Berkeley Group Maintains Earnings Guidance Amid Housing Market Headwinds

Berkeley Group (LON:BKG) shares moved higher in early Friday trading after the company said it is holding its Annual General Meeting today, and provided a trading update for the period from May 1, 2025, to August 31, 2025.

The company revealed trading has remained stable, mirroring the pattern observed in the previous year. BKG shares are up around 1.7% so far in today's session.

Berkeley is on track to meet its pre-tax earnings guidance of £450 million for the full year ending April 30, 2026. Approximately 85% of this target is already secured through exchanged sales contracts.

The company also anticipates achieving a similar level of profit in FY27, with this guidance remaining unchanged from the year-end.

Pre-tax profits are expected to be evenly distributed between the first and second halves of the year, contingent on the timing of completions.

During the initial four months, Berkeley returned £121 million to shareholders by acquiring 3.25 million shares at an average price of £37.20 per share.

The company added that it has also completed its 2011 Shareholder Returns program and the initial £260 million of its £2.0 billion minimum shareholder returns target under the Berkeley 2035 strategy, launched in December 2024.

The next shareholder returns target is a further £640 million by September 30, 2030, to be delivered through a combination of share buy-backs and dividends, phased in line with Berkeley’s flexible capital allocation model.

Berkeley aims to maintain net cash of around £300 million by April 30, 2026. This target reflects shareholder returns to date, ongoing investment in its Build-to-Rent (BTR) platform, and anticipated land payments, including the scheduled settlement of £250 million of land creditors.

BKG noted that the net cash figure at the half-year may dip slightly below £300 million due to front-loaded shareholder returns in the first half, and is subject to the timing of completions.

Housing Market Challenges in London

Furthermore, Berkeley stated that while the Government's stance on planning reform is viewed positively by Berkeley, recent data indicate a continued decline in new housing starts in London, reaching levels not seen since the Global Financial Crisis.

The firm attributes the decline to regulatory, economic, and market factors.

Berkeley believes the Government is increasingly focused on addressing regulatory and viability challenges in London's housing industry.

The company remains confident that the challenges can be resolved through collaboration with the sector and a determined approach to driving necessary changes.

Berkeley also emphasized the need for deregulation and resolution of issues related to the Building Safety Regulator, while cautioning against increased taxation, such as changes to Landfill Tax or further property taxation, as these measures could deter investment.