The Berkeley Group H2 2026 Earnings Report

The Berkeley Group EPS Results

• Actual EPS: GBX 331.60
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

The Berkeley Group Revenue Results

• Actual Revenue: $2.38 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

The Berkeley Group Announcement Details

• Quarter: H2 2026
• Date: 6/24/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, June 24, 2026
• Conference Call Time: 6:00AM ET

At Berkeley Group we build homes and neighbourhoods across London, Birmingham and the South of England. Our passion and purpose is to build quality homes, strengthen communities and make a positive difference to people’s lives. We use our sustained commercial success to make valuable and enduring contributions that benefit all our stakeholders. We specialise in brownfield regeneration, working closely with local communities and councils to revive underused land and create homes where they are needed most. We believe that reviving brownfield land is the most sustainable way to solve the housing crisis, strengthen left behind places and breathe new life into our towns and cities. We are the only major UK homebuilder to focus on brownfield land, as we transform 32 of the country’s most challenging large scale sites. Every neighbourhood we create is uniquely designed alongside our local partners and built with great care and attention to detail. From beautifully crafted private and affordable homes to schools, nurseries, shops and parks, we create places where people of all ages and backgrounds can live comfortably together and enjoy a great quality of life. We run a sustainable and responsible FTSE 100 business, with industry leading commitments to climate action, nature recovery, community development, social mobility, build quality and customer service. We invest for the long term and deliver our commitments through all challenges and conditions. Key facts: - We were proud to be named Britain's Most Admired Company for 2024, topping the rankings among over 230 FTSE-listed firms across 27 industry sectors. - We deliver sustainable brownfield development, with 92% of the homes built in FY25 on regenerated brownfield land. - Our customers are happy as demonstrated by our Net Promoter Score (NPS) of +81.6 from our customers, compared to an industry average of +59 (Home Builders Federation (HBF), March 2025).

The Berkeley Group H2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Berkeley delivered in-line FY2026 results, with pre-tax profit of GBP 451 million and net asset value per share up 9% to GBP 39.17, while maintaining a strong balance sheet and GBP 363 million of net cash.
• Negative Sentiment: Sales conditions were soft as transactions were hurt by Budget-related uncertainty, geopolitical tension, and cautious buyers, leaving sales about 15% below recent run-rate levels.
• Neutral Sentiment: Management is prioritizing cash generation and capital discipline over short-term profit, with no current investment in new land sites and a focus on optimizing existing holdings, controlling WIP, and supporting share buybacks.
• Positive Sentiment: Planning progress added significant land value, including new consents and master plans at several sites, with about GBP 300 million of value added to gross profit from land holdings during the year.
• Positive Sentiment: Berkeley Living is scaling up successfully, with early lettings ahead of expectations, rents above forecast, and six developments expected to be income stabilized by FY2028 for an initial portfolio of 1,122 homes.

Presentation

[Rob Perrins, Executive Chair at The Berkeley Group]

Good morning, ladies and gentlemen, and welcome to The Berkeley Group Results Presentation for the Year Ended 30th April 2026. I am Rob Perrins, I am joined today by Richard Stearn, our CEO, and Neil Eady, our CFO. Berkeley has performed in line with guidance for the year and grown net asset value per share by 9% to GBP 39.17. The operating environment is very uncertain, this is across the board, from the Iran conflict, the U.K. political position, the economic outlook, the planning tax and regulatory environment, and fast moving technological change. Berkeley is operating in the best city in the world and has wonderful land holdings. Our focus is to run the business for the long term, underpinned by financial strength.

[Rob Perrins, Executive Chair at The Berkeley Group]

In this environment, we will be agile in our approach, matching production to demand, being efficient in our operations, enhancing our land holdings, and investing in Berkeley Living. We will prioritize cash generation ahead of short term profit targets and only invest in new land opportunities where we can make our required rate of return. We need government to address the ongoing delays in the planning system, allow home builders to make a return in line with the level of risk, and reduce stamp duty for new build to stimulate demand and growth. By operating with agility, focusing on cash generation and adding value to our land holdings, we can continue our program of shareholder returns and maximizing long term shareholder value.

[Rob Perrins, Executive Chair at The Berkeley Group]

I will now hand over to Richard Stearn, our CEO.

