Berkeley raises profit outlook as sales hit pre-pandemic levels

(Reuters) -Berkeley Group raised its annual profit outlook on Wednesday, after sales recovered to pre-pandemic levels on strong demand in an under-supplied UK housing market that helped the high-end British homebuilder post higher interim profit.

Berkeley, which operates mainly in London, Birmingham and the South of England, said it has increased its earnings outlook for the current fiscal year by 5%, and anticipates 5% annual profit growth for the next three years.

Cheap mortgages have underpinned the UK housing sector after a tax holiday introduced to prop up purchases was phased out in September, while robust house prices have helped the builders tackle cost pressures from supply chain disruptions, fuelled partly by Brexit and the COVID-19 pandemic.

“We have continued to deliver … progressing construction across our portfolio of 64 live projects. These include 30 long-term, highly complex regeneration sites, of which 25 are now in delivery,” said Chief Executive Officer Rob Perrins.

Cobham-headquartered Berkeley, which in September had warned of construction cost inflation and supply chain woes, said it continues to have sufficient labour, with overall sales prices offsetting the hit from higher costs.

Pre-tax profit for the six months ended Oct. 31 stood at 290.7 million pounds ($385.06 million), compared with 230.8 million pounds a year earlier.

Top three British homebuilders Barratt Developments, Persimmon and Taylor Wimpey have all forecast strong demand in spite of persistent supply chain woes.

($1 = 0.7549 pounds)

(Reporting by Pushkala Aripaka and Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips)