Interim Results - Part 1

Berkeley Group Holdings (The) PLC
07 December 2007

                        The Berkeley Group Holdings plc


PRESS RELEASE                                                  7TH DECEMBER 2007


                          INTERIM RESULTS ANNOUNCEMENT

    NET CASH OF £112.7 MILLION - AN INCREASE OF £31.7 MILLION IN THE PERIOD

2008 B SHARE OF £2 PER SHARE APPROVED FOR PAYMENT ON 4TH JANUARY 2008 AT A COST
                  OF £242 MILLION - ONE YEAR AHEAD OF SCHEDULE

                         FORWARD SALES OF £1.45 BILLION

The Berkeley Group Holdings plc ('Berkeley' or 'the Group') - the urban
regenerator and residential property developer - announces its unaudited interim
results for the six months ended 31st October 2007. Highlights of the results
include:

 • Return of Capital      £241.6 million (£2 per 2008 B share) approved for
                          payment on 4th January 2008 - one year ahead of 
                          schedule. Shareholder approval obtained at AGM to 
                          accelerate final (2010) B share to a date to be
                          determined by the Board but not later than 
                          31 January 2011

 • Operating Profit       £94.7 million (21.5% operating margin) - Up from £70.4
                          million (18.5%) in the corresponding period last year

 • Net Cash               £112.7 million - Up from £81.0 million at the year-end 
                          (30th April 2007)

 • Land Holdings          31,307 plots - Up from 30,128 at the year-end

 • Forward Sales          £1,452.9 million - Up from £936.3 million at the 
                          year-end

 • NAVPS                  705 pence - Up from 649 pence at the year-end


                                   October 2007     October 2006
                                      £'million        £'million
                                    (unaudited)      (unaudited)
                                   ____________     ____________
Continuing operations
Group Revenue                             441.4            381.2       +15.8%
                                   ____________     ____________
Operating Profit                           94.7             70.4       +34.5%
Net Finance (Costs) / Income              (2.6)              5.0
Joint Venture Results (after tax)         (1.5)              6.1
                                   ____________     ____________
Profit Before Tax                          90.6             81.5       +11.2%
Tax                                      (27.2)           (21.6)
                                   ____________     ____________
Profit After Tax                           63.4             59.9        +5.8%
                                   ============     ============
EPS - Basic                               52.6p            49.8p        +5.6%
EPS - Diluted                             52.5p            49.6p        +5.8%
ROCE (excluding profit on                 25.8%            26.3%
disposal)


Commenting on the results, Managing Director, A. W. Pidgley said:

'I am pleased to report another set of strong results continuing the pattern
since the current strategy was put in place with the Scheme of Arrangement in
2004. In addition to the excellent operating performance, Berkeley closed the
period with forward sales of £1.45 billion, net cash of £112.7 million and a
land bank of over 31,000 plots, so placing the Group in a position of real
strength for the future.

Berkeley's strategy is founded on the Board's belief that the business has a
natural size and is not scaleable in a traditional sense due to the complexities
of developing and delivering sustainable mixed-use urban regeneration schemes
and the cyclical nature of residential development.

It is this strategy, combined with the strength of the Group's balance sheet,
that afford Berkeley the time to optimise the value of its land holdings through
a considered and innovative approach to land acquisition and development, as
opposed to a primary focus on the income statement, that maximises returns for
shareholders.

From this strong position, Berkeley is uniquely placed to respond to the market
conditions initiated in the credit markets that currently prevail. We believe
that the fundamentals of the housing market in London and the South East remain
strong. Demand continues to outstrip supply, interest rates remain at
historically low levels, and benefited from yesterday's decision by the Bank of
England to reduce rates by a quarter per cent, and London - a World City in
every sense - continues to attract investment and employment. In competitive
markets, customers become more discerning and this provides an environment in
which the best will thrive. Through identifying individual strategies for each
of our sites which match supply with demand, never compromising on quality
through a relentless attention to detail and by acquiring land on an
opportunistic basis, Berkeley's strategy, with its London and South-East focus,
is uniquely suited to the prevailing market conditions.