[Richard Stearn, CEO at The Berkeley Group]

Thank you Rob, good morning, ladies and gentlemen. I will cover the following key areas today. First, I'll start with the resilient results delivered for the year before looking at our operational performance in what remains a volatile, complex and challenging environment. This will include a closer look at planning and finish with a summary of the areas where strong political leadership can deliver real change. I will look at how we are implementing our strategy against this backdrop and which levers we are prioritizing over the coming period. Before concluding with our guidance, I will provide an update on Berkeley Living as we move into its operational phase.

[Richard Stearn, CEO at The Berkeley Group]

Berkeley has delivered a resilient set of results for the year. Pre-tax profit is GBP 451 million, in line with guidance first provided two years ago. We closed the period with net cash of GBP 363 million after returning GBP 233 million to shareholders through share buybacks, paying GBP 250 million of land creditors and investing in Berkeley Living. Net asset value per share has increased by 9% to GBP 39.17. We have provided over GBP 500 million of subsidies to deliver affordable housing and community infrastructure, and our Net Promoter Score remains industry leading at 77.9. This performance reflects the focused execution of our strategy, disciplined cost control, and our agile response to extremely challenging macroeconomic and regulatory conditions.

[Richard Stearn, CEO at The Berkeley Group]

As I have said, the operating environment remains volatile, complex and challenging. Beginning with sales, it has been a deeply frustrating year. We began our financial year with a stable market, from the end of August until the new year, transactions were adversely impacted by the pre-Budget speculation over the potential for property and wealth taxes. The new year began with a degree of optimism and widespread anticipation of interest rate cuts and gradual economic recovery. However, the market was brought back down to earth by the economic ramifications of the conflict in the Middle East.

[Richard Stearn, CEO at The Berkeley Group]

Broadly speaking, the year saw six months of stability and six months of caution and concern, resulting in a lack of urgency and buyers standing off. Overall, this meant that sales were around 15% down on the run rate of recent years. I say it is frustrating because there is no shortage of interest. Buyers are just reluctant to commit. What we are seeing is customers with a need or strong liquidity buying close to completion, with greater caution from customers buying two or three years off plan. The last 10 years have seen real wage growth and high savings ratios, while property prices in London have barely moved.

[Richard Stearn, CEO at The Berkeley Group]

London remains a global powerhouse city with a resilient and adaptive economy. It attracts international capital, talent and business which supports a sustained housing demand. The market is there. It just needs incentive to commit, which requires stability, a return to falling interest rates and improvement in sentiment. On the right-hand side of this slide, I have included the new starts graph showing the structural undersupply in London, which further underpins the outlook. Moving on to build costs. These have remained flat during the year, with a competitive tendering environment offsetting inflationary pressures and also reflecting the long-term nature of our procurement. We are conscious of the potential second and third line impacts of the Iran conflict, and to the extent these do arise, we will seek to absorb them through optimization of our land holdings.

[Richard Stearn, CEO at The Berkeley Group]

In terms of the BSR, this system is improving but not consistently enough. We have a negligible Gateway 2 exposure in our four-year plan, but remain concerned about the implementation of the Gateway 3 process. Moving now to plan. On the one hand, government has done an excellent job in restoring the fundamentals of housing policy. However, it has still not fully recognized the extent to which the economic and regulatory environment has moved over the last 10 years or so, and the impact of this on development viability. The Homes for London package is a big step forward, but needs to be implemented constructively and with urgency. As we said in the preliminary announcement this morning, it is taking more than 50% longer to deliver an apartment building in London than it did 10 years ago.

[Richard Stearn, CEO at The Berkeley Group]

Looking at the year as a whole, we have made good progress on a number of sites. This includes new master plans at the Green Quarter and Woodberry Down, first planning consents at Borough Triangle, Hemel Hempstead and Brighton, the latter at appeal. Around 40 revisions to existing consents, including at Twelvetrees Park, White City, Bow Green, London Dock, Heron Wharf in Poplar, Lillibrooke in Maidenhead, and the Horlicks Quarter in Slough. These have all contributed to positive momentum in our land holdings, which have seen around GBP 300 million of value added to gross profit in the year. We were also successful with our appeal at Camden. That is the good news. At both Beckton and Motspur Park, local refusals have required GLA call-ins. Both applications carried officers' recommendations for approval. Most recently, our scheme for 850 new homes at the Aylesham Shopping Centre in Peckham was refused at appeal on the grounds of harm it would cause to the Peckham Rye conservation area.

