CHIEF EXECUTIVE'S STATEMENT

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Summary of Performance

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Berkeley has delivered pre-tax profit of �503.7 million for the year. This is from the sale of 2,723�homes (2019: 3,698) at an average selling price of �677,000 (2019: �748,000), reflecting the mix of properties sold in the year. The reduction in profit before tax of 35.0% on the prior year was anticipated and reflects the progressive completion of a number of Central London developments acquired in the period from 2009 to 2013.

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These results represent a strong performance and are in line with the guidance in place at the start of the year. Robust trading during the year, with improved sentiment and gathering momentum, following the decisive December General Election result, led to consensus for the year increasing to around �550 million. The Company was on track to meet this prior to the Covid-19 lockdown at the end of March when guidance was revised to �475 million, on concern of the ability to complete property transactions during lockdown.� Berkeley therefore surpassed its initial expectation in this regard, in spite of the challenges of maintaining production on site and for customers in securing mortgages and achieving legal completions in this period.

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From the onset of Covid-19 we have focused on adapting our activities to keep all stakeholders safe, to limit impacts on our ongoing operations and to fulfil our commitments to our customers and partners. �Following the Government's 23 March lockdown instruction, we worked quickly to establish safe protocols for our site operations; always with reference to industry bodies, including the Construction Leadership Council, and Government guidance.� After an initial reduction to around 40% of normal production capacity, our activities have been largely restored and stabilised through the effective implementation of these safe working practices and, on average, our sites are currently operating at around 80% of production capacity. This has taken a huge amount of hard work and dedication from our experienced teams and supply chain.

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Looking forward, this response to the initial impact of Covid-19 means that the Company is still targeting a cumulative pre-tax ROE of 15% for the six year period ending on 30 April 2025, which broadly equates to average annual pre-tax profit of �500 million. We now anticipate profit delivery in the coming year to be weighted towards the second half of the year in an approximate one third to two thirds ratio. This does assume no further significant disruption from a second wave of Covid-19 or a disorderly end to the Brexit transition period.

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Berkeley's net cash of �1,138.9 million (April 2019: �975.0 million) continues to reflect the measured investment of recent years and is commensurate with the uncertain operating environment. Notwithstanding this, Berkeley has increased the estimated gross profit in its land holdings to �6.4 billion (April 2019: �6.2 billion).

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Strategy Update and Shareholder Returns

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Berkeley's purpose is to create homes, strengthen communities and improve lives, using its sustained commercial success to make valuable and enduring contributions to society, the economy and natural world. To achieve this, the Company's long-term strategy is to invest in opportunities with the right risk-adjusted returns, while ensuring that its financial strength reflects the prevailing macro environment, and to make returns to the shareholders who support the Company to achieve its purpose, through either dividends or share buy-backs.

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Since the end of the financial crisis in 2011, the Company has acquired a number of long-term regeneration sites, some of which are now in, or coming into, production and is in the process of bringing forward over 25 large and complex residential-led developments, of which 20 have been acquired since the start of this period.

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These sites typically deliver between 1,000 and 5,000 homes and their development can take up to 30 years to complete. Their complexity often means that it can be five or six years before the first homes are delivered. They require significant upfront capital investment, coupled with the unique expertise that the Group has accumulated over the last 20 years and which is embedded throughout its 21 autonomous operating companies. Berkeley is transforming neglected industrial and brownfield land into thriving new communities which deliver quality homes of all tenures, biodiverse open spaces and a mix of shops, offices and amenities for local people.

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The successful transformation of these sites is founded on trusted partnerships with local authorities and communities and their development is directly aligned to the Government's strategy for increasing the supply of good quality homes across all tenures. The Company is now the only developer undertaking major brownfield regeneration at scale in London and the South-East as the increasing risk and complexity of these activities has seen those with lesser expertise and resources leave this area of the market. The delivery of these sites is vital to meeting the housing needs of the country's towns and cities, while relieving pressure on greenfield land.

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Over the last two years construction has begun on over 20 new sites giving Berkeley a firm foundation for delivering, prior to Covid-19, an anticipated 50% increase in production over the next five years, underpinned by a strong opening forward sales position.� While Covid-19 has caused short term delays and volatility, it does not change the fundamental strength of the business, which is set up in appreciation of the risks of a cyclical market.

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In terms of capital allocation, the priority right now, as it is for all responsible businesses, is on cash conservation to safeguard the business and ensure that it is in the best possible place once the recovery begins.� Berkeley has reviewed its business plan, eliminated non-essential expenditure, and re-profiled its sites to focus its work in progress investment on delivering its forward sales and where it has good visibility of the local market.� The depth and quality of the land bank means that we will only acquire land with compelling characteristics, where we can add value over the long-term.

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Notwithstanding this, Berkeley's financial strength means that it can continue to meet its purpose by investing in its unique operating model to deliver large, complex regeneration sites and help the country rebound from the impact of the pandemic and to continue supporting approximately 32,000 UK jobs, directly and indirectly, in its business and supply chain for the foreseeable future.

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The Company remains committed to its programme to deliver sustainable Shareholder Returns of �280 million per annum up until 2025, but will defer the previously proposed return of �455 million surplus capital for up to two years due to the volatility presented by Covid-19.� This will also provide the Company with the flexibility to use the surplus capital to either make enhanced cash returns to shareholders or to invest in incremental land interests, should opportunities arise which would lead to enhanced shareholder value over the cycle.� The surplus capital will remain on the balance sheet until the enhanced returns or incremental land investment is made. Incremental land investment will be defined as cash spent on land interests, over and above the cost of land used in the income statement, from 1 May 2020.

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In this period of uncertainty, Berkeley will continually review its strategy and has flexibility and optionality within its business model to adjust its plans quickly should market conditions change; always prioritising financial strength ahead of annual profits.

