Latest news with #MichaelDobson
The Independent
8 hours ago
- Business
- The Independent
Angela Rayner must learn lessons from housebuilders if she wants to succeed
In my corner of south-west London, it is impossible to avoid Berkeley Homes. Their boards are everywhere, popping up with new developments of apartments and houses. For the SW postcodes read right across London, Birmingham and the south-east. Berkeley has got them cornered and as today's company figures show, it is powering ahead, leading an industry that has been struggling with red tape, rising costs, shortage of suitable sites and an uncertain market. Berkeley has always been a firm built on disciplined execution and rigid control of costs. Under CEO Rob Perrins, that focus has been even more firmly enforced. It's a tightness that is reflected in the news that Perrins is to move up to become executive chair of the Berkeley Group, on the retirement of Michael Dobson. Chief executive since 2009, Perrins has overseen a period of sustained strong performance and growth. The City is not always approving of CEOs switching to chair, but in this case it makes perfect sense: Perrins knows the company, market and industry backwards; he's also au fait with the complex and often fraught regulatory landscape. To appoint someone from outside at this moment of great change, with a government committed to driving house building on a huge scale, seems madness. If anyone knows what requires unlocking to make that key policy even remotely achievable it is Perrins. It's likely Berkeley shareholders will listen to the reasons for and approve. There is simply too much risk involved in going down another route, why take the risk? Investors, though, are just one audience. The other people who should fall upon Perrins' experience and knowledge are ministers. Here we start to come up against the block of old Labour ideology, based on a fixated view that practitioners like Perrins are solely motivated by money, that all they are interested in is securing ever greater profits. It's not just senior Westminster politicians who think like that but local councillors. They view much of what the likes of Berkeley do and suggest with suspicion. Instead of leaning on the private sector – the folks who after all commit the cash, take the gamble and actually build and sell the properties – for advice and working together with them, there is a tendency to keep a distance, to hear, to nod politely and do next to nothing. That, certainly, has been the pattern previously, which is why so little has been achieved. Government targets for new homes are not a recent phenomenon; they have been set many times in the past and nowhere near met, so much so that they have come to hold a fantasy, pie in the sky, wouldn't it be wonderful, aspect. It's a cycle that must be broken if the country is to have any chance of resolving a deepening crisis and from Sir Keir Starmer 's point of view, if he is going to have any prospect of adhering to a central Labour pledge that will impact upon the next election. Which means that Angela Rayner, the minister charged with making it happen, should look closely at what Perrins is saying and act. Of course Perrins is pursuing a financial return. It would be negligent of him not to; it's what is expected of him and his colleagues; they must deliver or else. That's how business operates and no-one is pretending otherwise. Equally though, the one cannot succeed without the other. Rayner and her team need the housebuilders; the housebuilders need Rayner and her team. They should both be pulling in the same direction. The government's mission is to build 1.5m homes. Essential to achieving that are brownfield sites and occupying a vital position is London. It's our only world city, the one that enjoys the strongest economy and offers the greatest potential for growth. Unfortunately, too many politicians look askance when London is mentioned. They are not from London and they are devoted to levelling up, which in London's case translates into levelling down. The London figures suggest a micro-crisis within a larger crisis – private housing starts for the last 12 months amount to just 8,700 and completions are expected to drop to 7,000 - 8,000 in 2027. They are pitifully low. London is where people want to live, it's where the jobs are, it's where foreign capital is heading – yet not enough is being done to help. Berkeley and its ilk face a double whammy in London: costs have risen by over 40 per cent since 2016, but the price of flats is flat. Make that a triple: as if that was not heady enough, the regulatory burden has increased. Much of it is well-intentioned – post-Grenfell, fire safety has become a major concern – but it all adds up. At the same time, public services are placed under ever greater strain, which inevitably puts increased pressure on the private purse. These days, councils desire, expect, far more for their buck. From their side, there is too much take and insufficient give. Planning, which is in their gift, is as hidebound as ever, more so with the issuing of unrealistic priorities that take little account of market conditions and operational strictures. So tortuous is the planning process that shamefully, appeal is now the default. One change that would yield instant benefits, which Perrins keenly advocates, is for councils to use Section 106 agreements rather than the Community Infrastructure Levy, or CIL. The latter is a standardised, non-negotiable charge assessed on development size and style, whereas the 106 is negotiated and site-specific. In others words, the 106 can be made to fit what is being proposed. Hard-up councils though, prefer the cash, hence the popularity of the CIL. But that tariff, which is what it is, may not sit fairly with the developer. Projects are being lost through the councils' failure to compromise. An urgent rethink – or as this government prefers, a reset – is required and the housebuilders, with Perrins to the fore, must be a more equal party to those discussions.
