Berkeley is a ‘buy’ on 42% profit rise

17th June 2015


As Berkeley Group reports its full year results, Graham Spooner, investment research analyst at The Share Centre, explains what they mean for investors…

“This morning, UK based residential house building company Berkeley Group announced its strong full year results. With profits up 42% to £539.7m, the group follows in the footsteps of other companies in its sector and beats analysts’ expectations.

“Berkeley has a strong London and South East focus where demand for its properties is high. The developer currently builds about 10% of all new London homes. Although the group admitted uncertainty as to whether this will continue in future, a stable new government could keep demand consistent. Those interested in the EU debate should also note that the group’s CEO supports the UK’s membership of it and is publically pro-Europe and has cautioned over the future outcome.

“Current investors will appreciate that a further 90 pence dividend has been revealed. This will complete the group’s first capital repayment plan of 434 pence per share. For reasons such as these, along with the market’s current good condition, we recommend Berkeley as a ‘buy’ for medium risk investors seeking income.”

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