UK-based The Berkeley Group Holdings PLC (GB:BKG) has maintained its outlook for the year ending on April 30, 2025. This was mainly driven by the company’s steady trading in the first four months of the year. The company stated that it’s on track to meet its pre-tax earnings guidance of £525 million for FY25 and that it has already secured 90% of this amount through exchanged sales contracts. Berkeley shares lost 1.4% as of writing.
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Berkeley is a UK-based housebuilder specializing in redeveloping former industrial sites.
Berkeley Group Poised to Meet Guidance
Berkeley expects its pre-tax profits to be more heavily weighted towards the first half, similar to the previous year. This will result in a higher operating margin, moving slightly above its long-term range of 17.5% and 19.5%.
Moreover, the company projects a net cash of £450 million as of October 31, down from £532 million on April 30, 2024. This is attributed to £229 million in shareholder returns in the first half.
UK Housing Market Undergoes Major Transformation
The UK’s housing market is expected to gain from the first rate cut in over four years last month. Additionally, the new ruling Labour party in the UK announced a major policy shift and aims to build and deliver 1.5 million homes in this session. This move was well-supported by the UK homebuilders, creating a favourable operating environment.
Yesterday, Berkeley’s rival Vistry PLC (GB:VTY) saw a gain of over 7% in its shares after it reported its first-half results for 2024. Vistry reported an 11.1% increase in revenue and a 7% rise in pre-tax profits. The company also noted stable trading in recent months. Vistry believes that it is well-positioned to support the new government’s efforts to tackle the housing crisis.
Is Berkeley Group a Good Buy?
On TipRanks, BKG stock has received a Hold rating based on five Holds, one Buy, and two Sell recommendations. The Berkeley share price target is 5,106.14p, which is 3.32% above the current trading levels.
