Berkeley Group Shares Dip Despite Reaffirming Profit Guidance

Berkeley Group (LON: BKG) saw its shares decline by 2.6% today, despite the company reaffirming its pre-tax profit guidance of £450 million for the current fiscal year (FY26) and a similar level for FY27.

The trading update, covering the period from November 1, 2025, to February 28, 2026, highlighted a market grappling with geopolitical and macroeconomic uncertainties.

Berkeley is maintaining its target for a strong net cash position of around £300 million. This reflects the settlement of over £250 million of land creditors and shareholder returns of around £190 million in the year to date, along with investment into Berkeley Living’s Build-to-Rent (BTR) platform.

The actual year-end financial position will depend on the pace of future share buy-backs, new land investments, and the timing of legal completions.

Despite the reaffirmed guidance, the company acknowledged the challenging trading environment. Sales enquiries have remained positive, with underlying reservations recovering towards summer levels before the pre-Budget period.

However, the situation in the Middle East is affecting risk sentiment, and Berkeley awaits its potential market impact. The report also highlights the risk of further deterioration in macroeconomic conditions, with the potential for higher inflation and sustained high-interest rates.

Since its interim results, Berkeley has returned £59 million via share buy-backs, bringing the year-to-date total to £191 million. Total shareholder returns since the launch of the Berkeley 2035 strategy in December 2024 have reached £330 million, exceeding the planned amount. This underscores Berkeley’s commitment to returning value to its shareholders.

Looking ahead, Berkeley will concentrate on cash generation to maintain a strong balance sheet, the quality of profit in the core business, and shareholder returns. The company aims to optimize its land holdings and continue developing its BTR strategy.

Berkeley acknowledged the positive aspects of London as a global city. The company stated that London offers security, heritage, and innovation within a favorable time zone and language. For customers with liquidity, the present market dislocation presents a valuable buying opportunity.

Berkeley is actively addressing the challenges it faces by reviewing planning consents to enhance and restore margins to appropriate levels for production.

The company has expressed its support for the collaborative approach taken by MHCLG and the GLA in developing the ‘Homes for London’ package, which aims to tackle the viability challenges in today’s housing market. Berkeley intends to apply the principles of this package to provide certainty on its long-term London sites.

The company voiced concerns over the slow implementation of the BSR, which has significantly impacted the supply of new homes in London and other urban areas. Berkeley supports the government’s goal of transforming the BSR into an enabling regulator.

While progress has been made in the past six months, the company believes that approvals within the prescribed timeframe need to become the norm rather than the exception.