Apartment block builder Berkeley Group (BKG) confirmed its FY26 pre-tax profit guidance but nudged its FY27 target lower. The shares dropped 2.7% to £36.56, taking losses over the last month to around 18%.
FY guidance maintained
Berkeley, which has an April financial year end, posted a trading update for the four months to 28 February 2026. The group said trading over the period had remained ‘constrained’ by the impact of geopolitics on consumer confidence.
Moreover, the situation in the Middle East was ‘weighing heavily on risk sentiment’. Therefore, while it stuck to its FY26 pre-tax profit guidance of £450 million, it said it was ‘aware of the risk of a further deterioration in macro conditions’.
Nevertheless, H2 sales have been ‘good’ and the value of underlying reservations is recovering towards pre-Budget levels. The firm expects to end the financial year with net cash of £300 million after £191 million of shareholder returns.
Questions over FY27
For FY27, the firm said pre-tax profit was expected to be at ‘a similar level’ to FY26. That implies it will be below the current consensus of £460 million.
The group said it was ‘working hard to counter the challenges we face’, and was reviewing planning consents ‘to enhance and restore margins to the appropriate level to enable moving them into production’.
There was no mention of buybacks in FY27, and beyond FY27 the firm said it would focus on cash generation. Its aim is to ‘maintain a strong balance sheet, the quality of profit in the core business and shareholder returns’.
This looks like a veiled downgrade to FY27 guidance both in terms of earnings and buybacks. If the shares hadn’t already dropped sharply ahead of this update, they might well be down more today.
Interestingly, there isn’t the usual mention of completion targets which suggests visibility remains low. Planning consent still seems a sticking point, especially for apartment blocks under the Gateway 2 process for building control approval.
Consumer confidence isn’t great right now, and conflict in the Middle East isn’t going to help. Moreover, if inflation picks up again, interest rates – and therefore mortgage rates – will stay higher for longer.
Read the press release here: https://www.berkeleygroup.co.uk/investors
You might also like these stories:
