Berkeley Group Overall Sales Reservations up 25%

House Builder Berkeley Group published and Interim Statement this week with a lot of positive details such as 25% increase in reservations and land purchases some of which were discussed previously in this blog back in December see our post Berkeley Group Increases Landbank details of the statement are given below:

The Berkeley Group Holdings plc

Interim Management Statement

Period from 1 November 2010 to 28 February 2011

18 March 2011

The Berkeley Group Holdings plc (“Berkeley”) today announces its Interim Management Statement in respect of the period from 1 November 2010 to 28 February 2011.

Overall sales reservations achieved in the period were some 25% ahead of the comparable period last year and cancellation rates are at historically low levels.  The average numbers of visitors per site since the beginning of the year has been consistent with the same period last year, reflecting the current mortgage market conditions, with an increase in the number of outlets leading to the higher levels of sales overall.

Forward sales currently exceed £800 million, providing confidence to invest in work in progress on our sites.  Build costs remain benign with underlying increases in fuel and commodities offset by excess capacity in the construction sector, although we continue to monitor this closely.   Berkeley’s strategy is aligned to investing during this period in the cycle.  As indicated in December with the release of the interim results, the level of investment in land and work in progress is forecast to result in a net cash outflow in the second half of the year and this is anticipated to continue into the next financial year when Berkeley expects to become moderately geared.

In the period, Berkeley has acquired a further 1,000 plots across 8 new sites bringing the total number of plots acquired in the year to 3,500 across 21 sites.  These include: a site in the City with an existing planning consent for some 750 new homes, a 337-bed hotel, 601 student bedrooms and 100,000 sqft of commercial space; a site in Kensington acquired by St Edward (our joint venture with Prudential) in close proximity to the existing 375 Kensington High Street development; and a number of sites in the Southern Home Counties and Oxfordshire for up to 20 homes each.

Berkeley has also obtained planning on two of its key London development sites in the period.  A planning consent for 752 homes and 140,000 sqft of recreational and commercial space which will include a hotel, gym, spa, bars and restaurants has been received at Tideway Wharf in the heart of the Nine Elms Regeneration Area and a planning consent for One Tower Bridge, a site jointly owned with the London Borough of Southwark, has been obtained for 400 homes, along with 90,000 sqft of cultural and retail space.  In addition, in February 2011, Berkeley announced an agreement to build a new station for Crossrail at its site at Royal Arsenal which will facilitate the delivery of 4,500 new homes and represents a major investment in the regeneration and infrastructure of the area.

The performance of the business over the last four months provides the Board with confidence and Berkeley anticipates reporting earnings at the high end of its expectations for the year ended 30 April 2011 and the investment in work in progress will enable a further growth in earnings in 2011/12 if overall market conditions permit.

 

A full copy of the statement from Berkeley Group can be obtained from their website http://www.berkeleygroup.co.uk/investor-information or the following link Statement Report

 

If you are a house builder and need assistance with your commercial requirements or a subcontractor looking for an introduction to major house builders such as Berkeley Homes then contact Andrew Fella at Onyx Construction Consultants Ltd. Tel:01473 743682 or email andrew.fella@onyxconstruction.co.uk

 

 

Bellway Homes – Interim Statement – Profits up 20%

Things are looking up at Bellway Homes including the number of sites opening and more importantly their profit. With their land buyers looking to buy new land on top of the 1260 plots bought already.

The full report:

Interim Management Statement

7 December 2010

Bellway is today issuing an Interim Management Statement (IMS) relating to the
period from 1 August to 30 November 2010.

As previously reported at the time of our annual results on 19 October,
reservations prior to the announcement of the Government’s Comprehensive
Spending Review (CSR) did not benefit from the usual degree of uplift normally
associated with the housing market in autumn. Since the CSR, however, home
reservations taken are ahead of the Board’s expectations, although still
slightly down compared with the same period last year. The decline in consumer
confidence appears to have levelled out and encouragingly, people are still
committing to purchase even at this time of year.

