We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Berkeley Group Holdings (the) Plc | LSE:BKG | London | Ordinary Share | GB00BLJNXL82 | ORD 5.4141P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 50.00 | 0.96% | 5,240.00 | 5,230.00 | 5,240.00 | 5,240.00 | 5,155.00 | 5,195.00 | 1,618,474 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Operative Builders | 2.55B | 465.7M | 4.3893 | 11.93 | 5.55B |
From Jun 2019 to Jun 2024
TIDMBKG
RNS Number : 2026B
Berkeley Group Holdings (The) PLC
15 June 2016
PRESS RELEASE 15 JUNE 2016
THE BERKELEY GROUP HOLDINGS PLC
PRELIMINARY RESULTS ANNOUNCEMENT
Outstanding balance sheet strength - Cash due on forward sales of GBP3.25 billion, estimated future land bank gross margin of GBP6.1 billion and net cash of GBP107 million with NAVPS growth of 9.6% to 1,314 pence per share
On target to deliver pre-tax profits of GBP2.0 billion in aggregate over three years to 30 April 2018
further interim dividend of GBP1 per share to be paid in September 2016, bringing the total shareholder returns to GBP6.34 with the remaining GBP10 per share scheduled to be delivered evenly over the next five years
Over 13,800 people working across our sites, an increase of some 2,000, with over 1,000 in structured training or apprenticeships
The Berkeley Group Holdings plc ("Berkeley") today announces its unaudited preliminary results for the year ended 30 April 2016:
HIGHLIGHTS
Hot Features
Premium
Up 5.6% to GBP479.9 million (2015: GBP454.6
* Adjusted profit before tax * million)
GBP51.0 million of profit (2015: GBP85.1
* Ground rent portfolio sale million) from sale of ground rent portfolio
GBP530.9 million, down from GBP539.7
* Profit before tax million due to reduced ground rent sales
GBP107.4 million (April 2015: GBP430.9
* Net cash million) after dividend payments of
GBP259.5 million and investment in inventories
and joint ventures
Up 9.6% to 1,314 pence (April 2015:
* Net asset value per share 1,199 pence) following payment of GBP259.5
million (190 pence per share) dividend
Increased to GBP3.25 billion (April
* Forward sales 2015: GBP2.95 billion)
GBP6.1 billion of estimated future gross
* Land bank margin (April 2015: GBP5.3 billion)
across 42,858 plots (April 2015: 37,473
plots)
Robust underlying demand but uncertainty
* Market conditions impacting current transaction levels
with reservations over 5 months to May
2016 down 20%, on reduced new launches
in run-up to EU Referendum
Eight schemes started and twelve sites
* Continued investment acquired with inventories increasing
by GBP602 million to GBP3,256 million
and investment in JV's has increased
by GBP100 million to GBP150 million
* 'Adjusted' profit before tax excludes GBP51.0 million of profit (2015: GBP85.1 million) from the sale of ground rent assets.
CHAIRMAN'S STATEMENT
I am pleased to announce pre-tax profits for Berkeley of GBP530.9 million for the year ended 30 April 2016. Berkeley remains ungeared with net cash of GBP107.4 million, cash due over the next three years on forward sales of GBP3.25 billion and is maintaining its earnings guidance for the three years ending 30 April 2018.
Following the enhancements to Berkeley's dividend return plan announced in December 2015 which increased the target returns by 2021 to GBP16.34 per share, from GBP13.00 per share, the Board has declared a further interim dividend of GBP1 per share. This will be payable on 15 September 2016 to shareholders on the register on 12 August 2016.
The outcome of next week's referendum on Britain's membership of the European Union is significant for the UK's housebuilding and property sector. Berkeley supports a vote to remain in the EU. London's status as the world's best big city is underpinned by labour mobility, cultural diversity and a constant influx of talent and investment from around the world, and the UK economy in turn is powered by the success of our capital city.
However, London will always be a world city and a highly desirable place to live, work and play. For Berkeley, our brand, our land holdings and our forward sales will continue to differentiate and underpin our performance over the long term and, while we have a clear view about what the better outcome would be on Thursday 23 June, we are confident about the future for our business.
We are also encouraged by the priority accorded to housing by the new Mayor of London, Sadiq Khan. This issue has to become a political priority if we are to have any chance of delivering 50,000 new homes a year in London. His administration has already shown welcome signs of adopting an approach to delivery which is both ambitious and pragmatic.
In terms of housing policy, it is important that policies developed are consistent with the ambition of delivering more homes across all forms of tenure. This includes: ensuring Local Plans are in place across the country; finding the right framework for property taxation; and recognising the pressure that the conflicting demands of CIL, Section 106 and affordable housing place on the delivery of new homes. None of this is easy but if we get it right, it will have a profoundly positive impact on the future of London and the country as a whole.
I firmly believe that place-making is a force for good in the country - giving people a home, creating strong communities and generating jobs and growth - making our society better in many different ways. We are proud of the places we create at Berkeley and I would like to thank each and every one of our people for their dedication, enthusiasm and innovation which has made the last twelve months another successful year for Berkeley.
We live in exciting and fast moving times. There are always headwinds, although the strength of these ebb and flow. Berkeley operates the right business model and strategy for a cyclical market. In particular, our unique operating model of developing complex sites which others are not willing to take on, recognises the additional operational risk that comes with this strategy whilst maintaining the financial strength that it demands. The current plan places a premium on careful capital allocation to create consistent and sustainable added value returns for shareholders, through the delivery of homes and places of the highest quality.
Tony Pidgley CBE
Chairman
CHIEF EXECUTIVE'S STATEMENT
Summary of Performance
Berkeley has delivered adjusted pre-tax earnings of GBP479.9 million for the year, an increase of 5.6% on last year. This is from the sale of 3,776 homes (2015: 3,355) at an average selling price of GBP515,000 (2015: GBP575,000), reflecting the mix of properties sold in the year. Together with a further GBP51.0 million of profit from the sale of ground rent assets, this represents total pre-tax earnings of GBP530.9 million.
Year ended 30 April (unaudited) 2016 2015 Change
GBP'm GBP'm GBP'm %
--------------------------------- -------- -------- ------- ------
Revenue 2,047.5 2,120.0 -72.5 -3.4%
- from operations 1,994.1 2,020.2 -26.1 -1.3%
- sale of ground rent assets 53.4 99.8
--------------------------------- -------- -------- ------- ------
Gross profit 701.7 716.8 -15.1 -2.1%
- from operations 650.7 631.7 +19.0 +3.0%
- sale of ground rent assets 51.0 85.1
--------------------------------- -------- -------- ------- ------
Operating expenses (199.8) (192.7) -7.1 +3.7%
--------------------------------- -------- -------- ------- ------
Operating profit 501.9 524.1 -22.2 -4.2%
Net finance costs (7.5) (12.7) +5.2
Share of joint ventures 36.5 28.3 +8.2
--------------------------------- -------- -------- ------- ------
Profit before tax 530.9 539.7 -8.8 -1.6%
--------------------------------- -------- -------- ------- ------
Profit before tax - Adjusted* 479.9 454.6 +25.3 +5.6%
Earnings Per Share - Basic 295.8p 313.0p -17.2p -5.5%
Earnings Per Share - Adjusted* 267.3p 263.6p +3.7p +1.4%
Dividend Per Share 190p 180p +10p +5.6%
--------------------------------- -------- -------- ------- ------
Pre-Tax Return on Equity -
Adjusted* 27.8% 29.5% -1.7%
--------------------------------- -------- -------- ------- ------
* 'Adjusted' figures exclude GBP53.4 million of revenue (2015: GBP99.8 million) and GBP51.0 million of profit (2015: GBP85.1 million) from the sale of ground rent assets.
