Berkeley has reaffirmed its pre-tax profit guidance of £450m for the financial year but warned the situation in the Middle East is “weighing heavily on risk sentiment”.

The property developer said it would target a similar profit guidance for the 2027 financial year while acknowledging it remains aware of the risk of a further deterioration in macro conditions.

Berkeley was announcing a trading update covering the four-month period to 28 February. It said the trading environment over this period was “constrained” by the impact on consumer confidence of geopolitical events and macroeconomic uncertainty.

However, the construction group said its sales enquiries remained good and that the value of underlying reservations has been recovering towards the levels it recorded over the summer, prior to a hiatus around the time in the lead-up to the Budget.

The FTSE 100 listed company also revealed that its net cash position is at around £300m as it approaches the end of its financial year.

“The emerging situation in the Middle East is weighing heavily on risk sentiment and we await to see the impact of this on the market,” Berkeley’s statement said.

“While reaffirming guidance, we are aware of the risk of a further deterioration in macro conditions with the potential for higher inflation in the near term and for interest rates to remain higher for longer.”

The statement went on to say: “Looking beyond 2027, given the macro conditions, market sentiment and the regulatory delays being experienced, Berkeley will focus on cash generation to maintain a strong balance sheet, the quality of profit in the core business and shareholder returns.”

---