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Berkeley plans expansion despite revenue and profit decline

25 Jun 10 House builder Berkeley is planning to expand its landbank despite experiencing falls in profit and turnover for the year ending 30 April 2010.

House builder Berkeley is planning to expand its landbank despite experiencing falls in profit and turnover for the year ending 30 April 2010.

The group posted a pre-tax profit of £110m, down 8.4% on the figure of £120m reported a year ago, and a turnover of £615m, a drop of 12.4% on 2009's £702m.

Operating margin held steady at 17.3% (2009: 17.8%).

Berkeley has net cash of £317m (April 2009: £289m), and £648m of cash due on forward sales (April 2009: £620m).

It has 28,099 land bank plots (April 2009: 30,044), having acquired 2,200 plots across 20 sites in London and the South East during the past year.

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The house builder said it aims to grow its land bank by 10% over the next 12 months.

Chairman Tony Pidgley said: "The housing market in London and the South East has stabilised, albeit at transaction levels lower than we had become used to prior to the turbulent market of the previous two years.

“The land market has begun to yield some attractive opportunities again and, over the course of the year, a growing sense developed that the worst is over with a return to GDP growth.

“Berkeley's strategy is to maximise shareholder value in a sustainable and safe way over the long-term. At present, the Board believes that greatest value will be achieved through land acquisition, investing in work in progress and opportunistic share purchases, as opposed to declaring a dividend."

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