After tax, the profit for the year was GBP404.1 million, from which GBP259.5 million was distributed to shareholders with the dividend covered 1.6 times. The remaining profit generated, along with the Group's existing cash balances, funded the GBP602.1 million net investment in inventories and GBP99.9 million net investment in joint ventures, ahead of the enhanced profit delivery anticipated over the next two years, resulting in year-end net cash of GBP107.4 million (2015: GBP430.9 million).
We remain on target to deliver pre-tax profits in the region of GBP2.0 billion over the three year period ending 30 April 2018, underpinned by our GBP3.25 billion of forward sales. The scale of the key regeneration schemes from which we expect to generate these earnings makes the delivery of profit in specific annual periods sensitive to timing and we always prioritise quality ahead of individual period financial targets.
While sales are down 4% for the year as whole, the market for Berkeley has slowed some 20% in the five months to May 2016 as the EU Referendum approaches, with no new London launches in this period. This has had a more distinct impact on the higher end of the market which has also been affected by increased transaction taxes and the policy shift against buy-to-let investors. We continue to achieve sales prices ahead of our business plan with price inflation remaining for properties of less than GBP1.25 million where demand is most robust, with Berkeley already absorbing the increased cost of transaction taxes above this level in its pricing. New sales activity is now focused on the periods beyond 2017/18 with a number of new launches planned for later in the year, once the EU Referendum uncertainty passes.
We have made great strides with our land holdings in the last twelve months, acquiring 12 new sites encompassing some 8,600 plots, securing 9 new planning consents and 21 revised planning consents. This investment has seen our land holdings rise to 42,858 plots with an estimated future gross margin of GBP6.1 billion, up from 37,473 plots and GBP5.3 billion a year ago.
Strategic Delivery
As reported in December 2015, during the first half of the year the Board of Berkeley reviewed the quantum and profile of the Company's dividend programme that was put in place in 2011 to deliver GBP13.00 per share to shareholders by 2021. This review took into account a number of factors, including: the Company's financial strength and its visibility over future earnings and cash generation; the prevailing market conditions and stable operating environment; and the investment opportunities that continue to present themselves. Following the review, the Board determined that it intended to enhance the dividend programme by GBP0.5 billion, increasing it from GBP13.00 per share to GBP16.34 per share.
Previous Plan Enhanced Returns
------------------ -------------- -----------------
Paid to date GBP4.34 GBP5.34
------------------ -------------- -----------------
By September 2016 GBP1.44 GBP1.00
By September 2017 GBP1.44 GBP2.00
By September 2018 GBP1.45 GBP2.00
By September 2019 - GBP2.00
By September 2020 - GBP2.00
By September 2021 GBP4.33 GBP2.00
------------------ -------------- -----------------
To come GBP8.66 GBP11.00
------------------ -------------- -----------------
Total GBP13.00 GBP16.34
------------------ -------------- -----------------
This has enhanced, and gives visibility of, returns to shareholders within the proven framework which allows Berkeley to operate at its natural size and to optimise returns to shareholders while managing the risks of a cyclical market. The first GBP1 per share of this enhanced dividend return was paid to shareholders in January of this year and the next GBP1 per share will be paid in September. The changes to the dividend profile necessitated consequential changes to the 2011 LTIP to ensure ongoing alignment these were approved by 94% of shareholders who voted at the General Meeting on 12 February 2016.
Housing Market
Over the course of the year, the housing market for Berkeley has remained stable, with forward sales increasing by 10%, from GBP2.95 billion to GBP3.25 billion. This reflects a greater value of new properties exchanged in the period compared to those taken to profit in the year. Taking the year as a whole, the value of new reservations is 4% lower than in 2014/15 but this is from a marginally higher number of transactions. This reflects a change in mix due to the underlying market dynamics, coupled with the sales profile of Berkeley's London developments. It should be recognised that the Group's forward sales have now peaked as we enter a period of enhanced delivery over the next two years, over which time both forward sales and customer deposits on the balance sheet are likely to reduce accordingly, with customers buying later in the development cycle as market conditions normalise.
Global macro uncertainty and the impending EU Referendum have had a dampening effect on investment levels across all businesses and this is likely to continue up to and immediately after the result of the Referendum. This, along with the market adjusting to higher levels of property transaction taxes, has affected the upper end of the housing market in London, although underlying interest and demand remain good. As a consequence of these converging headwinds, reservations for the first five months of the calendar year are 20% down on the same period last year. At more mainstream price points, the market remains inflationary due to the embedded under-supply and the ripple effect of the increased transaction costs at the upper end of the market. Only 96 of the Group's reservations in the year utilised the Government's Help to Buy scheme.
In terms of the Group's available sales profile, having acquired a number of London developments in the period from 2009 to 2013, Berkeley forward sold these into the particularly strong market that began in 2013 and continued through 2014. As a consequence, there have been fewer launches of such schemes during the last 12 months and no new schemes launched in London over the last five months to May 2016. The Group continues to sell across all its developments at all price points but the rate of sale and time taken to complete transactions is adjusting to the current market conditions. At around 10%, reservation cancellation rates remain at the low end of historical norms.
It is of some concern that, after such strong market conditions for our industry, transaction levels in both the second hand and new homes market have not increased to the levels we all would hope for at this stage in the cycle. Government policy has sought to increase the level of home ownership but has focused primarily on the demand side, creating unintended consequences for supply. The real challenge is to build more homes for all sectors of the market; home ownership, private rent (PRS), shared ownership, affordable rent and social rent. To meet the numbers required, all these ownership models need to thrive. We look forward to working with both Central Government and the new London Mayor to make this happen.
Customers
The customer experience is central to Berkeley's reputation and our ability to secure sales. Our performance is independently assessed using the Net Promoter Score ("NPS"). This takes the percentage of customers who are promoters of the company and subtracts the percentage who are detractors, leaving a score in a possible range of -100 to +100.
Berkeley's NPS of 71.2 (2015: 69.8) illustrates our permanent focus on customer service on each of our sites. At Goodman's Fields in Aldgate, for example, Berkeley is creating 1,038 homes as well as a hotel, student accommodation, and public gardens. We have recently completed the latest block of 179 apartments and achieved an average NPS of 82.6.
These efforts were publicly acknowledged in March when Berkeley won the Best Customer Focus (Large Enterprise) Award at the Institute of Customer Service's UK Customer Satisfaction Awards. This is significant because the awards assess companies across all sectors - not solely in property or housing. Berkeley was commended for its comprehensive commitment to customer service, the level of employee engagement and a well-communicated strategy.
During 2016, we have continued to market all our homes in line with our UK First Policy. This policy has been in place since 2014 and is in line with the London Mayoral Concordat which invites developers to sell to the UK and international markets simultaneously. We recognise the importance of giving domestic customers a level playing field and every chance to compete in the new build market.
Homes
During the final quarter of this year, Berkeley launched a new design concept called the Urban House. This enables twice as many homes to be built on a site compared to traditional terraced housing. At a time when the demand for family homes in London outstrips supply by 13 to 1, the Urban House offers an intelligent, traditional three storey solution, which is full of light, economical to run and works equally well as private or affordable housing. The efficiencies are achieved by replacing the back garden with a private roof garden, while retaining space at the front for a car and bicycles.
