Berkeley Group Holdings (The) PLC COVID-19 Trading Update (8575H)
March 27 2020 - 5:20AM
UK Regulatory
TIDMBKG
RNS Number : 8575H
Berkeley Group Holdings (The) PLC
27 March 2020
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
27 March 2020
THE BERKELEY GROUP HOLDINGS PLC
COVID-19 Update
The Berkeley Group Holdings plc ("Berkeley" or the "Company")
today announces how it is responding to the COVID-19 virus.
Berkeley is the country's leading place-maker, operating
principally in London, Birmingham and the South of England. We
create beautiful, successful places where communities thrive and
where people of all ages and backgrounds enjoy a great quality of
life.
Operations
The health and safety of our people, subcontractors and
customers is Berkeley's first priority. During the course of the
Coronavirus crisis we have operated in accordance with Government
and Public Health's Guidance, modifying our working practices to
observe social distancing protocols, to continue many of our site
activities.
However, our supply chain is experiencing understandable and
increasingly considerable challenges in maintaining the delivery of
materials to site. Therefore, we are now progressively managing the
safe, temporary suspension of work on developments where this is
the case. This will take time to achieve as critical in-progress
works are brought to the stage where they can be safely suspended
and secured.
We are focusing our efforts on completing a number of private
and affordable homes which are close to handover and which many
customers, across all tenures, will still need us to finish. Our
site teams will continue to deliver these remaining essential works
safely, and in-line with the Government's social distancing
guidance.
The significant majority of our office-based staff are working
from home and we have closed our sales centres and show homes.
We would like to record our thanks to all our staff,
subcontractors and supply chain who have worked, and continue to
work, tirelessly to meet our commitments to our customers in a safe
manner in these unprecedented times.
Profit Guidance and confirmation of sustainability of
Shareholder Returns
Due to this significant disruption, which affects the final six
weeks of Berkeley's financial year, we now anticipate profits for
the year ending 30 April 2020 will be in the region of GBP475
million, based upon a number of operational assumptions. Prior to
the escalation of the disruption from COVID-19, Berkeley was on
track to meet the Market's profit expectations for the year.
We are suspending future guidance until there is greater clarity
of the impact of COVID-19 on business and the wider economy beyond
30 April 2020. Our priority is to maintain the dividend and deliver
a pre-tax return on equity of 15% over the next six years, which
the Board believes is the appropriate risk-adjusted target return
across the cycle for Berkeley.
The dividend of 99.32 pence per share (GBP125 million),
announced in the Company's 12 March Trading Update, will be paid to
shareholders on 31 March 2020. The Board also confirms its
intention to make the next GBP140.1 million shareholder return by
30 September 2020 through a combination of share buy-backs and
dividend (GBP6.0 million of which has already been met through
share buy-backs) and that it will reassess the position with regard
to the postponed enhanced capital return when the Company announces
its full year results for the year ended 30 April 2020.
Financial Strength
Financial strength and the recognition of the risks and cyclical
nature of its activities has always been at the heart of Berkeley's
business model. The Group currently has in excess of GBP1.0 billion
of net cash, after payment of the GBP125 million dividend to be
paid on 31 March 2020. Including bank facilities, Berkeley has
total potential liquidity of GBP1.75 billion.
END
For further information please contact:
The Berkeley Group Holdings plc Novella Communications
R J Stearn Tim Robertson
T: 01932 868 555 T: 020 3151 7008
The person responsible for arranging for the release of this
announcement on behalf of Berkeley is Richard Stearn, Group Finance
Director.
LEI: 2138009OQSSLVVHQAL78
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END
UPDUBAKRRAUOURR
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