Berkeley a ‘buy’ as strong housing market keeps it on track

18th March 2016


A strong property market means housebuilder Berkeley expects its full year results to be at the top end of expectations.


The company expects to deliver £2 billion of profits over the next three years and to pay a 100p dividend in September, as its Q3 trading update shows it’s on track to meet expectations.


Ian Forrest, investment research analyst at The Share Centre, said strong demand for properties has buoyed the company.


‘However, it also revealed that reservations were 4% lower and transaction levels at the upper end of the market had been affected by the large increase in taxes over the last 18 months,’ he said.


‘Despite this, interested investors should note that the group remains on course to pay a 100p dividend in September, having paid a similar amount in January.’


Forrest added that Q3 results were a ‘mixed update for investors’ but it was reassuring for income-seekers ‘to hear that the company remains on course to deliver £2 billion in profits in the three years to 2017/18’.


‘This should enable it to continue the generous level of dividends,’ he said.


‘We continue to recommend Berkeley Group as a ‘buy’ for medium-risk investors seeking income due to the healthy and fairly secure dividend income, excellent prospects for housing demand in London and the south east and the long track record of delivering for investors.’


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