Dec 10 (Reuters) - British homebuilder Berkeley said on Wednesday its longer-term outlook was more positive, particularly in London, despite staying cautious in the near-term after half-year profit
Berkeley Sees Positive London Market Despite Profit Decline
Dec 10 (Reuters) - Homebuilder Berkeley kept its annual guidance on Wednesday and voiced confidence in the long-term outlook for London, its key market, despite reporting a drop in half-year profit and deliveries in the run-up to last month's budget.
The London and South-East England-focused builder reported a 7.7% drop in pre-tax profit to 254 million pounds ($338 million) for the six months ended October 31 and delivered 2,022 homes at an average selling price of 570,000 pounds, both below year-ago levels.
Like other British homebuilders, Berkeley has said that uncertainty ahead of the annual budget and still relatively high borrowing costs have weighed on home sales in the past months.
Luxury home taxes introduced in the November budget are expected to pressure high-end builder Berkeley given its exposure to expensive homes in London, but analysts said resilient demand and new emergency measures to speed up home construction in London should support its longer-term outlook.
Executive Chair Rob Perrins said the speed and scope of those measures will be important, but the company voiced optimism about its overall prospects.
"While near-term sentiment remains cautious, the long-term outlook is more positive; particularly in London," Berkeley said, citing factors such as undersupply, falling interest rates, improved access to mortgages, and strong wage growth.
RETAINED OUTLOOK EASES INVESTOR ANXIETY
Shares in the FTSE 100 firm rose over 2% in early trade after Berkeley reaffirmed its pre-tax profit guidance of 450 million pounds for fiscal 2026, with a similar outcome in 2027.
"The unchanged guidance should be taken well, particularly given some investor anxiety ... that this may need to be revised down given the uncertainty heading into the budget," said analysts at JPMorgan.
Berkeley said its new build-to-rent platform, Berkeley Living, will launch in early 2026 with the first residents moving into its Alexandra Gate development in spring, helping diversify its revenue streams.
($1 = 0.7515 pounds)
(Reporting by Raechel Thankam Job in Bengaluru; Editing by Sumana Nandy, Eileen Soreng and Tomasz Janowski)