[Richard Stearn, CEO at The Berkeley Group]

A rundown shopping center taking precedence over badly needed new homes on a site allocated for residential development. The decision was greeted with widespread consternation and starkly demonstrates the challenges that persist in the system. On this slide, I have set out the actions we are advocating to address the decline in new home starts in London and reinvigorate economic growth in the capital. I will not take you through each of these as Rob alluded to the key points a few moments ago. It is about pace, allowing appropriate returns to be made, and reducing taxes that deter investment. Moving now to strategic delivery. Introduced 18 months ago, Berkeley 2035 provides an agile framework for The Berkeley Group to allocate capital against a number of strategic levers and also manage the business through periods of volatility.

[Richard Stearn, CEO at The Berkeley Group]

Those levers are land investment and optimization, investment in construction work in progress in the core business, investment and growth in the Berkeley Living BTR platform, and shareholder returns. Against the backdrop of a delayed inflection in the market and regulatory environment, we've been taking appropriate actions to protect the business over recent periods. Number one amongst these is maintaining a strong balance sheet. We have maintained cash above GBP 300 million throughout, in spite of reducing land creditors by over GBP 400 million. We have limited land acquisition to three sites funded by non-core disposals. We have reduced operating costs by 25% in real terms over a three-year period, and we have invested GBP 300 million in an income generating BTR platform. Importantly, through careful capital allocation, we have also been able to make GBP 372 million of shareholder returns through share buybacks over the last 18 months.

[Richard Stearn, CEO at The Berkeley Group]

Looking forward, as we set out in our 1st of April strategy update, our strategic priorities are clear, with a continued focus on cash generation. We are not investing in new sites at present. Instead, our focus is on adding value to our existing holdings to restore and enhance margin. We have added some GBP 300 million in the last year. We are being very disciplined in matching investment and work in progress to demand. We continue to invest in Berkeley Living, which I will talk more on shortly, but we'll keep the pace of the investment under review, just as we are with the core business. We remain very focused on quality of profit. Finally, we continue to see share buybacks as a value enhancing use of capital in this environment.

[Richard Stearn, CEO at The Berkeley Group]

Moving on to our BTR platform. Berkeley Living continues to move at pace. We welcomed our first residents at Foundry Yard in Alexandra Gate in April, and in June at Navigator Place in Kidbrooke Village. We are leasing up at very encouraging rates and now have over 120 lettings agreed, with rents ahead of our expectations. We are getting a good understanding of the demographic that is renting from Berkeley Living. 80% are between the ages of 18 to 39, and the average gross household income is over GBP 100,000. At these levels, rent as a proportion of income is well below the national average, which is encouraging from an affordability perspective. Our first residents will move into The Watermint building at Silkstream in Hendon shortly, and the Horlicks Quarter will also take its first residents later this summer.

[Richard Stearn, CEO at The Berkeley Group]

Leasing at Grand Union and Eden Grove will begin later this year. We anticipate having income stabilized at all six developments by the end of FY 2028, an initial portfolio of 1,122 homes. I have included a number of BTR slides in the appendices that look at the overall market and provide a reminder of how Berkeley is capturing full value from these sites through Berkeley Living. Finally, this slide summarizes our guidance. As set out on the 1st of April, we are targeting GBP 1.4 billion of pre-tax profit over the next four years. Our long-term operating margin range is 17.5%-19.5%, and we will continue to focus on quality of profit. We have set the objective of returning ROCE in the core business to above 15% as soon as possible.

[Richard Stearn, CEO at The Berkeley Group]

We are, however, operating in a highly complex and rapidly changing environment and will always run Berkeley for the long term. While the current level of geopolitical and macroeconomic volatility persists, we will remain agile, matching supply to demand and tightly controlling costs. Our primary focus will be on cash generation over short-term profits, providing the opportunity for increased shareholder returns. Thank you.

[Richard Stearn, CEO at The Berkeley Group]

I will now hand over to Neil, who will take you through the numbers in more detail.