Berkeley's business model is a truly sustainable one and I am delighted that the
hard work of our people to put Berkeley at the forefront of the sustainability
agenda in our industry has seen the Group recognised through its first place
ranking in the NextGeneration(1) Housing Benchmark.

Planning remains a major challenge for Berkeley as it does for all developers.
We welcome the Government's undoubted ambition for increasing the supply of
housing and simplifying the planning process. However, the benefits of this are
yet to show through on the ground where there is often conflict between
national, regional and local government and the numerous other stakeholders
which results in applications invariably going to appeal, even after extensive
consultation. In this environment, I am therefore delighted that we achieved a
number of consents in the period, including 798 homes at Stanmore, obtained at
appeal, and 311 homes in Cirencester.

(1) NextGeneration is a combined initiative supported and directed by The
Housing Corporation, WWF-UK and Insight Investment launched to build on the
previous benchmarking of the UK listed home builders by these organisations. The
2007 Housing Benchmark rates the top 20 UK home builders in terms of both
reporting and performance on sustainability issues.



Victoria Mitchell, Chairman said:

'In my first announcement as Chairman, I am delighted to confirm the
acceleration of the 2008 B share of £2 per share for payment on 4th January
2008, five business days after the record date of 27th December 2007. The
acceleration of this payment, one year ahead of schedule, is testament to the
successful execution of Berkeley's strategy over the last three years and I am
delighted that shareholders continue to show their support for Berkeley and its
management team as demonstrated at the Annual General Meeting held in September.

Since becoming Chairman in August, I have welcomed the opportunity to meet more
of the people at Berkeley who work so hard to keep the Group at the forefront of
the regeneration of our towns and cities. I have found this an inspiring
experience as Berkeley's people truly are remarkable in their commitment,
enthusiasm and innovation for delivering the complex regeneration schemes for
which Berkeley is renowned. On behalf of the Board and shareholders, I would
like to thank them all for their outstanding contribution to these results. In
doing so, I am delighted that, once again, Berkeley has topped its peer group in
the recent prestigious Management Today 'Most Admired Companies' league,
achieving 11th place overall. The criteria used in the poll, which asks the 10
largest public companies in 22 sectors to evaluate its peers, ranged from the
quality of management to the ability to attract, develop and retain top talent.'

Results

Berkeley is delighted to announce a pre-tax profit of £90.6 million for the six
months ended 31st October 2007. This is £9.1 million more than the £81.5 million
reported for the same period last year, an increase of 11.2%.

Three principal factors have contributed to this £9.1 million increase. First,
operating profit has increased by £24.3 million due to strong trading in the
underlying business and the inclusion of St James as a fully consolidated
subsidiary for the first time. Secondly, there is a consequential reduction in
the Group's share of post tax results from joint ventures, to which St James
contributed £6.1 million last time, and which this time shows a loss of £1.5
million, a net reduction of £7.6 million. Thirdly, net finance costs are £2.6
million in the first half of the year compared to interest income of £5.0
million in the corresponding period last time - a movement of £7.6 million.

Basic earnings per share are 52.6 pence, an increase of 5.6% on the 49.8 pence
reported for the same period last year. The 5.6% increase in earnings per share
is lower than the 11.2% increase in profit before tax due to the inclusion of
the post tax share of joint venture results in profit before tax.

Since the year-end, total equity has increased by £69.3 million to £850.9
million (April 2007 - £781.6 million) and net assets per share by 56 pence
(8.6%) from 649 pence to 705 pence.

At 31st October 2007, Berkeley had net cash of £112.7 million (April 2007 -
£81.0 million) after generating £31.7 million of cash flow in the six months.

Return on Capital Employed for the period was 25.8% compared to 26.3% last time.

