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Berkeley reports resilient H1 profits, strong cash and reaffirms FY26 guidance, showcasing its disciplined strategy to navigate market headwinds.
This article covers information on Berkeley Group Holdings (The) PLC.
LON:BKGBerkeley Group has turned in a resilient first half. Pre-tax profit came in at £254.0 million for the six months to 31 October 2025, with operating margin nudging up to 20.8%. Net cash closed at £342 million despite £132 million of buy-backs, and net asset value per share rose 4.7% to £37.63.
Management reaffirmed guidance for full-year FY26 pre-tax profit of £450 million and flagged a “similar level” for FY27. In short: delivery is matching the plan, even as reservations softened ahead of the Budget and the regulatory backdrop remains heavy.
| Metric | H1 FY26 (to 31 Oct 2025) | H1 FY25 | Change |
|---|---|---|---|
| Revenue | £1,179.5m | £1,278.9m | -7.8% |
| Operating margin | 20.8% | 20.2% | +0.6 pp |
| Profit before tax | £254.0m | £275.1m | -7.7% |
| Basic EPS | 183.7p | 186.8p | -1.7% |
| Homes delivered | 2,022 (plus 82 in JVs) | 2,103 (plus 177) | Lower |
| Balance sheet & order book | 31 Oct 2025 | 30 Apr 2025 | Change |
|---|---|---|---|
| Net cash | £342m | £337m | +£5m |
| NAV per share | £37.63 | £35.95 | +4.7% |
| Cash due on forward sales | £1,137m | £1,403m | -£266m |
| Future gross margin in land holdings | £6,512m | £6,722m | -£210m |
| Pipeline plots (approx.) | 14,000 | 12,000 | +2,000 |
Legal completions ran ahead of reservation rates, with management noting 56% of full-year pre-tax profit guidance delivered in H1. That gives a decent buffer for H2. The order book has reduced – cash due on forward sales fell to £1,137 million – but pricing is slightly ahead of business plan levels set at the start of the year.
In my view, this is a classic Berkeley playbook: protect cash, focus on margin, and pace delivery to demand. It helps that operating costs were 6% lower year-on-year and build costs were flat thanks to competitive tendering.
Customer interest was “good”, but the value of private sales reservations ended the period around 4% below last year, with a softer final two months ahead of the Budget. Average selling price on completions slipped to £570,000 (2024: £600,000), reflecting mix rather than discounting.
With gilt markets reacting positively post‑Budget and management expecting interest rates to resume their descent, the set‑up for H2 looks better. The risk, as ever, is timing: if mortgage rates fall slower than hoped, sentiment could lag.
Opinion: buying back 3.5 million shares at an average £37.19 when NAV per share is £37.63 is marginally accretive and signals confidence. Management also calls out “dislocation in the share price” and says it will prioritise shareholder returns – a supportive stance for the equity story.
Berkeley secured three notable planning consents – Borough Triangle (890 homes), Hemel Hempstead (485) and Brighton gasworks (480). Two additional conditional sites were added to the pipeline: a 4.5‑acre West London site and a 145‑acre Bromley site. The pipeline rose to around 14,000 plots.
The future gross margin embedded in land holdings dipped to £6.51 billion (from £6.72 billion), partly reflecting profit taken through the income statement and the ever‑present grind of regulation and costs. A key operational pinch point remains the Building Safety Regulator’s Gateway 2 approvals. Any sustained improvement here would be a catalyst for starts and cash conversion.
The in‑house BTR platform now has six buildings transferred, totalling 1,122 homes in production, with the first opening – Foundry Yard at Alexandra Gate, Haringey – due in Spring 2026. The indicative portfolio remains 4,000 homes, backed by £1.2 billion of committed investment within the Berkeley 2035 plan.
Why it matters: BTR introduces an income stream that is attractive to institutional capital. Management has optionality to sell assets, bring in third‑party equity, or layer debt at the asset level. In today’s market of constrained for‑sale absorption, that optionality is valuable.
89% of homes delivered were on brownfield land. Customer metrics remain industry leading (Net Promoter Score +76.9) and the group retained an ‘AAA’ MSCI ESG rating. These won’t move the share price on their own, but they underpin brand strength and planning credibility – both important in London and the South‑East.
Berkeley is doing what it does best: protect the balance sheet, lean into margin, and deploy capital where the risk‑adjusted returns make sense. There are headwinds – slower reservations and regulatory friction – but the combination of net cash, prime London exposure, and the BTR platform gives it ample ways to win through the cycle.
If you want more detail straight from the horse’s mouth, the company’s pre‑recorded presentation is available at 11:00 today here: berkeleygroup.co.uk/investors/results-and-announcements.
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