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(Sharecast News) - Berkeley Group reported a drop in full-year profit that met its guidance on Wednesday as it called for "strong political leadership" on housebuilding and warned that London was on track to miss targets.
In the year to the end of April, pre-tax profit fell 14.7% to 451.4m, in line with Berkeley's guidance of 450m, with revenue down 4.2% at 2.4bn.
The company called it a "resilient operating performance in a volatile environment".
Berkeley said 4,076 new homes were completed across London and the South East, up from 4,047 a year earlier, although the average selling price dipped to 546,000 from 593,000. Cash due on forward sales fell to 1bn from 1.4bn.
Net cash came in at 363m, up from 337m in 2025 and well ahead of the company's guidance for 300m.
Berkeley said the current high tax and regulatory burden meant London was building less than 10% of the homes it needs. It also pointed out that it now takes at least eight years to complete an apartment building in the capital from the point of acquisition, versus five years ten years ago.
Executive chair Rob Perrins said: "Every part of the system needs to work to reduce the time taken to get buildings into development and allow homebuilders to make a return commensurate with the risk that can attract the necessary investment capital. Currently more homes are being lost to other uses than being built. This can be addressed with the necessary policy changes and strong political leadership."
He said Stamp Duty Land Tax should be reduced on all new homes to a maximum of 3% - zero for first-time-buyers - and the surcharges that deter the vital investment in new build homes "so damagingly" should be removed.
"These changes will be fiscally neutral or better due to the considerable increase in tax revenues generated from greater transactional activity and by stimulating additional homebuilding which drives corporation tax (which is 29% on all residential property developers' profits) and payroll taxes (direct and throughout the supply chain)," Perrins said.
At 0950 BST, the shares were up 4.9% at 3,614.89p.
Dan Coatsworth, head of markets at AJ Bell, said: "Berkeley had already got the bad news out of the way in the run-up to its full-year results, so it was not a surprise to see investors react with relief on publication of the numbers.
"In April the foundations of the share price were rocked as Berkeley downgraded guidance and announced a halt to land buying, in what felt like a particularly gloomy assessment of the immediate prospects, both for itself and for the wider sector. It was significant as Berkeley is known for its ability to successfully call the ups and downs of the property market.
"Today's announcement reveals the situation has not got dramatically worse. Cash was higher than expected, giving Berkeley a buffer to ride out any turbulence. The promise of share buybacks to help take advantage of any discount between the share price and the value of its assets was well received.
"While the backdrop is bleak, Berkeley is as well placed as any of its peer group to come out the other side of a difficult period in decent shape."
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