UK's Berkeley proposes Perrins as chair to lead growth strategy​

(Reuters) -British homebuilder Berkeley on Friday proposed the appointment of CEO Rob Perrins as executive chair to succeed Michael Dobson and lead its 10-year strategy to invest 5 billion pounds ($6.73 billion) in building new homes.

Shares in the high-end home builder dropped 8% in early trading as it also reported results and forecast fiscal 2026 and 2027 profit below market expectations.

As part of the board reshuffle due to Dobson's planned departure in September, the company said finance chief Richard Stearn would become CEO to replace Perrins.

During Dobson’s nearly three-year tenure, Berkeley’s shares have risen 20%. 

Under Berkeley's 2035 growth strategy, which it announced in December, the group said on Friday it can allocate 5 billion pounds in investments, which will include delivering 4,000 rental homes through its Build to Rent platform.

Berkeley, which focuses on redeveloping land that was previously used for industrial purposes, earmarked 2 billion pounds of shareholder returns over that period.

British finance minister Rachel Reeves' spending review outlined an additional 10 billion pound investment to build thousands more homes in England, on top of a 39 billion pound, 10-year affordable housing plan. 

However, Britain’s housing market, which has been under pressure from high interest rates and economic uncertainty, is also grappling with regulatory reforms aimed at enhancing safety and addressing systemic flaws, further slowing delivery.

"Berkeley's long forward order book is unique in the sector reflecting its differentiated business model, and it is a model which excels in challenging and uncertain markets," analysts at RBC Capital Markets said in a note.

Berkeley posted a 5% drop in pre-tax profit to 528.9 million pounds for the year ended April 30, slightly ahead of the 526.3 million pounds expected in an LSEG poll.

Weighed down by the affordability concerns in the market, the company forecast fiscal 2026 pre-tax profit of 450 million pounds, below analysts' estimates of 477 million pounds. It expects fiscal 2027 profits to be at similar levels.

($1 = 0.7429 pounds)

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Janane Venkatraman, Sonia Cheema and Barbara Lewis)