Berkeley held forward sales of £1,452.9 million at 31st October 2007. This is an
increase of 55% on the £936.3 million at the year-end. It has always been
Berkeley's strategy to sell homes at an early stage in the development cycle,
often off-plan, to secure customers' commitment and ensure the quality and
certainty of future revenue and cash flow. The increase at the half-year is due
to Berkeley fully capitalising on favourable prevailing market conditions in
London during the period and includes the disposal to an investor of the
remaining 355 units at St James' scheme at Grosvenor Waterside in London.

At 31st October 2007, Berkeley's land bank had increased from 30,128 plots at
the year-end to 31,307 plots, with an associated gross profit of £2,661 million,
up from £2,234 million at the year-end.

Scheme of Arrangement and Strategy

In June 2004 Berkeley announced its proposals to return £12 per share to
shareholders in conjunction with its future strategy to focus on its urban
regeneration business. This was approved by shareholders and effected by a Court
approved Scheme of Arrangement in October 2004 which created four tranches of B
shares. To date, and in line with the original payment schedule, £7 per share
has been returned to shareholders.

With its results for the year ended 30th April 2007, the Board announced its
intention to seek approval at its Annual General Meeting on 5th September 2007
to accelerate the payment of the 2008 B share (£2 per share) by 12 months to the
beginning of January 2008 and to pay the final (2010) B share of £3 per share at
a date to be determined but no later than the original scheduled date of January
2011.

The Board received support for this proposal from over 98% of shareholders
voting at the AGM and is delighted to confirm that it has now formally approved
the redemption of the 2008 B shares to take place on 4th January 2008 for £2 a
share, five business days after the record date of 27th December 2007. The cost
to Berkeley of this redemption will be £242 million and will bring the total
value of B shares redeemed to date to £1,088 million (£9 per share) in a little
over three years. This leaves the 2010 B share of £3 per share to be redeemed
and it remains the intention of the Board to accelerate payment of this ahead of
its January 2011 scheduled payment date.

The acceleration of the B share payments has been possible through Berkeley's
relentless and successful execution of its strategy, founded on the Board's
belief that the business has a natural size and is not scaleable in a
traditional sense due to the complexities of developing and delivering
sustainable mixed-use urban regeneration schemes and the cyclical nature of
residential development.

It is through optimising the value of its land holdings through a considered and
innovative approach to land acquisition and development, as opposed to a primary
focus on the income statement, that shareholder value is maximised. It is this
ability to successfully combine an entrepreneurial approach to land acquisition
and creating new sustainable communities with a highly disciplined construction
and selling process that makes Berkeley different, and able to deliver the
inspiring communities that we, our customers and all our stakeholders demand.

Looking to the future, the Board was also delighted to receive approval at the
AGM for its future strategic proposals and the associated alignment of its
remuneration policy which will see the key features of the Scheme of Arrangement
replicated to preserve the environment in which Berkeley and its entrepreneurial
management team has thrived in recent years. As a result, following the
completion of the £12 per share Scheme of Arrangement payments, the Board is
proposing to make annual dividend payments at a cover ratio of less than 2
times. This will ensure shareholders continue to see immediate benefit from the
Group's strategy, while allowing the Board to maximise short term opportunities
under an unambiguous long term strategy.

Housing Market

In the six months ended 31st October 2007, London continued to provide a
favourable environment for Berkeley to operate within. Outside London, the
market has been satisfactory for well conceived schemes in the right location.

In this market Berkeley's continued focus on the quality of its product, the
location of its developments and its pricing strategy, rather than the pursuit
of volume growth, has proved successful, enabling the Group to match supply and
demand effectively and fully optimise returns. Berkeley has ended the period
with an exceptional forward sales position of £1,452.9 million, up 55% on the
year-end position. This includes the sale of the remaining 355 units at
Grosvenor Waterside. If this sale is excluded, Berkeley has secured underlying
sales reservations with a sales value broadly in line with the previous 12
months.

