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Berkeley Group Holdings Plc, Full Year Update – 13 July 2014 

Company Overview

(Taken from Berkeley Group website)

The Berkeley Group builds homes and neighbourhoods. We focus on creating beautiful, successful places in London and the South East. We work together with other people to tackle the shortage of good quality homes, and make a lasting contribution to the landscape and to the communities we help create.

The Berkeley Group is made up of four autonomous companies: St George, St James, Berkeley and St Edward. We are publicly owned and listed on the London Stock Exchange as an FTSE 250 company.

Berkeley’s business strategy is called Our Vision. This focuses on five key areas: our customers, homes, places, operations and people. Through this framework, we are striving to become a world-class business.

 

Index FTSE 250 Ticker BKGH.L Latest Close 2,376.00
Price Target 2,637.00 52 Week High 2,808.00 52 Week Low 2,003.00
P/E 12.61 Dividend Yield % (Expected) 11 Dividend Cover N/A
CEO: Rob Perrins  CFO:  Nick Simpkin

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June results for the full year ending in April 2014 saw Berkeley Group Holdings Plc announce a year of strong growth across all reporting metrics, in line with many of its industry counterparts. The group reported an uplift of 33.8% in operating profit, driven by higher revenues from sales volumes, which were 10% above their peak at the top of the market in 2007.

Net cash on balance sheet also increased during the period from £44.7 million to £129.2 million. This was while the group maintained its five-year record of providing 10% of London’s new housing. Management also continued to invest in building a strong pipeline of future projects through strategic land acquisitions.

Following the stronger financial performance from the group, earnings per share (diluted) increased by 34.3% to 188.4 pence. While the valuation attached to Berkeley was modest in comparison with that of its peers, the stronger full year performance has now served to reduce the previous multiple from just over 16X 2013 earnings, down to 12.61X full year 2013-2014 EPS.

In relation to dividends, Berkeley Group returned 149.00 pence to shareholders over the course of the year, equating to a yield of 6.28%.

Going forward, management intend to return a further 90.00 pence to shareholders in September 2014, followed by another 180.00 pence throughout the year to September 2015. The total pay-out of 270-pence due over the coming 14 months implies a yield of 11.39 % based upon this morning’s share price.

Taking the group’s exclusive focus upon London property into account, nil debt on balance sheet, a reduced valuation (12.61X) and  exceptional yield, Berkeley Group Holdings Plc shares remain an attractive prospect in our view.

Accordingly, we maintain our pre-existing price targets. In short, we continue to see downside limited at 2,000.00 pence while our medium term price target of 2,637.00 pence remains in place and unchanged.

For further information relating to Berkeley Group Holdings Plc, please see our earlier reports titled: UK Property Part 1 & 2, which are available via the below links.

UK Property Part 1
UK Property Part 2

Berkeley Group Holdings Plc Share Price

Berkeley Group Share Price

 

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