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Berkeley Group HY Profit Down

Berkeley Group Holdings Plc.(BKG.L), a builder of homes, neighborhoods and communities, reported that its profit after taxation for the six months ended 31 October 2018 decreased to 325.1 million pounds or 240.0 pence per share from 438.4 million pounds or 312.0 pence per share last year.

Pre-tax earnings were 401.2 million pounds for the six month period, a decrease of 25.7% on the equivalent period last year.

Revenue declined to 1.65 billion pounds from 1.66 billion pounds last year. The company noted that 2,027 new homes were sold across London and the South East of England at an average selling price of 740,000 pounds, while 2,190 new homes were sold across London and the South East of England in 2017 at an average selling price of 721,000 pounds.

With the resilient start to the year, Berkeley said it is increasing its pre-tax profit guidance for the current year by at least 5% and now anticipates a similar split between the first and second half to last year when 55% was earned in the first six months of the year. The guidance for the next two years is unchanged.

Berkeley targets a long-term, sustainable pre-tax return on equity of 15%; a return commensurate with the investment required to bring forward the next generation of sites into production, their longevity and relative risk profile, alongside Berkeley's lasting commitment to investing in the wider community benefits that good development brings.

In terms of Shareholder Returns, the company now sees the current quantum of returning 280 million pounds per annum continuing beyond the current formal period, which ends in 2021, to September 2025, assuming there is no material deterioration in the operating environment.

Following the Interim Results, the Remuneration Committee of the Board will consult with Shareholders over a new three year remuneration policy for implementation next year.

Berkeley announced an interim dividend of 7.12 pence per share. This will be paid on 16 January 2019 to all shareholders on the register on 21 December 2018 and will complete the 139.7 million pounds return previously committed to be made by 31 March 2019, the remaining 130.5 million pounds already having been made through share buy-backs.

In addition, Berkeley announced that the next 139.7 million pounds shareholder return will be provided by 30 September 2019 through a combination of dividends and share buy-backs.

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