The first 22 homes of this prototype have been built on two streets at Kidbrooke Village while others are under construction at Green Park Village in Reading. It represents the first time a large-scale developer has designed and delivered its own housing typology. Berkeley believes the Urban House will offer local authorities a new way of providing high density family homes, while the increase in density will make smaller sites viable for residential development which would not otherwise be possible.
It also illustrates the value of a flexible approach to housing standards, focused on delivering affordability and additionality.
Places
On every site, our goal is to create a strong community and a place where people enjoy a fantastic quality of life. No two developments are the same; each is tailored to the context. To enable this we apply our social sustainability framework to all developments above 100 homes to set an approach to creating communities on our developments.
As part of the estate regeneration programme at Woodberry Down, we have worked with the London Wildlife Trust to restore an 11 hectare wetland. This is now a free, beautiful, public amenity. In the first five days after the opening by Sir David Attenborough on 21 April, 4,500 people visited. At One Tower Bridge, we have invested in building a 900-seat theatre, designed by Stirling Prize winners Haworth Tompkins. This is due to open in September 2016.
In Bath, Berkeley recently completed 307 purpose-built student rooms for Bath Spa University. This scheme won a 2015 Royal Town Planning Institute Award for Planning Excellence on the basis of a partnership with the local council. Our work together transformed a derelict eyesore in a World Heritage site into a building that the city can be proud of. We designed a Georgian style building with a traditional Bath stone frontage, while using modern methods of construction and over 600 pods manufactured off-site.
There remains an ongoing high profile debate about the role of tall buildings in solving the housing crisis. We believe they have an important part to play. Tall buildings can make efficient use of land and locate many homes close to public transport. With good design, they create a fantastic sense of place and the tax and levies paid make a major contribution to local infrastructure.
The key challenge lies in how you create a community in high rise buildings. Berkeley is pioneering new solutions to this issue at South Quay Plaza, one of Britain's tallest residential developments. We have also now committed to develop community plans for every new major site.
Operations
Berkeley is proud of its reputation as a leader in sustainability and holds a Queens Award for Enterprise: Sustainable Development, awarded in 2014; the second time the Group had been awarded this accolade. Most recently, following the United Nations Climate Change Conference in December 2015, Berkeley has driven forward a range of major environmental initiatives.
We have developed a new research partnership, designed to help us better understand and manage energy use across our developments, and then deliver operational carbon and financial savings. We also helped the Institute for Public Policy Research to undertake and launch their initiative setting out how to make London one of the greenest cities in the world. Berkeley is currently creating 212 acres of new public open space across all our developments in the capital.
Most importantly, in a landmark announcement for the housing industry, Berkeley has committed to become the first major housebuilder in Britain to be carbon positive. Over the next two years (2016-18), we will aim to deliver a 10 per cent reduction in office and construction carbon emissions per person and set an internal carbon price, using the funds generated to offset more than all of the remaining carbon emissions.
Berkeley currently has over 13,800 people employed in the business or working through contractors on our sites, up 2,000 in the year, and apprenticeships are a central component of our workforce development strategy. Berkeley now has over 1,000 people in structured training across its workforce, as construction apprentices, or working on NVQs or equivalent qualifications. Over the last six months, plans have been developed to set up a construction skills centre on our regeneration sites at both Southall Waterside and White City and, by 2018, we intend to have had 1,500 people in an apprenticeship or vocational training across the Berkeley Group.
Our People
Berkeley's talented and varied people are our strongest resource. Recruiting and retaining a high calibre workforce across our autonomous businesses is crucial to the success of our company. In recognition of this, we relaunched our graduate scheme in September 2015 and continue to evolve our talent management programmes to ensure we realise the potential of our people across all areas of the business.
The safety of our people continues to be a top priority across all our operations, in addition to enabling enhanced health and wellbeing. We aspire to operate incident and injury free and are pleased to be able to report a reduced Accident Incident Rate (AIR) of 2.40 (2015: 2.46).
We are proud that Berkeley employees continue to contribute to wider society through support of the Berkeley Foundation, which reached its fifth year in 2016. This year, Berkeley received a Platinum Award from the Charities Aid Foundation for its Give As You Earn scheme, with 33% of staff giving to the Berkeley Foundation in this way. Through this, and other activities, Berkeley's staff have raised just under GBP1 million in the year. We are particularly delighted to have been recognised for Berkeley's work with The Change Foundation through the Street Elite programme, having won the Best Charity Partnership (Property & Construction) category at this year's Third Sector's Business Charity Awards. The programme has helped almost 300 young people on the edge of gangs and crime to build the skills for work, with many Street Elite graduates now in full-time employment including 15 directly within Berkeley.
Outlook
Berkeley's focus is on building a modern world-class business which is successful and sustainable in the long-term.
We have in place an enhanced shareholder returns programme through to 2021 which allows us to optimise returns to shareholders while managing the risks of a cyclical market and whilst retaining sufficient capital to invest in opportunities that will add incremental value to the ongoing business.
The housing market in London and the South East continues to have strong underlying fundamentals with an imbalance between demand and supply, a persistent low interest rate environment and high employment levels, notwithstanding recent unhelpful changes to property taxation. The short-term outlook is impacted by uncertainty whether it be global in nature or through the economic consequences of the outcome of the EU Referendum.
Berkeley is extremely well placed to deliver its previously announced targets over the next two years in this environment with cash due on forward sales in the next three years of GBP3.25 billion, net cash of GBP107 million and a longer-term land bank of some 42,858 plots comprising estimated future gross margin of GBP6.1 billion. The business is able to differentiate its performance through the plan, Our Vision, which embeds our strategy in each of our businesses, and provides a focal point for our ambition to be a modern world-class business with a focus on the quality of the homes and places we create and the way in which we do this.
Rob Perrins
Chief Executive
TRADING AND FINANCIAL REVIEW
Trading performance
Revenue of GBP2,047.5 million in the year (2015: GBP2,120.0 million) included GBP1,994.1 million of revenue from operations (2015: GBP2,020.2 million) and GBP53.4 million from the sale of a portfolio of ground rent assets (2015: GBP99.8 million).
The GBP1,994.1 million of revenue from operations included GBP1,965.2 million of residential revenue (2015: GBP1,936.2 million), GBP2.3 million from land sales on two sites (2015: GBP12.3 million) and GBP26.6 million of commercial revenue (2015: GBP71.7 million).
3,776 new homes (2015: 3,355) were sold across London and the South of England at an average selling price of GBP515,000 (2015: GBP575,000). The changes to the average selling price are a result of mix with Berkeley completing two student developments in the current year, one in Bath and one in London which together comprise 638 units.
Revenue of GBP26.6 million from commercial activities (2015: GBP71.7 million) included the sale of some 119,000 sqft of office, retail and leisure space across a number of the Group's developments including Fulham Reach in Hammersmith, Battersea Reach in Wandsworth and Goodman's Fields in central London. The GBP71.7 million of revenue last year was also from the sale of office, retail and leisure space across a number of the Group's developments, in particular an 89,000 sqft hotel at Goodman's Fields.
During the year, the Group sold a portfolio of ground rent assets across some 43 sites for proceeds of GBP53.4 million and a gross profit of GBP51.0 million. In the prior year, the Group sold a portfolio of ground rent assets across some 60 sites for proceeds of GBP99.8 million and a gross profit of GBP85.1 million. Income and expenses associated with both sales have been recognised in the income statement through revenue and gross profit.
The adjusted gross margin percentage, excluding profit from the sale of ground rent assets, has increased to 32.6% (2015: 31.3%), and reflects the mix of homes sold in the year.
