Housebuilder and property developer Berkeley Group has reported a 3.2% rise in its yearly profits. However it has warned plunging sales has posed its biggest risk.

With turnover at £1.0bn, the latest profit performance gives Berkeley a profit margin of 19.5%.

Victoria Mitchell, Chairperson, said: "These results and the position of strength with which Berkeley ended its financial year are testament to the experience of its executive management team, the strategy they have put in place and the talented teams they have built within the Group.

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"At present, the UK housing market, which was in any event returning to normality following a sustained period of favourable conditions, is overshadowed by constraints in liquidity. Whilst this period of uncertainty prevails, I do believe that there can be few developers as well placed as Berkeley to meet the challenges, or better able to take advantage of the opportunities, presented by this market. I am therefore delighted that following consultation with our major shareholders,we have developed a proposal to refine the Scheme of Arrangement to do exactly this and capitalise on these opportunities to maximise shareholder value."

Berkeley was confident of the future and indicated profits for this year would be in line with the year just ended due to the high level of forward sales at £1.2 billion, which covers sales for the next 12 months.

(CD/JM)