Berkeley Group Holdings (The) PLC (BKG)

[gadjet]

My broker has advised of the above i.r.o. Berkeley Group (BKG), but would be similar for any company ?

"Under capital return, you will get £4.00 in cash for each share held on the record date. This will be followed by consolidation, result being in lieu of every 100 shares of BERKELEY GP HLDGS ORD GBP0.05 you will get 92.69 shares in BERKELEY GP HLDGS ORD GBP0.053943"

These events are mandatory and they anticipate the consolidated share will credit on 19/03/2020 and capital return payment is expected on 31/03/2020

I have not experienced this elseware and don't know if I should do anything before it happens.

Thanks
Sue

[dealtn]

My broker has advised of the above i.r.o. Berkeley Group (BKG), but would be similar for any company ?

"Under capital return, you will get £4.00 in cash for each share held on the record date. This will be followed by consolidation, result being in lieu of every 100 shares of BERKELEY GP HLDGS ORD GBP0.05 you will get 92.69 shares in BERKELEY GP HLDGS ORD GBP0.053943"

These events are mandatory and they anticipate the consolidated share will credit on 19/03/2020 and capital return payment is expected on 31/03/2020

I have not experienced this elseware and don't know if I should do anything before it happens.

Thanks
Sue

I don't own and haven't read the "shareholder notice" that the company will have been obliged to issue.

However all that is going on will be that the company will be making a "distribution" to its owners. More usually this will be in the form of a dividend, and in such a situation probably a "special dividend". Such a payment will be subject to dividend tax, and therefore possibly "unwelcome" when if it wasn't income, but a return of capital it might be better for shareholders.

So it will depend on what type of tax payer you are, and how you inform the HMRC, whether you will "have" to do anything.

After the payout by this slightly unconventional method the "share consolidation" effectively "visually" restores the company's share price to what it would have been without the capital distribution.

Do you (or indeed anyone) actually need or want to know the full mechanics, or is your question the much simpler one of "do I need to do anything?" rather than the "what is happening" one?

[PinkDalek]

I haven't studied it but the latest RNS dated 24 February 2020 is here:

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/BKG/14433757.html

However all that is going on will be that the company will be making a "distribution" to its owners. More usually this will be in the form of a dividend, and in such a situation probably a "special dividend". Such a payment will be subject to dividend tax, and therefore possibly "unwelcome" when if it wasn't income, but a return of capital it might be better for shareholders.

So it will depend on what type of tax payer you are, and how you inform the HMRC, whether you will "have" to do anything.

Probably best to study the circular itself but at first glance and given the mention of mandatory in the OP, it looks like a Capital Return.

(If it was an either or option (dividend or capital return) then it would automatically be treated as a dividend, despite what choice the taxpayer has.)

[fisher]

There is nothing you need do. Your broker should automatically credit you the capital return amount and adjust your shareholding by the given ratio on the dates stated.

[gadjet]

Thanks all.
I will sit back and wait for the broker to do his job.

Sue

[scrumpyjack]

Don't forget that it may result in a capital gain to be reported in your tax return unless total proceeds and gains for the year are below the reportable limit.

[monabri]

https://www.telegraph.co.uk/business/20 ... ly-age-72/

Death of Tony Pidgley.

(Interesting background to the founder).

[idpickering]

Trading Update - Period from 1 November 2022 to 28 February 2023.

"Berkeley's current trading is in line with the levels identified in the December interim results, in which sales since the end of September 2022 were around 25% lower than the strong first five months of the financial year. This is a resilient performance in the context of the market volatility since the end of September and reflects the underlying demand for quality homes in London and the South East.

Sales pricing throughout this trading period has remained firm and above business plan levels. Berkeley remains focussed on cost control and maintaining operating margins, with build cost inflation showing early signs of moderating. Whilst the prevailing volatility in the market persists, Berkeley will continue to match supply to demand, adopting a cautious approach to releasing new phases to the market as we focus on the quality of our forward sales.

The current transaction levels and firm pricing support the three-year earnings guidance provided in December. Berkeley therefore reaffirms that it is on target to deliver pre-tax earnings of approximately £600 million for the year ending 30 April 2023, with at least £1.05 billion in aggregate to be delivered for the following two years. These earnings are underpinned by the Group's cash due on exchanged forward sales which are anticipated to be above £2.0 billion at 30 April 2023 (30 April 2022: £2.17 billion). Net cash at year-end is currently expected to be around £375 million (30 April 2022: £269 million), subject to any further share buy-backs in the intervening period.

With the recent changes proposed to the NPPF and the Levelling Up and Regeneration Bill, it is now increasingly clear that brownfield development requires a separate planning category if brownfield sites are to come forward for residential delivery and play the central role they can and should in addressing the housing crisis. Good development on previously used land, protects the greenbelt and contributes hugely to local communities and social and economic infrastructure, building new homes where they are needed most.

https://www.investegate.co.uk/berkeley- ... 00054971S/

Ian (No holding).

[idpickering]

Final Results.

Strong operating performance in challenging environment

On target to meet guidance for next two years and maintain shareholder returns

86% of homes delivered on brownfield land with highest ever investment in socio-economic benefits

Future delivery of new homes jeopardised by planning environment and regulatory uncertainty unless urgently resolved

https://www.investegate.co.uk/announcem ... ts/7584917

Ian (No holding).

[Crazbe7]

Final Results.

Strong operating performance in challenging environment

On target to meet guidance for next two years and maintain shareholder returns

86% of homes delivered on brownfield land with highest ever investment in socio-economic benefits

Future delivery of new homes jeopardised by planning environment and regulatory uncertainty unless urgently resolved

https://www.investegate.co.uk/announcem ... ts/7584917

Ian (No holding).

Interesting to see that their appetite for modular housing has diminished. The fixed costs are so high without volume the output price is unaffordable. I expect the factory will be mothballed shortly. With Legal & General exiting the modular market there is no quick fix to the current housing problem.

Crazbe7