Overheads of GBP199.8 million (2015: GBP192.7 million) included a charge of GBP27.4 million in respect of the acceleration (there is no increase in the overall cost) of the accounting charge for the modifications to the 2011 LTIP following the changes to the shareholder returns programme made during the year. It also included an GBP8.3 million charge for Part B of the 2009 LTIP scheme which completed on 15 April 2016 with the vesting of the second tranche of awards. In the prior year, there was a charge of GBP47.0 million in respect of the Company's decision to settle the tax and national insurance liabilities arising on the vesting of options for participants in Part B of the 2009 LTIP scheme on 15 April 2015, in lieu of issuing shares to this value.
The result is that the Group's adjusted operating margin, excluding the profit from sale of the ground rent assets, has increased to 22.6% from 21.7% last year.
Berkeley's share of the results of joint ventures was a profit of GBP36.5 million (2015: GBP28.3 million) which reflects ongoing completions at 375 Kensington High Street and Stanmore Place within St Edward and the costs for St William in the initial pre-development stage of the joint venture.
The Group has remained cash positive throughout the year, and has exercised an option to extend the term of its current corporate banking facilities by a further year to 2021. The result is that net finance costs in the year have decreased from GBP12.7 million to GBP7.5 million with the prior year including a GBP3.9 million charge from amortising fees on the refinancing of the Group's bank facilities.
Adjusted pre-tax return on equity, excluding profit from the sale of ground rent assets, has decreased from 29.5% to 27.8%. Basic earnings per share has decreased by 5.5% from 313.0 pence to 295.8 pence, which takes into account the issue of a further 1.4 million shares issued in April to satisfy share awards under Part B of the 2009 LTIP scheme.
Financial Position
Net assets increased over the course of the year by GBP174.9 million, or 10.7%, to GBP1,812.8 million (2015: GBP1,637.9 million). This is after payment of GBP259.5 million of dividends and equates to a net asset value per share of 1,314 pence, up 9.6% from 1,199 pence at 30 April 2015.
Inventories have increased by GBP602.0 million from GBP2,654.1 million at 30 April 2015 to GBP3,256.1 million at 30 April 2016. Inventories include GBP384.1 million of land not under development (30 April 2015: GBP342.0 million), GBP2,853.9 million of work in progress (30 April 2015: GBP2,280.2 million) and GBP18.1 million of completed stock (30 April 2015: GBP31.9 million).
Trade and other payables are GBP1,858.9 million at 30 April 2016 (GBP1,635.5 million at 30 April 2015). These include GBP1,105.8 million of on account receipts from customers (30 April 2015: GBP920.9 million), which have increased as a result of strong trading in the year, and land creditors of GBP174.7 million (30 April 2015: GBP205.1 million). Provisions of GBP88.5 million (30 April 2015: GBP75.1 million) include post completion development obligations and other provisions.
The Group ended the year ungeared with net cash of GBP107.4 million (30 April 2015: GBP430.9 million). This is a decrease of GBP323.5 million during the year (2015: increase of GBP301.7 million) as a result of GBP530.8 million of cash generated from operations (2015: GBP528.4 million) and a net outflow of GBP436.8 million in working capital (2015: net inflow of GBP115.2 million), before tax and other net cash outflows of GBP158.0 million (2015: GBP106.7 million) and dividends of GBP259.5 million (2015: GBP243.5 million).
Banking
The Group's financial position is further supported by the extension of the Group's banking facilities during the year. On 23 March 2016, Berkeley extended its committed corporate banking facilities of GBP575 million, taking the maturity date of the Group's facilities from March 2020 to March 2021. This gives clarity of financing for five years, with the option held over a further one year extension, and extends the benefit of the materially reduced ongoing costs associated with the facility.
Joint Ventures
Investments accounted for using the equity method have increased from GBP50.1 million at 30 April 2015 to GBP150.0 million at 30 April 2016. Berkeley's joint ventures include St Edward, a joint venture with Prudential plc and St William, a joint venture with National Grid plc. The increase in joint venture investments during the year reflects funding into the St William joint venture along with profits generated in, but not distributed from, St Edward.
St Edward has four schemes currently in development at Stanmore Place, 375 Kensington High Street, 190 Strand and, launched in the first half of the year, a new site at Green Park in Reading. 240 homes were sold in the year at an average selling price of GBP1,329,000 (2015: 230 at GBP1,229,000), which reflects the mix of properties sold, predominantly at 375 Kensington High Street.
1,868 plots in Berkeley's land holdings relate to St Edward schemes. St Edward is continuing to identify opportunities to develop the joint venture through further sites to which it can add value, and controls a commercial site in Westminster which has a detailed planning consent but will not move into development until the premises are vacated by the current tenant.
3,599 plots in Berkeley's land holdings relate to St William schemes. Berkeley is working closely with National Grid to identify sites from across its portfolio to bring through into its land holdings. Of the 12 new sites acquired by the Group during the year, 4 were through St William.
Land
Berkeley has made strong progress in delivering value into and from its land holdings during the year. At 30 April 2016, the Group (including joint ventures) controlled some 42,858 plots with an estimated gross margin of GBP6,146 million. This compares with 37,473 plots and an estimated gross margin of GBP5,272 million at 30 April 2015. Of the total land holdings plots, 33,786 plots (2015: 34,215) are owned and included on the balance sheet and 9,072 plots (2015: 3,258) are contracted sites which cannot be moved into development as they do not have an implementable planning consent and/or as there are constraints and challenges surrounding, for example, vacant possession, CPO requirements or utilities provision which need to be resolved. We also hold a strategic pipeline of long-term options for in excess of 5,000 plots.
Twelve new sites have been added to the land bank in the year. The acquisitions have included a range of sites from outside of London in desirable locations such as Ascot, Wokingham and Southwater and in London at Cockfosters, Blackheath and West End Green in Paddington, along with the large, complex and long-term regeneration sites of Stephenson Street, the Oval Gasworks, and within St William, the former gasworks sites at Fulham, Hornsey, Watford and Borehamwood. Five of the sites have been acquired unconditionally and seven are contracted on a subject to planning or vacant possession basis.
Berkeley has secured 30 planning consents this year, nine on schemes which did not previously have an implementable planning consent and 21 revised consents. The new consents include White City for over 1,450 homes to be delivered over the next 15 years, St William's scheme in Battersea, West End Green in Paddington and on other developments in Southwater, Taplow, Winchester, Latchmere, Kingston and Cranleigh, some of which remain subject to finalisation of section 106 agreements. These schemes are all in good locations underpinned by strong demand.
The revised consents include the securing of an improved masterplan at Southall along with a resolution to grant detailed planning for the first phase on this long-term regeneration scheme. The first phase comprises some 620 units over 9 blocks with 1.4 acres of public parkland. The affordable housing will be delivered ahead of the private units. Our core long-term regeneration schemes now comprise Royal Arsenal, Kidbrooke Village, Woodberry Down, Beaufort Park, Southall and Stephenson Street, which we acquired in the year. The latter site comprises some 27 acres adjacent to West Ham station and offers real place-making potential to regenerate this area of East London, providing an equal mix of private affordable and private rental homes.
The Group's land holdings at 30 April 2016 are across some 77 sites, of which 56 (73%) have an implementable planning consent and are in construction, a further 7 (9%) have at least a resolution to grant planning but the consent is not yet implementable and 14 (18%) remain in the planning process. Of this latter category, 11 are subject to conditional contracts.
