Berkeley’s earnings lift but it warns of instability

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housebuilder Berkeley posted higher-than-expected earnings yesterday, but warned of political uncertainty ahead due to a referendum on Britain’s membership of the EU due by the end of 2017.

Berkeley, which had previously said it expected to meet full-year expectations, posted a pretax profit of £539.7m in the year through April, above the £470.1m average forecast.

The company said it welcomed the relative political stability promised by the Conservative victory in last month’s national election, a result which led to its shares recording their biggest daily increase in nearly a year and a half.

Shares jumped to a record 3,415 pence shortly after the start of trading.

However, as Prime Minister David Cameron attempts to renegotiate Britain’s EU membership terms ahead of a planned referendum, Berkeley managing director Rob Perrins warned over the looming uncertainty, saying Britain ought to stay in the 28-member bloc.

“For London to be a world city, it has to have influence, it has to remain in Europe,” he said. “Europe adds value in terms of allowing us into the single market.”

Chairman Tony Pidgley added: “We welcome the stability in central government and the commitment to increase housing supply, but political uncertainty remains with the London mayoral election and referendum on Britain’s relationship with Europe on the horizon.”

Berkeley, which operates at the high end of the property market, sold 3,355 homes in the past financial year, down from 3,742 the year before, although that figure included the one-off disposal of 534 properties from a rental fund.

Perrins said he expected volumes to remain roughly the same next year but added the group sees the number of homes it builds increasing by roughly 20 per cent in the year through April 2017.