LONDON (dpa-AFX) - The Berkeley Group Holdings plc(BKG.L) reported that its profit after taxation for the six months ended 31 October 2016 grew to 310.5 million pounds or 209.6 pence per share from 227.8 million pounds or 149.2 pence per share in the previous year.
Profit before tax for the period increased 33.9 percent to 392.7 million pounds, from 293.3 million pounds in the prior year. This is from the sale of 2,076 homes (2015: 2,091) at an average selling price of 655,000 pounds (2015: 506,000 pounds), reflecting the mix of properties sold in the year.
Revenue for the period rose to 1.41 billion pounds from last year's 1.14 billion pounds reflecting sale of new homes in London and the South East of England. This included 1.37 billion pounds of residential revenue (2015: 1.07 billion pounds ), 27.2 million pounds from the sale of ground rent assets (2015: 53.4 million pounds), and 13.0 million pounds of commercial revenue (2015: 18.5 million pounds). There were no land sales in the period (2015: nil).
The company announced a new five year target to deliver at least 3.0 billion pounds of profit before tax in the five years beginning 1 May 2016.
In the shorter-term the company said it remains well positioned to deliver its existing earnings guidance for the three years ending 30 April 2018 of some 2.0 billion pounds of pre-tax profits.
The Board of Berkeley has now reviewed the mechanism for making the remaining 10.00 pounds per share payments in light of its assessment that the current short-term macro volatility is preventing the long-term value of Berkeley being recognised by the market.
The Board is proposing to introduce flexibility such that the remaining 10.00 pounds per share payments can be made through a combination of share buy-backs and dividends, as opposed to solely dividends.
At the same time the Board is proposing to introduce flexibility to the Shareholder Returns programme so that future returns can be made by either dividends or share buy backs, as opposed to solely dividends, to the extent the Board believes the prevailing share price materially undervalues the Company and that such purchases would be in the best interests of all shareholders. It remains the intention of the Board to return 2 pounds per share per annum over the next five years under this new mechanism and, for the avoidance of doubt therefore, this is not a reduction in the overall returns allocated to shareholders.
The Board confirms that the next 1 pounds per share, equating to £138.8 million, will be returned by 31 March 2017 with the amount of this to be paid as a dividend to be announced in February, taking account of the cost of any share buy-backs made in the intervening period.
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