This shows the underlying strength of the Group's land bank which will be developed over the next 20 years. The estimated future gross margin represents management's risk-adjusted assessment of the potential development outturn for each site, taking account of a wide range of factors, including: current sales and input prices; the political and economic backdrop; the planning regime; and other market forces; all of which could have a significant effect on the eventual outcome. The increase in gross margin in the year is due to both acquisitions and value added through improvements secured both to current and future schemes, a core part of the Group's activities.
- End -
For further information please contact:
The Berkeley Group Holdings plc Novella Communications R C Perrins Tim Robertson R J Stearn T: 020 3151 7008 T: 01932 868555
Principal Risks and Uncertainties
Berkeley's approach allows management to focus on making the right long-term decisions to deliver long-term success, and retain the flexibility to take advantage of any opportunities which arise in the short and medium term.
Operating Risk
Risk management is embedded in the organisation at operating company, divisional and Group levels, with different types of risk requiring different levels and types of management response.
The principal operating risks of the Group which have been considered by the Board include, but are not limited to, the following areas: economic conditions, regulation, the planning process, retaining people, securing sales, mortgage availability, environmental and social sustainability and health and safety, land availability, build cost and programme and product quality. These risks, and Berkeley's approach to mitigating them, are set out on the following pages.
Financial Risk
In light of these operating risks, Berkeley aims to keep financial risk low, and finances its operations by a combination of shareholders' funds, deposits and on account receipts and borrowings. The Group's operations are in sterling and so there is no direct significant currency risk. Its main financial risks are:
-- Liquidity risk - the risk that suitable funding for the Group's activities may not be available.
-- Market credit risk - the risk that counterparties will default on their contractual obligations resulting in a loss to the Group. The Group's exposure to credit risk is comprised of the cash and cash equivalents and trade and other receivables held within current assets on the consolidated balance sheet.
-- Market interest rate risk - the risk that Group financing activities are adversely affected by fluctuations in market interest rates.
The Board approves treasury policy and senior management control day-to-day operations. Relationships with banks and cash management are co-ordinated centrally.
The treasury policy is intended to maintain an appropriate capital structure to manage the financial risks identified above and provide the right platform for the business to manage its operating risks.
Risk Description Approach to Mitigating Risk
Economic Outlook
As a property developer, Recognition that Berkeley operates in
Berkeley's business is sensitive a cyclical market is central to our
to wider economic factors strategy.
such as changes in interest
rates, employment levels Maintaining a strong financial position
and general consumer confidence. is key to our business model and protects
us against adverse changes in economic
Some customers are also sensitive conditions.
to changes in the sterling
exchange rate in terms of Land investment is carefully targeted
their buying decisions or and underpinned by demand fundamentals
ability to meet their obligations and a solid viability case, even when
under contracts. markets are uncertain.
Changes to economic conditions Levels of committed expenditure are
in the UK, Europe and worldwide carefully monitored against forward
may lead to a reduction in sales secured, cash levels and headroom
demand for housing which against our available bank facilities,
could impact on the Group's with the objective of keeping financial
ability to deliver its corporate risk low to mitigate the operating risks
strategy. of delivery in uncertain markets.
Production programmes are continually
assessed, depending upon market conditions.
The business is committed to operating
at an optimal size, with a strong balance
sheet, through autonomous businesses
to maintain the flexibility to react
swiftly, when necessary, to changes
in market conditions.
Political Outlook
Significant political events, Whilst we cannot directly influence
including membership of the political events, the risks are taken
EU, may impact Berkeley's into account when setting our business
business through, for instance, strategy and operating model. In addition,
the reluctance of buyers we actively engage in the debate on
to make investment decisions policy decisions.
due to political uncertainty
and, subsequently, specific
policies and regulation may
be introduced that directly
impact our business model.
Regulation
Adverse changes to Government Berkeley is focused geographically on
policy on areas such as taxation, London and the South of England, which
housing and the environment limits our risk when understanding and
could restrict the ability determining the impact of new regulation
of the Group to deliver its across multiple locations and jurisdictions.
strategy.
The effects of changes to Government
Failure to comply with laws policies at all levels are closely monitored
and regulations could expose by operating businesses and the Board,
the Group to penalties and and representations made to policy-setters
reputational damage. where appropriate.
Berkeley's experienced teams are well
placed to interpret and implement new
regulations at the appropriate time
through direct lines of communication
across the Group, with support from
internal and external legal advisors.
Detailed policies and procedures are
in place where appropriate to the prevailing
regulations and these are communicated
to all staff.
Land Availability
An inability to source suitable Understanding the markets in which we
land to maintain the Group's operate is central to Berkeley's strategy
land holdings at appropriate and, consequently, land acquisition
margins in a highly competitive is focused on Berkeley's core markets
market could impact on the of London and the South of England,
Group's ability to deliver markets which it believes have strong
its corporate strategy. demand fundamentals.
Berkeley has experienced land teams
with strong market knowledge in their
areas of focus, which gives us the confidence
to buy land without an implementable
planning consent and, with an understanding
of local stakeholders needs, positions
Berkeley with the best chance of securing
a viable planning consent.
Berkeley acquires land opportunistically,
where it meets its internal criteria
for purchase, and considers joint ventures
in particular as a vehicle to work with
the right partners who bring high quality
land complemented by Berkeley's expertise.
Each land acquisition is subject to
a formal internal appraisal and approval
process prior to the submission of a
bid and again prior to exchange of contracts
to give the Group the greatest chance
of securing targeted land.
The Group maintains its land holdings
to mitigate against significant impacts
from market changes or delayed build
activity.
Planning Process
Delays or refusals in obtaining The Group's strategic geographical focus
commercially viable planning and expertise places it in the best
permissions could result position to conceive and deliver the
in the Group being unable right consents for the land acquired.
to develop its land holdings.
Full detailed planning and risk assessments
This could have a direct are performed and monitored for each
impact on the Group's ability site without planning permission, both
to deliver its product and before and after purchase.
on its profitability.
Our assessment of the risk profile dictates
whether sites are acquired either conditionally
or unconditionally.
The planning status of all sites is
reviewed at both monthly divisional
Board meetings and Main Board meetings.
The Group works closely with local communities
in respect of planning proposals and
strong relationships are maintained
with local authorities and planning
officers.
Retaining People
An inability to attract,
develop, motivate and retain We have developed a series of commitments
talented employees could within Our Vision, our strategic plan
have an impact on the Group's for the business, to ensure that we
ability to deliver its strategic retain and develop the best people to
priorities. support the business in the long-term.
Failure to consider the retention Succession planning is regularly reviewed
and succession of key management at both divisional and Board level.
could result in a loss of Close relationships and dialogue are
knowledge and competitive maintained with key personnel.
advantage.
Remuneration packages are regularly
benchmarked against the industry to
ensure they remain competitive.
We promote the engagement of our people
with the business and its impact on
wider society through the activities
of the Berkeley Foundation.
Securing Sales
An inability to match supply
to demand in terms of product, Detailed market demand assessments
location and price could of each site are undertaken before acquisition
result in missed sales targets and regularly during delivery of each
and / or high levels of completed scheme to ensure that supply is matched
stock which in turn could to demand in each location.
impact on the Group's ability
to deliver its corporate Design, product type and product quality
strategy. are all assessed on a site-by-site basis
to ensure that they meet the target
market and customer aspirations in that
location.
The Group has a diverse range of developments
with homes available across a broad
range of property prices to appeal to
a wide market.
