Housebuilder Berkeley Group reported a slump in annual profits, as the housing sector continues to be weighed down by cost rises and Brexit uncertainty.
Pre-tax profits slipped 20.7% to £775.2 million for the year to April 30, from £977 million the previous year, although it still performed above most analysts’ predictions.
Despite the fall in profits, the company saw an increase in the number of homes sold in the period – up to 3,698 from 3,678 a year earlier.
It also said it saw a jump in the average selling price of its properties, which rose to £748,000 from £725,000.
The high-end developer said it has changed its strategy to focus on more builds in the country, moving away from its London-centric model amid a downturn in the capital’s housing market.
It also said it has branched out into Birmingham over the past year, as it continues to diversify its portfolio. Over the year, Berkeley launched 11 new developments, with eight of these outside of London.
Berkeley also reported an increase in net cash, to £975 million from £687.3 million in the previous period.
In a statement, chairman Tony Pidgley said: “This has been another year of solid performance for Berkeley, delivering financial results ahead of expectations while unlocking an increasingly valuable mix of social, economic and environmental benefits for the communities in which we work.
“I am extremely proud of these results, and the unique operating model which underpins them.”
George Salmon, equity analyst at Hargreaves Lansdown, said: “Despite the fall in profits, trading has been good this year, which is another feather in Berkeley’s cap.
“However, for all the good work, the shares remain relatively depressed due to the lingering threat of no-deal, and until the Brexit fog lifts that’s unlikely to change.”
Shares in Berkeley Group were down by 2.5% to 3,468p in trading on Wednesday morning.