[Neil Eady, CFO at The Berkeley Group]

Thank you, Richard. Good morning, everyone. I am Neil Eady, The Berkeley Group Chief Financial Officer. This morning, I will take you through the results, beginning with a summary of overall performance, then drilling down on the income statement, cash flow, and balance sheet. Let's start with a summary of performance for the year. We have delivered GBP 451 million of pre-tax profit in line with our guidance at the start of the year. Earnings per share have decreased by 10.8% to GBP 3.32, reflecting lower profit, partially offset by share buybacks. Operating margin is 18.7%, slightly lower than the prior year. Pre-tax return on equity is 12.5%, with return on capital employed of 13.8%. Looking at the financial position of the group. Net assets are up marginally at GBP 3.6 billion.

[Neil Eady, CFO at The Berkeley Group]

The increase of GBP 80 million in the year principally reflects that the profit after tax of GBP 318 million exceeds shareholder returns of GBP 233 million, which I will come back to later. Net cash remains healthy at GBP 363 million, with overall liquidity at the year end therefore in excess of GBP 1.5 billion. Net asset value per share has increased by 9% to GBP 39.17 as a consequence of the net asset movement just mentioned, and most significantly, the acquisition of 6.3 million shares. This slide sets out some of our key operational metrics. First, we have cash due on forward sales of GBP 1 billion, a decrease from prior year due to reduced reservation rates. This provides visibility on contracted near-term earnings and cash flow with over 70% of sales for FY 2027 already exchanged.

[Neil Eady, CFO at The Berkeley Group]

As a reminder, this figure represents the cash still to collect on our exchanged private sales only. It's therefore a cash, not a revenue figure, and excludes exchange deposits, affordable homes, and commercial property. Our customer deposit strategy remains 20% for forward sales. The second important metric on this slide is the estimated future gross margin in our land holdings, which is reduced by GBP 280 million to GBP 6.4 billion from 52,763 plots. I will look at this in more detail later. Turning now to the income statement and comparing this to the previous year. Revenue has decreased by 4% to GBP 2.4 billion, mainly due to a lower average selling price, which reflects the mix of properties delivered, both tenure and location rather than underlying sales price movements. Gross profit is GBP 597 million, representing a gross margin of 25.1%, slightly behind last year. Again, the reduction is driven by delivery mix.

[Neil Eady, CFO at The Berkeley Group]

Operating expenses have decreased by 6% to GBP 150 million, despite what remains an inflationary environment as we continue to focus on efficiency and exert close control on all areas of cost. Operating margin is 18.7%, which moderated from the half year to a level in line with our long-term range of 17.5%-19.5%. Our net finance income is GBP 2 million compared to GBP 14 million in the prior year, with interest earned on gross cash falling principally as a result of lower interest rates. With St Edward now delivering out of London sites only, our share of joint venture profits are GBP 3 million and will remain at this more modest level over the guidance period. The effective tax rate for the year was 29.5% and fully reflects both the corporation tax rate of 25% and the 4% residential property development tax.

[Neil Eady, CFO at The Berkeley Group]

Overall, we delivered 4,076 homes at an average selling price of GBP 546,000 in the year, compared to 4,047 homes at an average selling price of GBP 593,000 last year. In FY 2027, volumes will be lower, but pricing will be back up to around FY 2025 levels. It is clearly difficult to be more specific in these markets, and as we've said many times, we will always prioritize cash flow and quality of profit ahead of annual profit targets. Moving to the cash flow. This slide sets out the key movements for the year, which resulted in an increase in net cash of GBP 26 million to GBP 363 million. GBP 451 million has been generated from pre-tax profits, of which GBP 164 million has been absorbed by a net increase in working capital investment. I will run through the key movements within working capital shortly.

[Neil Eady, CFO at The Berkeley Group]

The other significant items are the GBP 40 million distribution from St Edward joint venture, the GBP 233 million of shareholder returns through share buybacks, and the repayment of the Homes England loan of GBP 17.9 million in the year. Berkeley has delivered GBP 372 million of the GBP 2 billion shareholder returns under Berkeley 2035 between the 1st of December 2024 and the 30th of April 2026, including GBP 233 million of share buybacks this year, equating to 6.2% of the share capital. This completes the GBP 260 million target to the 30th of September 2025 and contributes GBP 112 million to the next target of GBP 640 million by the 30th of September 2030, which we are currently comfortably on target to meet. I will not go through each line on this balance sheet slide as I will run through the three key numbers, inventories, investment properties, and creditors over the next three slides.