The Group's ability to forward sell
reduces the risk of the development
cycle where possible, thereby justifying
and underpinning the financial investment
in each of the Group's sites. Completed
stock levels are reviewed regularly.
Mortgage Availability
Mortgage providers were negatively
impacted by the financial Berkeley has a broad product mix and
crisis from 2008 to 2011, customer base which reduces the reliance
and this reduced their ability on mortgage availability across its
and appetite to provide mortgages portfolio.
to potential purchasers at
the time. The Group participates in the Government's
Help to Buy scheme, which provides deposit
An inability of customers assistance to first time buyers, and
to secure sufficient mortgage has participated in other Government
finance now or in the future schemes historically.
could have a direct impact
on the Group's transaction Deposits are taken on all sales to mitigate
levels. the financial impact on the Group in
the event that sales do not complete
due to a lack of mortgage availability.
Environment and Social Sustainability
Our Vision includes specific commitments
Berkeley is aware of the to enhance environmental and social
environmental and social sustainability considerations in the
impact of the homes and communities delivery of our schemes and operation
that it builds, both during of our business.
the construction phase and
on occupation by its customers. These complement existing practices
within the Group to focus on brownfield
Failure to address sustainability development, monitor carbon emissions
issues could affect the Group's and to be a considerate contractor on
ability to acquire land, all of our schemes and be welcomed in
gain planning permission, the communities within which we operate.
manage sites effectively
and respond to increasing
customer demand for sustainable
homes.
Health and Safety
Berkeley's operations have
a direct impact on the health
and safety of its people, Berkeley considers this to be an area
contractors and members of of critical importance. Berkeley's health
the public. and safety strategy is set by the Board.
Dedicated health and safety teams are
A lack of adequate procedures in place in each division and at Head
and systems to reduce the Office.
dangers inherent in the construction
process increases the risk Procedures, training and reporting are
of accidents or site-related all regularly reviewed to ensure high
catastrophes, including fire standards are maintained and comprehensive
and flood, which could result accident investigation procedures are
in serious injury or loss in place. Adequate insurance is held
of life leading to reputational to cover the risks inherent in large-scale
damage, financial penalties construction projects.
and disruption to operations.
The Group has implemented a number of
initiatives to improve health and safety
standards on site, with workshops held
with contractors during the year.
Build cost and programme
Build costs are affected A procurement and programming strategy
by the availability of skilled for each development is agreed by the
labour and the price and divisional Board before site acquisition,
availability of materials, with a further assessment of procurement
supplies and subcontractors. and programming undertaken and agreed
by the divisional Board prior to the
Changes to these prices and commencement of construction.
the availability of labour
could impact on the profitability Build cost reconciliations and build
of each scheme. programme dates are presented and reviewed
in detail at divisional cost review
meetings each month.
The Group monitors its development obligations
and recognises any associated liabilities
which arise.
Product Quality
Berkeley has a reputation Detailed reviews are undertaken of the
for high standards of quality product on each scheme both during the
in its product. acquisition of the site and throughout
the build process to ensure that product
If the Group fails to deliver quality is maintained.
against these standards and
its wider development obligations, Customer satisfaction surveys are undertaken
it could be exposed to reputational on the handover of all private apartments,
damage, as well as reduced and feedback incorporated into the specification
sales and increased cost. and quality of subsequent schemes.
Cyber and Data Risk
The Group could suffer significant The Group acknowledges that it places
financial and reputational significant reliance upon the availability,
damage as a result of the accuracy and security of all of its
corruption, loss or theft underlying operating systems and the
of data, whether inadvertent data contained therein, whilst also
or via a deliberate, targeted recognising the changing landscape of
cyber-attack. cyber-risk. Consequently, Berkeley's
systems and control procedures are designed
to ensure that data confidentiality
and integrity are not compromised.
Our Information Security Programme mirrors
the relevant core elements of the security
standard ISO27001: Information Security
Management. Whilst there is a primary
focus upon stopping security breaches
in the first instance, ongoing monitoring
and scanning is also conducted.
An IT Security Committee meets on a
monthly basis to address all cyber security
matters. During the year, the committee
initiated a review under the Government's
Cyber-Essentials scheme, which reviews
compliance with key control areas. Additionally,
a Group-wide security awareness programme
has been rolled out.
The Group operates multiple data centres,
thereby ensuring that there is no centralised
risk exposure and the adequacy of the
IT disaster recovery plan is regularly
assessed.
The Group has Cyber insurance in place
to mitigate against any financial impact.
Consolidated Income Statement
For the year ended 30 April 2016 2015
Unaudited Audited
Notes GBPm GBPm
------------------------------------------ ------ ---------- ----------
Revenue 2,047.5 2,120.0
Revenue includes:
* from operations 1,994.1 2,020.2
* from sale of ground rent assets 53.4 99.8
------------------------------------------ ------ ---------- ----------
Cost of sales (1,345.8) (1,403.2)
------------------------------------------ ------ ---------- ----------
Gross profit 701.7 716.8
Gross profit includes:
* from operations 650.7 631.7
* from sale of ground rent assets 51.0 85.1
------------------------------------------ ------ ---------- ----------
Net operating expenses (199.8) (192.7)
------------------------------------------ ------ ---------- ----------
Operating profit 501.9 524.1
Finance income 3 3.1 3.0
Finance costs 3 (10.6) (15.7)
Share of results of joint ventures using
the equity method 36.5 28.3
---------- ----------
Profit before taxation for the year 530.9 539.7
Income tax expense 4 (126.8) (116.2)
------------------------------------------ ------ ---------- ----------
Profit after taxation for the year 404.1 423.5
------------------------------------------ ------ ---------- ----------
Earnings per share:
Basic 5 295.8p 313.0p
Diluted 5 268.7p 276.9p
------------------------------------------ ------ ---------- ----------
Consolidated Statement of Comprehensive Income
For the year ended 30 April 2016 2015
Unaudited Audited
GBPm GBPm
--------------------------------------------------- ---------- --------
Profit after taxation for the year 404.1 423.5
---------------------------------------------------- ---------- --------
Other comprehensive income/(expense)
Items that will not be reclassified to
profit or loss
Actuarial loss recognised in the pension
scheme (0.6) (0.6)
Deferred tax on actuarial loss recognised
in the pension scheme 0.1 0.1
---------------------------------------------------- ---------- --------
Total items that will not be reclassified
to profit or loss (0.5) (0.5)
---------------------------------------------------- ---------- --------
Items that may be reclassified subsequently
to profit or loss
Change in value of other investments - 1.0
---------------------------------------------------- ---------- --------
Total items that may be reclassified subsequently
to profit or loss - 1.0
---------------------------------------------------- ---------- --------
Items reclassified to profit or loss
Gain on value of other investments (2.0) -
--------------------------------------------------- ---------- --------
Total items reclassified to profit or loss (2.0) -
--------------------------------------------------- ---------- --------
Other comprehensive income for the year (2.5) 0.5
---------------------------------------------------- ---------- --------
Total comprehensive income for the year 401.6 424.0