The Independent
9 hours ago
- Business
- The Independent
Homebuilders Berkeley Group announce ‘Rob the Builder' as new executive chair to lead 10-year strategy
British homebuilder Berkeley Group Holdings has reported end-of-year pre-tax profits of £528m and announced that their new executive chairman will be Rob Perrins, the veteran CEO known in the industry as 'Rob the Builder', who succeeds Michael Dobson to become executive chairman. As Dobson steps down in September, Perrins, who has caught the attention of deputy prime minister Angela Rayner in her mission to build 1.5m houses, will steer the company through a new strategic phase. A statement from Berkeley thanked the outgoing chair, as Perrins prepares to accelerate investment through a new 'company 10-year strategy'. Reporting their end-of-year financials on Friday, the group highlighted more than 4,000 homes being delivered - 92 per cent of which were on brownfield land typically previously used for industrial or commercial purposes. The group reported a total of £251.8m paid out in dividends to shareholders, who also benefited from a further £129.7m in share buybacks, at an average price of £39.05 each. CEO Perrins praised the group's performance amid a challenging environment. 'Berkeley has delivered £528.9m of pre-tax profit for the year, with net cash at £337.3m, in spite of ongoing geopolitical and macroeconomic volatility. With over 75 per cent of sales secured for the coming year, we are well-placed to achieve our FY26 pre-tax profit guidance of £450m. 'This represents an excellent operational performance with highly disciplined execution and close control of costs. We have added long-term value to the business, both in our land holdings and through our Build to Rent platform.' Alongside last year's financial performance, the group revealed a new 10-year strategy which will incorporate a £7bn free cash flow to deploy across the next decade, including a minimum of £2bn to return to investors. Mr Perrins added that the group is focused on helping clearing regulatory hurdles when it comes to the government 's plan for 1.5m affordable houses to be built before the end of parliament. 'Berkeley is fully committed to the government's housing-led growth agenda, and we are submitting planning applications on all our sites to accelerate delivery,' he said. 'We welcome the government's efforts to unblock housing supply and advocate focused action to accelerate completion of Section 106 agreements, increase funding for the Affordable Housing sector and ensure Planning Authorities have the resources and pro-active mindset to facilitate housing delivery. 'We were therefore delighted to see the increase in Affordable Housing funding and the 10-year social housing rent settlement announced in last week's Spending Review, which represents positive progress towards achieving their housing ambitions.' Mr Perrins has been Berkeley's CEO since 2009. With his promotion, current CFO Richard Stearn will, in turn, become CEO. 'Appointing Rob as executive chair will provide assurance to key stakeholders, including our people and the leaders in National and Local Government, of the continuity in leadership needed at this time,' read a company statement. 'It resolves succession in a way that retains the Berkeley culture and values, the importance of which is recognised by shareholders and other stakeholders alike.' Major shareholders will be consulted on the proposed appointment. The company positions itself as the UK's only large homebuilder with a business model prioritising brownfield development. Berkeley Group Holdings was trading at £41.50 at Thursday's market close, having risen just over 6 per cent year to date.
Reuters
10 hours ago
- Business
- Reuters
UK's Berkeley names Richard Stern as new CEO
June 20 (Reuters) - British homebuilder Berkeley Group (BKGH.L), opens new tab on Friday named current finance chief Richard Stern as its new CEO, succeeding Rob Perrins, who will take on the role of executive chair. Chairman Michael Dobson will step down in September after the group's annual general meeting, the company said. "At this time, the Board is very conscious of the complexity of today's operating environment in our industry, the role of housing in the Government's growth agenda and the importance of the current executive team to maintaining Berkeley's unique business model," Berkeley said in a statement. The company said it has proposed Perrins' appointment as chairman to lead the group's 10-year strategy, providing assurance to stakeholders of the continuity in leadership. As required by UK governance rules, Senior Independent Director Rachel Downey will consult with major shareholders in relation to this proposal, it said. The high-end homebuilder also reported an annual pre-tax profit slightly ahead of market expectations on Friday, helped by tight cost controls as high interest rates and affordability concerns weigh on demand in the sector. Pre-tax profit for the year ended April 30 came to 528.9 million pounds ($713.22 million), compared to analysts' estimate of 526.3 million pounds, according to LSEG data. ($1 = 0.7416 pounds)
