Berkeley shares rise following lift in full-year profit

Shares in property stock Berkeley Group rose 8.61% on the news it posted a 42% rise in full-year pre-tax profit.

Berkeley Group shares, which closed at 3,158p on Tuesday, were at trading at 3,434p at 9:09 on Wednesday.

When announcing a 42% rise in full-year pre-tax profit the company said the housing market is stable but sounded a note of caution over the EU referendum.

Pre-tax profit for the year ended 30 April came in at £539.7m from £380m, as revenue jumped 30.8% to £2.12bn from £1.62bn.

The developer, which builds about 10% of all new homes in London, posted adjusted earnings per share of 263.6p, up 18.8% from 221.8p the year prior.

Berkeley announced a further interim dividend of 90p per share payable in September 2015 to complete the first milestone payment of 434p per share.

The company said domestic demand was strong in its core markets of London and the south of England, and the developer has experienced sales price increases in line with those reported in the wider market.

Chairman Tony Pidgley said Berkeley chose sites which were complex and others might view as too risky, which created added value returns.

Pidgley said while the recent general election had brought stability, but warned that upcoming mayoral elections and uncertainty over Britain’s role in the Eurozone could impact business.

“Berkeley is a supporter of the UK remaining in Europe as this is the best way for London to remain a world city," said Pidgley. "There is no doubt, however, that for business to thrive, we must not be bound by over-regulation, be this from our own government or from Europe."

Shares Berkeley group were at 3,158p when the market closed on Tuesday.