One cannot ignore the current tightening of the credit markets as this
inevitably has an impact on consumer confidence and the all important
'feel-good' factor. However, the economic fundamentals remain strong with demand
outstripping supply, high levels of employment and interest rates at
historically low levels, which benefited from yesterday's decision by the Bank
of England to reduce rates by a quarter per cent. Equally important is London's
unique allure as a World City and global financial centre. It is too early to
determine the extent to which there will be an impact on the housing market and
Berkeley is certainly not immune to any downturn that may materialise. However,
it is well placed through its London market position and strong forward sales to
perform in whatever market conditions prevail.

Investors remain an important segment of Berkeley's customer profile and have
accounted for approximately 50% of underlying sales reservations in the period.
This is very much in our range which fluctuates due to market conditions, the
mix of product and the phasing of launches on our sites. Investors are attracted
by the fundamentals underpinning the housing market in London and the South-East
and the lack of alternative investment opportunities.

Sales prices achieved in the period have been above our business plan forecasts
and continued to cover cost increases which come from the costs and the
technical challenges presented by today's high standards of environmental and
sustainable development practices as well as materials prices, particularly
where global demand is exceeding supply. Labour costs are currently stable, due
in part to supply from the European Union, but may come under pressure as
construction progresses on the 2012 London Olympics site.

The most significant cost pressure on the business comes from the costs required
to achieve planning consents due to increasing section 106 contributions,
including affordable housing requirements, and the complexities of the planning
system. Berkeley welcomes the Government's decision to withdraw its initial
proposals for a Planning Gain Supplement in favour of local contributions and,
more generally, its undoubted ambition to increase the housing supply though the
simplification and stream-lining of the planning process. Unfortunately, our
experiences on the ground indicate that the benefits of this are yet to bear
fruit and planning consents continue to take over a year, and in many cases, two
years, to agree. There frequently seems to be a conflict between national,
regional and local government as well as the disparate agendas of other
stakeholders. In this environment, even after extensive consultation, it is
often only at Appeal that planning consents are finally obtained.

In broader terms, the principal business risks and uncertainties facing Berkeley
for the first six months and the remaining six months of the financial year
remain the same as those set out on page 21 of the Annual Report for the year
ended 30th April 2007.

Sustainability

Berkeley has long recognised the importance of sustainability to its business -
indeed long before it became the recognised term it is today. It is not simply
the 'right thing to do' and Berkeley has never viewed it as such. Accordingly,
Berkeley operates a business model that is sustainable in every sense. From the
recycling of brown-field land, through the careful planning and efficient use of
that land, the use of modern environmental materials and construction
methodologies to the creation of homes and communities that allow our customers
to live the sustainable lives to which they now aspire, Berkeley is a true
innovator and leader in its field. This commitment to sustainability provides a
competitive advantage in the market place and helps meet the demands of our
stakeholders.

In October Berkeley announced the launch of seven key commitments to further
increase the sustainability of its homes and business operations. These included
the commitment for all sites seeking planning permission after 1 January 2008 to
certify all new homes to Level 3 of the Code for Sustainable Homes for
Sustainable Commitments and commitments to meet stretching targets for the
reduction of carbon, water usage and landfill waste. These are the first
commitments from a major house-builder to exceed current Government
sustainability targets, receiving praise from the Minister for Housing for this
leadership position, and were one of the factors that resulted in Berkeley
achieving first place ranking in the NextGeneration Housing Benchmark.

Trading Analysis

Revenue for the Group was £441.4 million (2006 - £381.2 million). This comprised
£422.1 million (2006 - £375.3 million) of residential revenue, of which £13.1
million was from land sales (2006 - £3.2 million), along with £19.3 million
(2006 - £5.9 million) of commercial revenue.

During the period, the Group sold 1,630 units at an average selling price of
£245,000. This compares with 1,296 units at an average selling price of £284,000
in the same period last year. The reduction is due to mix and is forecast to
reverse in the second half of the year with the average selling price for the
full year expected to be similar to that achieved in the last full year.

