Interim Management Statement

RNS Number : 9308M

Berkeley Group Holdings (The) PLC

02 September 2013

The Berkeley Group Holdings plc
Interim Management Statement
Period from 1 May 2013 to 31 August 2013
2 September 2013

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At the Annual General Meeting of The Berkeley Group Holdings plc ("Berkeley" or "the Group") being held today, the Chairman, Tony Pidgley CBE, will make the following Interim Management Statement which covers the period from 1 May 2013 to 31 August 2013:

"Trading for the period is in line with the Board's expectations, maintaining confidence that Berkeley is well placed to achieve its profit targets, which are in line with market expectations, and to meet the first milestone to return £568 million in cash to shareholders by no later than 30 September 2015.

Market conditions have allowed Berkeley to achieve further growth in forward sales which now exceed £1.5 billion. Sales to the UK domestic market have increased, encouraged by tentative signs of improving consumer confidence and the Government's positive intervention in the housing market through the Help to Buy scheme.

In the period Berkeley has added three sites to its land bank. This includes a 10 acre redevelopment site in White City, a site in Battersea with an existing detailed planning consent for 456 apartments and a scheme in West Sussex, delivered from the Group's future pipeline, for which a consent for 69 new homes was granted in the period. Additionally the Group has contracted to acquire two further sites in London at Southall and Hornsey on conditional terms. These will be added to the Group's future pipeline of mainly long-term regeneration schemes which are characterised by complex challenges surrounding technical constraints, planning and vacant possession. This leaves Berkeley well positioned to grow the future potential gross margin in the land bank to £3 billion by the end of the current financial year.

Planning remains complex and obtaining planning consents involves consulting widely with multiple stakeholders. This causes delays to planning decisions and an inconsistency of approach at a local level, despite the National Planning Policy Framework and the presumption in favour of sustainable development. This remains a hurdle to the industry being able to increase substantially the supply of new homes.

The disposal of 534 rental properties to M&G for £105.4 million in June 2013 has simplified the Group's balance sheet. This has contributed to a strong operating cash inflow over the period as a result of which the Group is currently ungeared and well positioned to balance continued investment in the business with returns to shareholders.

The Board has committed to pay a dividend of 59 pence per share (£77.3 million in cash) on 27 September 2013 to shareholders on the register on 30 August 2013, which will leave 360 pence per share (£471.5 million in cash) to pay to meet the first milestone by 30 September 2015.

As previously announced, Adrian Li is joining the Board as Non-executive Director today. Adrian is currently Deputy Chief Executive of The Bank of East Asia Limited. Alan Coppin has also stepped down from the Board today having served since 2006 and I would like to take this opportunity to thank Alan for his contribution and welcome Adrian to the Board."

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