Berkeley helped by London housing market in first half

House builder Berkeley Group saw revenue and profit surge in the first half, as it declared an interim dividend of 15p per share, compared with nil the year before.

Revenue jumped 69.4% from £404.9 to £686m in the six months to October 31st, as a result of the sale of residential homes across mix-use developments in London and the South East.

The company sold 1,927 new homes during the period, compared with 1,506 in the first half of last year, with the average selling price jumping from £254,000 to £335,000. This substantial increase in prices was down to the increased proportion of homes in London.

Meanwhile profit before tax increased by 40.7% from £101.1 to £142.2m.

The company said that demand for residential property in good locations remained strong in the first half in spite of an uncertain backdrop and economic contraction in the UK this year.

"These results, delivered in an uncertain market, demonstrate the value created by acquiring land at the right point in the economic cycle," said Chairman A W Pidgley.

"The quality of the land bank, enhanced by the planning consents achieved and further investment in construction, means that Berkeley remains on track to return £568m in cash to shareholders by no later than the first milestone date of September 30th 2015."

Pidgley said that Berkeley's strategy has been to focus on London and the South East, "markets which it knows and understands".

He said: "London in particular is a city which remains a world centre of excellence, culture and business, and is central not just to Berkeley but to a recovery in the wider UK economy, and is where we are proud to operate."

The company's net debt stood at just £5.5m at the end of the period, compared with £57.9m at the start of the financial year, as cash inflows surged.