At £19.3 million (2006 - £5.9 million), the Group's revenue from commercial
activities represents the disposal of commercial units on ten mixed-use sites.
The most significant of these was the disposal of a 220 bedroom four-star hotel
at Chelsea Bridge Wharf in London.

Excluding joint ventures and land sales, the house-building operating margin for
the Group was 21.8% compared to 19.5% for the full year ended 30th April 2007.
This is above the long-term historic range of 17.5% to 19.5% range (depending on
mix) reported by the Group over recent reporting periods and reflects the
favourable market conditions in London during the period.

Net operating expenses have increased by £7.3 million to £46.7 million since
last time and this is principally due to the inclusion of St James in the
results as a fully consolidated subsidiary this time.

Net finance costs of £2.6 million compare to net finance income of £5.0 million
last time. The £7.6 million movement is due to three factors. First, average net
cash balances have been lower in the first six months of the year, compared to
the same period last year, following the 2006 B share payment and the acquisi
tion of the 50% of St James not already owned in the second half of last year,
offset by the cash generated in the last 12 months, resulting in a £2.6 million
reduction in finance income; secondly, a £2.8 million increase in the finance
cost resulting from the unwinding of the discount on deferred land payments in
accordance with IAS 2; and thirdly, £1.7 million of finance costs associated
with the refinancing of the Group's bank facilities during the period. This
re-financing was completed on 6th July 2007 and increased the Group's facilities
from £575 million to £800 million.

The Group's share of post-tax results from joint ventures was a loss of £1.5
million and compares to a profit of £6.1 million last time which related to St
James, our then joint venture with RWE Thames Water plc. With the acquisition of
the 50% of St James not already owned in November 2006, its results are now
fully consolidated. Both St Edward Homes, Berkeley's joint venture with
Prudential, and the Group's new joint ventures with Saad Investments Company
Limited are in the start up phase with sites in the planning pre-production
stage and this is the reason for the £1.5 million loss in the six months.

Land Holdings

At 31st October 2007, the Group (including joint ventures) controlled some
31,307 plots with an estimated gross margin of £2,661 million. This compares
with 30,128 plots and an estimated gross margin of £2,234 million at 30th April
2007. Of these holdings, 22,463 plots (April 2007 - 21,209) are owned and
included on the balance sheet. In addition, 8,785 plots (April 2007 - 8,848) are
contracted and a further 59 plots (April 2007 - 71) have terms agreed and
solicitors instructed. Over 95% of our holdings are on brown-field or recycled
land.

Berkeley agreed nine new sites in the period and continued to submit new
planning applications on its development sites where appropriate and optimise
its land holdings.

The new sites include the first site acquired by Saad Berkeley Regeneration
Limited, one of the new joint ventures established with Saad Investments Company
Limited at the end of last year. These new joint ventures enable Berkeley to
invest up to £175 million over an expected 10 year investment period which,
together with Saad's investment and external bank debt at a target equity to
debt ratio of 30:70, envisage a fund of approximately £1 billion to be available
to take advantage of land opportunities as they present themselves.

It is pleasing that a detailed planning application has been submitted on Saad
Berkeley Limited's 300 unit site at Fleet, which was initially acquired under
option a number of years ago and which obtained an outline planning consent in
the last financial year.

2,200 of the contracted plots are on the three St Edward sites and we are
delighted that St Edward has received a planning consent for 798 units at
Stanmore in North London. St Edward is Berkeley's joint venture with Prudential
and we are working on a number of other exciting opportunities with our joint
venture partner, which we hope will come to fruition over the next 12 months.

Last year, Berkeley reported the growing importance of our partnerships with
local authorities for the regeneration of our towns and cities and we are
delighted to add Dickens Yard in Ealing town centre, which we will develop in
partnership with the local authority and comprises 698 new homes and
approximately 109,000 ft2 of commercial space, to this portfolio. When added to
Berkeley's other local authority sites at Woodberry Down in Hackney and
Kidbrooke in Greenwich, these three sites account for some 5,500 of the
contracted plots and represent an important element of Berkeley's land supply.
Given their size and complexity, they do of course take time to come through
into production.