[Neil Eady, CFO at The Berkeley Group]

Drilling down into inventory. This slide sets out the GBP 309 million net decrease in inventories in more detail. Land and work in progress has decreased by GBP 303 million, of which GBP 82 million relates to transferring two additional BTR assets into investment property in the year. Within this balance, the overall land cost has decreased by GBP 64 million. Land not under development has risen by GBP 9 million, following the completion of the acquisition of a site in Hersham, Surrey, in the first half of the year. Build WIP has reduced materially as we continue to match production to demand, as set out by Richard in these prevailing market conditions. Completed stock reduced by GBP 6 million in the year to GBP 332 million. This is spread across a number of sites providing immediately available product for prospective purchasers.

[Neil Eady, CFO at The Berkeley Group]

Moving to investment property. Investment property at GBP 297 million reflects our investment to date on the first six BTR assets, two of which were transferred to the BTR platform in the first half of the year for GBP 82 million. Additional total capital expenditure of GBP 69 million was spent on the six assets in the year. As at the 30th of April 2026, two of the assets, Foundry Yard, Alexandra Gate, and Navigator Place at Kidbrooke Village, were completed, with Foundry Yard welcoming its first residents in April 2026 and Foundry Yard in June 2026. As previously explained, we have adopted the cost option within IAS 40 and so will not revalue these assets in the balance sheet, but will provide information on market value at the balance sheet date as the portfolio matures.

[Neil Eady, CFO at The Berkeley Group]

As at the 30th of April 2026, the fair value of the two completed assets was internally valued at GBP 122 million, assuming they are sold within their SPVs. For investment still under development, the fair value approximates cost. Turning to creditors. Creditors have decreased by GBP 291 million in the year. The first significant movement is the net GBP 228 million reduction in land creditors, with GBP 253 million settled in the year. Second, there has been a decrease of GBP 72 million in customer deposits, driven by the difference between current sales rates and the amount of revenue taken to the profit and loss account. The slide also sets out the future payment profile for the remaining GBP 486 million of land creditors. Scheduled land creditor payments in FY 2027 total GBP 114 million, with a slightly lower annual profile thereafter.

[Neil Eady, CFO at The Berkeley Group]

Provisions representing post-completion development obligations, including those relating to build fire safety matters, have decreased slightly by GBP 3 million in the year. This slide summarizes our land holdings. Estimated future gross margin is GBP 6.4 billion across 52,763 homes across 59 developments, down from GBP 6.7 billion and 52,714 at the 30th of April 2025. Through replanning activity, Berkeley has replaced GBP 300 million of the GBP 600 million gross profit recorded through the income statement in the year. New planning consents were secured at three sites, Borough Triangle at around 890 homes and the former Brighton Gas Works site of circa 480 homes after an appeal. The third site at Hemel Hempstead moved from the pipeline into land holdings following receipt of planning consent to 485 homes.

[Neil Eady, CFO at The Berkeley Group]

Berkeley also secured new master plan consents at the Green Quarter in Ealing, now 8,000 homes, and an additional 800 homes across the Woodberry Down master plan in Hackney. The pipeline now comprises approximately 11,000 homes. In terms of our financing, at the year end, the group maintained its borrowing capacity of GBP 1.2 billion, comprising of GBP 400 million of 2031 dated green bonds with a 2.5% coupon and a GBP 800 million banking facility consisting of a GBP 260 million drawn green term loan and a GBP 540 million undrawn revolving credit facility. Taken with our net cash of GBP 363 million, Berkeley had available liquidity of over GBP 1.5 billion. Since the year end, we have successfully refinanced the group's bank facility with the same six banks at a lower margin and with GBP 200 million of additional capacity for five years with two one-year extensions.

[Neil Eady, CFO at The Berkeley Group]

Thank you very much. This concludes today's results presentation.

Participants

Executives

• Neil Eady, CFO
• Richard Stearn, CEO
• Rob Perrins, Executive Chair