---------------------------------------------------- ---------- --------
Consolidated Statement of Financial Position
As at 30 April 2016 2015
Unaudited Audited
GBPm GBPm
---------------------------------- ---------- ----------
Assets
Non-current assets
Intangible assets 17.2 17.2
Property, plant and equipment 23.5 23.5
Investment properties - 0.2
Investments accounted for using
the equity method 150.0 50.1
Other investments - 12.0
Deferred tax assets 71.9 72.7
262.6 175.7
---------------------------------- ---------- ----------
Current assets
Inventories 3,256.1 2,654.1
Trade and other receivables 212.3 145.6
Cash and cash equivalents 107.4 430.9
----------------------------------- ---------- ----------
3,575.8 3,230.6
---------------------------------- ---------- ----------
Total assets 3,838.4 3,406.3
----------------------------------- ---------- ----------
Liabilities
Non-current liabilities
Trade and other payables (90.3) (131.7)
Provisions for other liabilities
and charges (68.3) (61.1)
----------------------------------- ---------- ----------
(158.6) (192.8)
---------------------------------- ---------- ----------
Current liabilities
Trade and other payables (1,768.6) (1,503.8)
Current tax liabilities (78.2) (57.8)
Provisions for other liabilities
and charges (20.2) (14.0)
----------------------------------- ---------- ----------
(1,867.0) (1,575.6)
Total liabilities (2,025.6) (1,768.4)
----------------------------------- ---------- ----------
Total net assets 1,812.8 1,637.9
----------------------------------- ---------- ----------
Equity
Shareholders' equity
Share capital 6.9 6.8
Share premium 49.8 49.6
Capital redemption reserve 24.5 24.5
Other reserve (961.3) (961.3)
Retained profit 2,692.9 2,518.3
----------------------------------- ---------- ----------
Total equity 1,812.8 1,637.9
----------------------------------- ---------- ----------
Consolidated Statement of Changes in Equity
Attributable to shareholders
----------------------------------------------------------------------------
Capital
Share Share redemption Other Revaluation Retained
capital premium reserve reserve reserve profit Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------------- -------- -------- ----------- -------- ------------ --------- --------
Unaudited
At 1 May 2015 6.8 49.6 24.5 (961.3) - 2,518.3 1,637.9
Profit after taxation for the year - - - - - 404.1 404.1
Other comprehensive income for the year - - - - - (2.5) (2.5)
Purchase of own shares - - - - - (1.2) (1.2)
Issue of ordinary shares 0.1 0.2 - - - - 0.3
Transactions with shareholders:
* Credit in respect of employee share schemes - - - - - 28.8 28.8
* Deferred tax in respect of employee share schemes - - - - - 4.9 4.9
* Dividends to equity holders of the Company - - - - - (259.5) (259.5)
--------------------------------------------------------- -------- -------- ----------- -------- ------------ --------- -------- At 30 April 2016 6.9 49.8 24.5 (961.3) - 2,692.9 1,812.8 --------------------------------------------------------- -------- -------- ----------- -------- ------------ --------- -------- Audited At 1 May 2014 6.8 49.3 24.5 (961.3) 4.1 2,317.9 1,441.3 Profit after taxation for the year - - - - - 423.5 423.5 Other comprehensive income for the year - - - - - 0.5 0.5 Reserves transfer (to) revaluation reserve - - - - (4.1) 4.1 - Issue of ordinary shares - 0.3 - - - - 0.3 Transactions with shareholders: * Credit in respect of employee share schemes - - - - - 2.7 2.7 * Deferred tax in respect of employee share schemes - - - - - 13.1 13.1 * Dividends to equity holders of the Company - - - - - (243.5) (243.5) At 30 April 2015 6.8 49.6 24.5 (961.3) - 2,518.3 1,637.9 --------------------------------------------------------- -------- -------- ----------- -------- ------------ --------- --------
Consolidated Cash Flow Statement
For the year ended 30 April 2016 2015
Unaudited Audited
Notes GBPm GBPm
--------------------------------------------- ------ ---------- ----------
Cash flows from operating activities
Cash generated from operations 6 94.0 643.6
Proceeds from sale of investment properties 0.2 8.3
Interest received 3.0 3.2
Interest paid (2.7) (5.4)
Income tax paid (100.8) (140.5)
--------------------------------------------- ------ ---------- ----------
Net cash flow from operating activities (6.3) 509.2
--------------------------------------------- ------ ---------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (4.9) (4.6)
Sale of financial assets 12.8 -
Dividends from investments accounted
for using the equity method - 12.3
Proceeds on disposal of property, plant
and equipment 2.1 0.6
Movements in loans with joint ventures (63.2) 27.3
Net cash flow from investing activities (53.2) 35.6
--------------------------------------------- ------ ---------- ----------
Cash flows from financing activities
Proceeds from issue of shares 0.3 0.4
Purchase of own shares (4.8) -
Repayment of borrowings - (1.0)
Dividends paid to Company's shareholders (259.5) (243.5)
--------------------------------------------- ------ ---------- ----------
Net cash flow from financing activities (264.0) (244.1)
--------------------------------------------- ------ ---------- ----------
Net (decrease)/increase in cash and
cash equivalents (323.5) 300.7
Cash and cash equivalents at the start
of the financial year 430.9 130.2
--------------------------------------------- ------ ---------- ----------
Cash and cash equivalents at the end
of the financial year 107.4 430.9
--------------------------------------------- ------ ---------- ----------
The Berkeley Group Holdings plc
Notes to the consolidated financial information
1 General information
The Berkeley Group Holdings plc ("the Company") is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is Berkeley House, 19 Portsmouth Road, Cobham, Surrey, KT11 1JG. The Company and its subsidiaries (together "the Group") are engaged in residential led, mixed-use property development.
The unaudited financial information for the year ended 30 April 2016 and the comparative audited information for the year ended 30 April 2015 does not constitute statutory accounts within the meaning of s434(3) and s435(3) of the Companies Act 2006. This information was approved by the Board on 14 June 2016, and has been extracted from the Group's statutory accounts which have not yet been signed, nor have the auditors yet reported on them.
The statutory accounts for the year ended 30 April 2015 have been delivered to the Registrar of Companies. The report of the auditors on these financial statements was unqualified and did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006.
2 Basis of preparation
This information, including the comparative information for the year ended 30 April 2015, has been prepared in accordance with EU endorsed International Financial Reporting Standards ("IFRSs"), International Financial Reporting Interpretations Committee ("IFRIC") interpretations and in accordance with the listing rules of the Financial Conduct Authority and consistently in accordance with the accounting policies set out in the 2015 Annual Report.
There were no new standards, amendments and interpretations that were adopted by the Group and effective for the first time for the financial year beginning 1 May 2015 that had a material impact on the Group. Furthermore, there are no standards, amendments or interpretations that are not yet effective that would be expected to have a material impact on the Group.
During the 2014/2015 financial year, the Company dismissed its finance director, Mr Nicolas Simpkin, who issued legal proceedings in the Employment Tribunal against the Company on the 28 November 2014. On the 20 November 2015 Mr Simpkin served High Court proceedings on the Company. The proceedings are being defended by the Company with the assistance of external professional advisers.
3 Net finance costs
For the year ended 30 April 2016 2015
Unaudited Audited
GBPm GBPm
------------------------------------ ---------- --------
Finance income 3.1 3.0
------------------------------------ ---------- --------
Finance costs
Interest payable on bank loans and
non-utilisation fees (2.8) (4.8)
Amortisation of facility fees (3.1) (5.7)
Other finance costs (4.7) (5.2)
------------------------------------ ---------- --------
(10.6) (15.7)
------------------------------------ ---------- --------
Net finance costs (7.5) (12.7)
------------------------------------ ---------- --------
Finance income predominantly represents interest earned on cash deposits.
Other finance costs represent imputed interest on taxation and on land purchased on deferred settlement terms.
