Berkeley shares hit all-time high on higher earnings, dividend

LONDON Fri Dec 6, 2013 6:15am EST

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LONDON (Reuters) - British housebuilder Berkeley (BKGH.L) said its full-year earnings could rise towards the top end of expectations and accelerated a dividend payout to shareholders, sending its share price to an all-time high.

The London-focused developer said its Tower, One St George Wharf scheme on the south bank of the River Thames, which hit headlines in January after a helicopter crashed into a crane on top of the 185 meter-tall block, was now on track to deliver the majority of its completions in the second half of the financial year, which could boost earnings.

It also said it would pay an interim dividend of 90 pence per share in January 2014, up from the 15 pence paid last time and ahead of its original timetable, and would maintain a regular distribution of dividends in the period to September 2015.

"Today's announcement has given a bit more clarity on short-term payments but the longer dates remain in place," Peel Hunt analyst Clyde Lewis said.

The company announced plans in 2011 to return 1.7 billion pounds in cash to shareholders with September 2015 being the first milestone by when it plans to return 568 million pounds to shareholders.

Shares in Berkeley were up 7.5 percent at 2451 pence by 1100 GMT, having peaked at 2533 earlier in the session, an all-time high since the shares were listed in 1985 and making them the top riser in the FTSE 250 index .FTMC.

Analysts currently expect the company to post full-year pretax profits of between 300 and 374 million pounds, on revenues which on average are forecast to come in at 1.5 billion pounds ($2.5 billion), according to Thomson Reuters data.

The housebuilder's profits have risen sharply in recent years thanks to strong demand for its London homes from overseas buyers as well as local buyers encouraged by government schemes to help Britons get onto the housing ladder.

Pretax profits for the six months to the end of October rose 19.2 percent to 169.5 million pounds, on a 19.7 percent increase in revenue to 821 million pounds. Net asset value per share was up 5.3 percent from six months ago at 1062 pence.

CAPITAL GAINS FOR OVERSEAS INVESTORS

Berkeley, which sells 30 percent of its homes to non-UK residents, said that it was broadly supportive of the government's move announced this week to levy capital gains tax on foreign residential property owners from 2015, but warned that continual changes to the tax regime could start to deter such buyers.

Britain last year introduced stamp duty of up to 15 percent on residential property purchases made through a company which are worth more than 2 million pounds, a move which Berkeley's Managing Director Rob Perrins said should be withdrawn.

"Those are unfair taxes and will stifle investment. If they can get certainty, people are happy to pay tax on a profit and that's why capital gains tax we're broadly supportive of. But they get concerned when it changes every six months," Perrins said.

(Editing by Greg Mahlich)

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