The Group currently has 3,614 sales (2009 – 3,486) secured for this financial
year and a further 400 (2009 – 598) for the next financial year. The average
selling price for all these sales is £167,600 which is 8.4% ahead compared to
this time last year, mainly as a result of the continuing change in product
mix. The Board anticipates that unit completions in the six months to 31
January 2011 will be similar to last year, albeit at a slightly higher average
selling price and that net profit before tax will rise by up to 20%.

Our divisions are gradually increasing investment in new site openings and it
is anticipated that the number of selling outlets will increase from 185 to
around 200 in early 2011. Having completed the acquisition of 1,260 plots in
the period and still maintaining a net cash position, the balance sheet remains
robust. The Group’s land teams are actively looking to secure further
opportunities at attractive margins and the divisions are concentrating on
bringing newly acquired sites to the market as quickly as possible to underpin
the operating margin going forward.

The outcome for the year to 31 July 2011 will be greatly dependent on the level
of consumer confidence during the 2011 spring selling season. This, in turn is
reliant on a reasonable supply of affordable mortgages combined with sensible
lending criteria.

The Board believes it is currently well positioned in what continues to be a
tough and testing market for UK housebuilding.

Berkeley Group Increases Land Bank

As Part of its Interim Statement  issued last Friday 3/11/2010 the Berkeley Group gave details of its increased land bank, including traditional sites (one assumes not classed as brown field) in St Albans, Oxford and Horsham. Other sites acquired as their report suggests are in Prime London locations.

An Extract of the Land Section of the Interim statement is given below:

Land Holdings

 At 31 October 2010, the Group (including joint ventures) controlled some 28,914 plots with an estimated gross margin of £2,301 million.  This compares with 28,099 plots and an estimated gross margin of £2,038 million at 30 April 2010. Of the total 28,914 plots, 28,647 plots (April 2010: 27,094) are owned and included on the balance sheet.  In addition, 226 plots (April 2010: 935) are contracted and 41 plots (April 2010: 70) have terms agreed. In excess of 95% of our holdings are on brown-field or recycled land.  

The increase in the land bank is a result of new land acquisitions in the period which has seen Berkeley agree 13 new sites, covering some 2,500 plots.  These new sites include prime London sites in Westminster and on Hammersmith Embankment, traditional sites in St Albans and Oxford and a site in Horsham for over 1,000 units acquired through strategic land in its long-term pipeline. All of the sites agreed are in excellent locations in London and the South East with strong underlying demand for quality new homes where Berkeley can create vibrant new communities and enhance value through its development expertise. 

In addition to the 28,914 plots in its land bank, and after accounting for the transfer of the site at Horsham acquired in the period to the land bank, Berkeley continues to have approximately 10,000 plots in its long-term pipeline, which it envisages delivering over the next ten years.  This includes the latter phases of Kidbrooke and Woodberry Down, strategic land and a number of sites being worked up within St Edward Homes, Berkeley’s joint venture with Prudential.  Of a more long-term nature; Berkeley hopes these sites will come through into the land bank but they currently have an uncertain outcome due to planning policy or vacant possession issues.

In terms of planning, Berkeley entered the year having achieved new or revised planning consents on 38 of its sites in the run up to the May Election.  It is therefore very pleasing to have had a number of further notable successes in the first half of this year.  These include sites in Belgravia, Westminster, Greenwich, Roehampton and Oxford, and revised consents for schemes in Battersea and Acton and the second phase of the student scheme being developed in Clapham for Imperial College.  Through the ongoing re-planning and re-assessment process, the land bank includes a net reduction of approximately 400 plots due to a combination of re-planning densities and increasing individual unit sizes and removing plots that are no longer commercially viable. 

St Edward Homes accounts for some 1,400 plots in the land bank across three sites.  These include: Stanmore Place, where the first phase is selling well and development on later phases progressing and 375 Kensington High Street, which has been successfully launched to the market and where demolition work has begun.  In addition, Berkeley continues to work with Prudential to identify further sites to which St Edward Homes can add value and three of these are in the long-term pipeline.

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