4 Income tax expense
For the year ended 30 April 2016 2015
Unaudited Audited
GBPm GBPm
------------------------------------ ---------- --------
Current tax
UK corporation tax payable (107.5) (130.2)
Adjustments in respect of previous
periods (14.9) 4.8
(122.4) (125.4)
Deferred tax (4.4) 9.2
(126.8) (116.2)
------------------------------------ ---------- --------
5 Earnings per share
Basic earnings per share are calculated as the profit for the financial year attributable to shareholders of the Group divided by the weighted average number of shares in issue during the year.
For the year ended 30 April 2016 2015
Unaudited Audited
------------------------------------- ------------------------- --------
Profit attributable to shareholders
(GBPm) 404.1 423.5
Weighted average no. of shares (m) 136.6 135.3
------------------------------------- ------------------------- --------
Basic earnings per share (p) 295.8 313.0
------------------------------------- ------------------------- --------
For diluted earnings per ordinary share, the weighted average number of shares in issue is adjusted to assume the conversion of all potentially dilutive ordinary shares. At 30 April 2016, the Group had two (2015: three) categories of potentially dilutive ordinary shares: 16.8 million (2015: 16.1 million) GBPnil share options under the 2011 LTIP and 5,000 (2015: 0.5 million) share options under the 2015 Bonus Banking plan. 2.8 million (2015: 2.9 million) share options vested on 15 April 2016 under Part B of the 2009 LTIP scheme and 1.4 million (2015: 1.3 million) were issued to participants, with the Company settling the option price and participants' tax liability in respect of the balance, in lieu of issuing shares.
A calculation is undertaken to determine the number of shares that could have been acquired at fair value based on the aggregate of the exercise price of each share option and the fair value of future services to be supplied to the Group which is the unamortised share-based payments charge. The difference between the number of shares that could have been acquired at fair value and the total number of options is used in the diluted earnings per share calculation.
For the year ended 30 April 2016 2015
Unaudited Audited
---------------------------------------- ------------------------- ----------
Profit used to determine diluted EPS
(GBPm's) 404.1 423.5
---------------------------------------- ------------------------- ----------
Weighted average no. of shares (m's) 136.6 135.3
Adjustments for:
Share options - 2009 LTIP Part B 1.3 3.5
Share options - 2011 LTIP 12.5 13.6
Bonus plan shares - 0.5
Shares used to determine diluted EPS
(m's) 150.4 152.9
---------------------------------------- ------------------------- ----------
Diluted earnings per share (p) 268.7 276.9
---------------------------------------- ------------------------- ----------
6 Notes to the Consolidated Cash Flow Statement
For the year ended 30 April 2016 2015
Unaudited Audited
GBPm GBPm
------------------------------------------------ ---------- ----------
Net cash flows from operating activities
Profit for the financial year 404.1 423.5
Adjustments for:
Taxation 126.8 116.2
Depreciation 3.1 2.7
(Profit)/Loss on sale of fixed assets (0.2) 0.2
(Profit)/Loss on sale of financial
asset (2.8) -
Profit on sale of investment properties - (1.3)
Finance income (3.1) (3.0)
Finance costs 10.6 15.7
Share of results of joint ventures
after tax (36.5) (28.3)
Non-cash charge in respect of share
awards 28.8 2.7
Changes in working capital:
Increase in inventories (602.0) (172.9)
(Increase)/decrease in receivables (67.8) 7.6
Increase in trade and other payables 233.6 281.1
Decrease in employee benefit obligations (0.6) (0.6)
------------------------------------------------ ---------- ----------
Cash generated from operations 94.0 643.6
------------------------------------------------ ---------- ----------
Reconciliation of net cash flow to
net cash
Net (decrease)/increase in cash and
cash equivalents, including bank overdraft (323.5) 300.7
Net decrease in borrowings - 1.0
--------------------------------------------- -------- ------
Movement in net cash in the financial
year (323.5) 301.7
Opening net cash 430.9 129.2
--------------------------------------------- -------- ------
Closing net cash 107.4 430.9
--------------------------------------------- -------- ------
Net cash
Cash and cash equivalents 107.4 430.9
Current borrowings - -
--------------------------------------------- -------- ------
Net cash 107.4 430.9
--------------------------------------------- -------- ------
7 Related party transactions
The Group has entered into the following new related party transactions that have not previously been disclosed:
Transactions with Directors
i) During the financial year, Mr A W Pidgley paid GBP378,593 (2015: GBP25,470) and Mr R C Perrins paid GBP155,167 (2015: GBPnil) to the Group for works carried out at their homes under the Group's own build scheme. This is a scheme whereby eligible employees may enter into an arrangement, at commercial rates, in accordance with the relevant policies of the Group. There were no balances outstanding at the year end.
ii) Berkeley Homes plc has entered into an agreement with Langham Homes, a company controlled by Mr T K Pidgley who is the son of the Group's Chairman, under which Langham Homes will be paid a fee for a land introduction on an arm's length basis. No payments have been made under this agreement in the year and there were no outstanding balances at 30 April 2016. In the year ended 30 April 2015, a fee of GBP173,000 was paid under this agreement when an associated land purchase became unconditional. Langham Homes continues to introduce land to the Group and in the event that any further land purchases are agreed, further fees may be payable to Langham Homes in future periods.
iii) Mr K Whiteman, a Director of the Company, contracted to purchase an apartment at Royal Arsenal Riverside for GBP650,000 on 12 April 2016 from Berkeley Homes plc, a wholly owned subsidiary of the Company. The contract between Berkeley Homes plc and Mr Whiteman is a standard form sale and purchase agreement used by the Company on its developments, save that as Mr Whiteman's purchase of his apartment is for a value in excess of GBP100,000, it is conditional upon the agreement of shareholders which will be sought at the Annual General Meeting in September 2016. Mr Whiteman paid a ten per cent deposit of GBP65,000 on exchange of contracts which will only be returned to him in the event that shareholders do not approve the transaction.
Director property purchases previously disclosed and not yet completed, which have all received shareholder approval, include:
-- Mr G J Fry - purchases of an apartment at Sovereign Court for GBP819,950 in 2014 and Brewery Wharf for GBP565,000 in 2015;
-- Mr R C Perrins - purchase of an apartment at 190 Strand for GBP2,100,000 in 2013; and
-- Ms D Brightmore Armour - purchase of an apartment at 190 Strand for GBP2,985,000 in 2014 along with a storage room at the property for GBP101,200 in 2015.
During the year Mr R C Perrins paid a contractual deposit on account of GBP210,000 and Ms D Brightmore Armour paid contractual deposits on account of GBP286,000 for the apartment and GBP10,120 for the storage room. These were in addition to contractual deposits paid in previous years. During the year, Mr G J Fry paid an additional GBP17,043 for enhancements to specification in relation to his apartment at Sovereign Court and GBP23,770 for enhancements to specification in an apartment already owned at Chelsea Creek. At 30 April 2016, any contractual deposits due to date had been paid to the Group, there were no current balances outstanding and the properties were still under construction and so the sales had not yet completed.
Transactions with Joint Ventures
During the financial year there were no transactions with joint ventures other than movements in loans. In 2009 inventory was sold to St Edward Homes Limited for GBP17,411,000 being the share of the transaction attributable to the other venturer in the joint venture. At 30 April 2016 an amount of GBP8,091,000 was outstanding and included within trade receivables (2015: GBP14,449,000).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FIMRTMBIBBIF
(END) Dow Jones Newswires
June 15, 2016 02:00 ET (06:00 GMT)
1 Year Berkeley Chart |
1 Month Berkeley Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
