Berkeley Group’s founder Tony Pidgley is set to add another £23m to his fortune after the housebuilder showered shareholders with an extra £500m windfall.
The company, which focuses on London and the South-east of England, first announced plans four years ago to return £1.7bn, or £13 a share, to investors by 2021. But it dramatically upped the scale of its ambitions yesterday, increasing the programme to £2.2bn. Its shares rose 7 per cent , or 250p, to 3,602p.
The higher cash return target of £16.34 a share by 2021 also gives Mr Pidgley and Berkeley’s senior management a higher hurdle to vault to achieve one of the richest bonus plans in corporate history. Under the 2011 scheme, the top team could share 17 million shares worth £600m if they achieve the target.
Mr Pidgley – who founded the business in the 1970s and once fought off a takeover bid from his own son – owns a 4.5 per cent stake in Berkeley, putting him in line for the extra £23m from the expanded scheme before any shares vest.
He is already worth more than £200m and respected for his ability to pick the highs and lows of the property cycle; two years ago he spent £10.5m on one of Berkeley’s luxury flats in Belgravia.
Berkeley’s managing director, Rob Perrins, insisted that the housebuilder was not saying the market had peaked . He said: “We signalled in June that if we had surplus capital, we would look to return it.
“It is a reflection of the investment we’ve put into the business since 2009 – Berkeley has invested £1.8bn. This is the return,” he said.
“Post-Lehmans gave us a great opportunity to invest in London and we are now on 75 sites and those sites are delivering a higher return.”
But he added: “We are still investing in London – we are not calling the top of the market.”
The announcement came as Berkeley reported a 10 per cent rise in pre-tax profits to £242m for the six months to 30 September, on revenues 11 per cent ahead at £1.14bn. The company sold 2,091 homes at an average selling price of £506,000 and has bought six new sites recently, including National Grid’s former gasworks in Fulham.
Mr Perrins added: “The feelgood factor is there in London and that is coming across... You’ve got very low mortgage rates and an under-supply of homes.”
