Cobham's Berkeley Group reports profit of £604m in financial report
The Berkeley Group, a property development and house building company based in Cobham, has posted reports of encouraging growth for the year ended April 2023.
Profit before tax was up 9.5 per cent for the company, rising to £604 million this year. The company says that it has ''has maintained guidance of delivering at least £1.05 billion of pre-tax profit across its next two financial years''.
Despite these encouraging reports, the company's outlook remains uncertain due to a number of factors, one of which is increased mortgage rates making home-buyers more cautious.
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Manager of the 'Quality Shares Portfolio' at Wealth Club Claire Higgins said: "These are solid results from Berkeley in challenging circumstances with the group maintaining its profit guidance for the next two years. However, the near term outlook is highly uncertain.
In recent weeks we have seen a significant rise in mortgage rates and this has injected a further dose of caution amongst home buyers and property investors. This means Berkeley expects sales for the year ahead to be down around 20%.
As a result, Berkeley is battening down the hatches. It has taken its foot off the investment accelerator and will prioritise cash and margins. This, combined with a healthy forward order book and a strong balance sheet puts Berkeley in a good position to navigate these tougher times.
Historically, Berkeley has always emerged from downturns stronger. For now though, near-term prospects for Berkeley and its peers are murky at best. The recent increase in mortgage rates is far from helpful and with many home buyers still on cheap fixed rate deals, most of the pain has probably yet to be felt."
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