Berkeley Group Holdings Plc, the U.K.’s second-largest homebuilder by market value, said first-half profit rose 20 percent as the company sold more houses.
Net income climbed to 44.4 million pounds ($69 million) in the six months through October from 36.9 million pounds a year earlier, the Cobham, England-based company said in a statement today. Revenue increased 16 percent to 336.2 million pounds.
The homebuilder has benefited more than some competitors from an increase in demand for homes in the southeast of England, which started in April 2009, because of its focus on the area. Berkeley sold 1,249 homes in the first half compared with 914 a year earlier.
“We see an anemic recovery,” Managing Director Rob Perrins said in an interview. “Credit is constrained out there, especially for people getting mortgages. There is a lot of uncertainty.”
U.K. consumer confidence fell to a 19-month low in October as Britons faced the deepest budget cuts since World War II, Nationwide Building Society said on Nov. 12. House prices have fallen for five months in a row, according to Hometrack Ltd.
Berkeley rose 4.5 percent to 878 pence in London trading, its biggest gain since May. That boosted its market value to 1.15 billion pounds and extended its gain this year to 7.1 percent, making it the only U.K. homebuilder that has shown an increase. Redrow Plc, the next-best performing competitor, has lost 11 percent.
Sales reservations have risen by 20 percent compared with the last fiscal year, Perrins said. The operating margin of 17.4 percent that Berkeley achieved in the first half will probably be little changed in the second, he said.
“Good performance in the first half,” Peel Hunt analyst Robin Hardy said in a note to investors today. “The best news is that Berkeley is finally spending more money on land rather than hoarding cash.” Hardy has a “hold” rating on the stock and plans to raise his price estimate.
Berkeley bought 2,512 plots of land in the first half in sites including Westminster in London, the company said. The homebuilder had net cash of 252.7 million pounds at Oct. 31, down from 316.9 million pounds in April.