UK homebuilder Berkeley flags hits from new lockdown, Brexit as profit slides

Adds detail on results, outlook, background

Dec 4 (Reuters)Berkeley Group BKGH.L said on Friday the coming months would be crucial to gauge the impact of new COVID-19 lockdowns and Brexit, after posting a 16.6% fall in first-half profit as home sales were dented by the pandemic.

Berkeley, one of Britain’s biggest housebuilders by market value, said the number of homes sold during the period fell to 1,104 from 1,389 a year earlier, while the average selling price jumped 24% to 799,000 pounds.

British house prices rose by the most in nearly six years in November, mortgage lender Nationwide said on Tuesday, as a boom in the housing market accelerated while the broader economy struggled with the pandemic.

Housing market conditions are closely linked with consumer confidence, which has taken a hit since Britain decided to leave the European Union. The Brexit transition period is due to end this year, with the trade deal between the European Union and the UK hanging in the balance.

Berkeley said it was firmly on track to deliver its average annual pre-tax profit outlook of about 500 million pounds this fiscal year as pent-up demand and tax cuts for home buyers spurred demand.

Forward sales increased to 1.94 billion pounds at Oct. 31 from 1.86 billion pounds at April-end.

The company, which operates primarily in London, Birmingham and the South of England, said pretax profit fell to 230.8 million pounds ($310.45 million) for the six months ended Oct. 31 from 276.7 million pounds a year earlier.

($1 = 0.7434 pounds)

(Reporting by Yadarisa Shabong and Shanima A in Bengaluru; Editing by Ramakrishnan M.)

(([email protected]; Direct: +91 7760347399;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source Article