The land bank has also benefited significantly from the strong London market
with a number of sites being reassessed in the period to reflect their unique
nature and the premium that is being generated in this market for prime London
locations.

The Group's land holdings include approximately 1.5 million ft2 of commercial
space within our mixed-use schemes. The Group is not undertaking any standalone
commercial schemes.

Board Changes

As announced in June, Roger Lewis retired from the Board of Berkeley on 31st
July 2007 after 16 years with the Group,  the last eight as Chairman.  Also
retiring from the Board in the period was Tony Palmer, a Non-executive Director
for  nine years and, at the point of his retirement, the senior independent
director.  The Board would like to thank both  Roger and Tony for their
outstanding contributions to Berkeley over the years.

Victoria Mitchell, already a Non-executive Director of Berkeley, replaced Roger
Lewis as Chairman on 1st August and  David Howell, a Non-executive Director
since February 2004, succeeded Tony Palmer as the Senior Independent Director on
Tony's retirement at the AGM on 5th September 2007.

On 1st October 2007 the Board was delighted to welcome John Armitt as a new Non-
executive Director.  John is currently  Chairman of the Olympic Delivery
Authority and Chairman of the Engineering and Physical Science Research Council.
From  2001 to 2007 he was Chief Executive of Network Rail and its predecessor,
Railtrack. A civil engineer by training, he  was previously Chief Executive of
Costain and Union Railways and has a wealth of experience and expertise which
will be  of significant benefit to Berkeley.

The appointment also ensures that the Main Board of Berkeley complies with the
Combined Code's recommendations  regarding the balance of the Board, which now
comprises a Chairman, four Executive Directors and four Non-executive 
Directors.

Our People

These results once again demonstrate the exceptional qualities of Berkeley's
people. As the complexity and ambition of our business increases, so do the
challenges we place upon our people. To deliver the landmark schemes for which
Berkeley is renowned, each one with its own unique characteristics, requires
innovation, rigour and, above all else, boundless enthusiasm and energy. It is
this passion for quality and delivering the best possible solution that sets
Berkeley apart and ensures that our developments are true exemplars of the
sustainable communities we strive to create. By empowering autonomous management
teams, with the support and experience of the Executive team always available to
draw upon, Berkeley has created an environment in which these attributes
flourish.

On behalf of the Board and shareholders, we would like again to express our
continued thanks and appreciation to all those at Berkeley who have contributed
to these outstanding results.

Prospects

These results have clearly demonstrated the success of the strategy put in place
alongside the Scheme of Arrangement in 2004. This has resulted in the strong
balance sheet, record forward sales and unrivalled land bank with which Berkeley
has ended the first half of the year.

Looking at the housing market, the 'feel-good' factor has been impacted by the
current credit conditions and concerns over affordability, but will benefit from
yesterday's decision by the Bank of England to reduce rates by a quarter per
cent. Most importantly, the fundamentals of the market remain unchanged,
particularly in Berkeley's core market of London and the South-East, with a
shortage of supply, historically low interest rates, high employment and
forecast economic growth.

Berkeley's unique operating model allows us to not only seize the short term
opportunities presented by the market, but also gives us the flexibility to
drive the business forward in all market conditions under an unambiguous
long-term strategy with a talented and driven management team.

Having set the business up to prioritise on optimising its land holdings,
maintaining a strong balance sheet and securing future cash flow through forward
sales, as opposed to a principal focus on the income statement, Berkeley is now
in a unique position to take advantage of the prevailing market conditions.

For further information please contact:

The Berkeley Group Holdings plc                     Cardew Group
A W Pidgley                                         Tim Robertson
R C Perrins                                         Sofia Rehman
T: 01932 868555                                     T: 0207 930 0777



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