12.1 per cent to £79.6 million for the six months to 31 October, from £90.6 million for the same period a year earlier.

The fall was driven by the fact that sales volumes are 55 per cent below the “historical average” but Berkeley was able to avoid costly land bank writedowns.

Unlike some rivals struggling to renegotiate bank loans or who have had to sell assets to pay down debt, Berkley said it had a net cash position of £138.2 million at the end of October compared with net debt of £4.5 million in April.

Managing director Tony Pidgley said: "Berkeley has always planned for a cyclical market and, with its strong ungeared balance sheet, is well placed to take advantage of the opportunities that will be presented in the future.”

During the period, revenue for the group was higher than the same time last year, up to £452.6 million from £441.4 million.

This was due to sales of 968 units with an average selling price of £399,000, which compared with selling 1,630 units at an average price of £245,000 last year.

However, despite the group’s strong balance sheet, Mr Pidgley said: “Right now, there is an unprecedented level of uncertainty in the market place, much of which is out of our control and we await the benefit to come through from the recent reductions in interest rates, Government support of the banking sector and other stimuli to the economy.”