Housebuilder Berkeley Group has unveiled an overhaul at the top as it posted lower annual profits and confirmed earnings would remain under pressure over the next two years.
The group, which specialises in building homes in London, said chief executive Rob Perrins would become executive chairman when current chair Michael Dobson steps down in September after three years in the role.
Chief financial officer Richard Stearn will then become chief executive, with the group saying his promotion “will uphold Berkeley’s longstanding tradition and preference for promoting from within”.
The leadership reshuffle comes as Berkeley reported a 5.1% fall in pre-tax profits to £528.9 million for the year to April 30.
It said it was on track for guidance for 2025-26 of £450 million in pre-tax profits, but this would mark a 15% drop year-on-year, with the group saying it expects a similar result for the following year too.
The group had said it previously expected profits of “at least” £450 million in 2025-26.
Shares in the firm dropped more than 7% in morning trading on Friday.
Mr Perrins said: “There is good underlying demand for our homes, with transaction volumes gradually improving over the course of the year.
“However, consumer confidence remains finely balanced and a more meaningful recovery requires both improved sentiment and macroeconomic stability.”
He added: “We have adapted our business to current market conditions over the last 18 months, which results in the pre-tax profit guidance for 2025-26 of £450 million, with 2026-27 likely to be similar, based on current sales rates.”
The group’s results showed it delivered 4,047 homes, excluding joint ventures, up from 3,521 in 2023-24, though the average sale price fell to £593,000 from £664,000 in 2023-24.
Sales reservations were 5% higher, but the group said “current sales levels are below our long-term aspirations and around 30% lower than 2022-23”.
Forward sales were £1.4 billion at the end of April, down from £1.7 billion a year earlier, “and will moderate further over the next 12 months under prevailing market conditions”.
Analysts at Peel Hunt said they had trimmed their forecasts for the next two financial years by between 5% and 6% after the housebuilders’ more downbeat guidance.
“We suspect that tougher trading and increased sales incentives are at the heart of this drop in expectations,” they said.
