Berkeley Boosts Dividend Program as Home Sales Remain Strongby
Berkeley Group Holdings Plc, London’s biggest homebuilder, boosted its dividend program by 500 million pounds ($755 million) after its adjusted profit before tax rose. The shares jumped.
The dividends to be paid by 2021 rose to 16.34 pounds a share from 13 pounds because of the cash being generated from sales before completion and land, Berkeley said in a statement on Friday. The Cobham, England-based company will pay an interim dividend of 100 pence a share, beating analyst estimates of 72 pence.
“It’s not us calling the top of the market,” Chief Executive Officer Rob Perrins said in an interview. “The plan is to still to invest in the business. After what we think we need for investment, this is the dividend we can make.”
Demand remains strong in London because of a shortage of homes and market conditions are stable, Berkeley said. Sales values gained in line with the wider market and matched cost increases, according to the statement. The average sale price of a home in London and the South of England fell to 506,000 pounds from 649,000 pounds a year earlier because the type of properties sold differed.
Berkeley rose as much as 7.4 percent to 3,600 pence in London trading, the highest since 1989. It was the second-biggest gainer in the Stoxx Europe 600 Index.
Profit before tax and after one-time items rose 10 percent to 242.3 million pounds. Net cash fell to 263.1 million pounds from 430.9 million pounds at the end of April.
Berkeley has been chosen as the Greater London Authority’s preferred bidder for a 27-acre site adjacent to West Ham subway station in east London, the company said.