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Berkeley is able to make its Shareholder Returns through either share buy-backs or dividends.� Since January 2017, when share buy-backs were first introduced, the Company has acquired 14.6 million shares for �514.3 million, at an average price of �35.25 per share and the annual return of �280 million now equates to �2.23 per share; an 11% increase to the initial �2.00 per share. �The next six monthly return of �140 million is due to be paid by 30 September 2020. Of this �6.0 million has already been made via share buy backs. The amount to be returned as dividend will be announced on 13 August 2020 and paid on 11 September 2020 to shareholders on the register on 21 August 2020, taking account of any further share buy-backs in the intervening period.

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Housing Market

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Going into the lockdown period Berkeley was experiencing a stable and satisfactory trading environment. Sales for the 12 months were some 10% ahead of the prior year, with sentiment buoyed by the certainty brought by the decisive December 2019 General Election result.

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This momentum also reflected both the desirability of Berkeley's homes in under-supplied markets and increased launch activity with a number of new developments coming to the market in 2019/20.� These included Grand Union in Brent, St William's King's Road Park and The Cottonworks in Finsbury, Royal Exchange in Kingston and a number of developments in the South East including Abbey Barn Park in High Wycombe, Huntley Wharf in Reading, Hollyfields in Royal Tunbridge Wells, St William's Courtyard Gardens in Oxted and Lumina in Camberley. In addition, St Edward agreed to dispose of 190 retirement living apartments at Royal Warwick Square, Kensington, through a forward sale agreement to a retirement living provider.

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Pricing remained firm throughout the financial year and Berkeley secured prices above its business plan levels, broadly covering any cost increases.

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Sales in April and May reflected the impact of lockdown and were around 50% below normal market conditions, with pricing remaining above business plan levels. This is a good result given the very significant disruption to the sales and home moving process during this period. As the economy gradually re-opens we are seeing activity increase, but it is too early to determine where demand will settle over the coming months.

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Fundamentally, this remains a good time to purchase in our markets of London and the South East where supply remains well below underlying demand.� With interest rates at historically low levels and good mortgage availability, following a temporary interruption as the UK entered lockdown, affordability levels are high for those who have a deposit; particularly when compared with the cost of renting. For those who can look through the prevailing short-term uncertainty, there are opportunities for long-term value.

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It will be important to see what measures Government puts in place around property taxation, the speed and cost of planning and its own direct investment in the sector (including Help To Buy), as this will play a significant part in determining the pace of recovery in a sector that can play a leading role in the recovery of the wider economy.

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The Group's cash due on forward sales at 30 April 2020 is at �1.86 billion compared with �1.83 billion a year ago. The cash due on these forward sales will be collected in the next three financial years and it excludes sales of affordable housing and sales by our joint ventures.� Berkeley's sales continue to be split broadly evenly between owner-occupiers and investors, with overseas customers continuing to see value in the London market. Help To Buy reservations accounted for a net 290 sales in the year, including joint ventures.

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Berkeley has added six new sites to its land holdings in the year, which includes three in our joint ventures.� In London, the sites are in Old Kent Road in Southwark where we have completed a challenging land assembly and achieved a resolution to grant consent for up to 1,300 new homes, a site acquired conditionally in Brentford where we will be working to deliver a scheme of over 1,000 new homes (St Edward) and in Camden where we will be providing over 600 new homes. Outside London, we have acquired a site unconditionally in Tonbridge, Kent for around 150 new homes and in the St William joint venture we have conditionally contracted sites in Brighton and Worthing.

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These new sites are fantastic additions to our land holdings and provide Berkeley with the opportunity to add value over time.� We continue to appraise new land opportunities, but in the current environment with heightened risk, a key factor will be the extent to which both vendors and planning authorities recognise the development risk. This complexity means acquiring and bringing forward new sites remains challenging and a slow process, however, Berkeley is in a strong position having brought through planning and into development a significant number of long-term schemes in the last few years.

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On the planning front we have secured eight new consents in the year, including St William's development in Poplar for up to 2,800 new homes and the former Horlicks factory redevelopment in Slough for 1,300 new homes, and we also obtained 58 revisions to existing consents.

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Build cost rises continued at around 4% until the end of 2019.� From the beginning of this calendar year build costs have been neutral.� As the UK emerges from lockdown, and we assess medium-term demand levels, we anticipate further deflationary pressure on costs in the short-term as activity levels are uncertain.� ��

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Our Vision

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Through the 'Our Vision' strategy for the business we aim to generate long-term value and have a positive impact on our employees, customers, the environment and society.

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The strategy has now been in place for a decade and we have set commitments every two years under our five strategic focus areas: Customers, Homes, Places, Operations and Our People. The achievements and advances set out below are now embedded in Berkeley's day-to-day operations and, during the coming financial year, we will put in place a new set of stretching targets for the future. Performance highlights include:

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������Putting customers at the heart of our decisions: We maintain an Investor in Customers Gold rating across all operating companies. Our Net Promoter Score of 78.8 (on a scale of -100 to +100) and Recommend To A Friend score of 98.5% are both significantly higher than the industry averages of 39 and 89%, respectively (HBF, March 2020 figures).

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�����Taking action on climate change: We incorporate adaptation measures for future weather patterns into the homes and developments we build and are the first homebuilder to produce zero carbon transition plans for all new developments. These will enable the homes to operate at zero carbon from 2030, taking into account how the design, specification and infrastructure we provide can reduce the carbon emissions of home owners both now and in the future. We have maintained our award-winning carbon positive approach within our operations since 2017/18, and received a sector leading 'A-' score for transparency and action on climate change from CDP.

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�����Building communities:�Our projects are large scale and long-term, giving us greater scope to involve local people, understand their priorities and make lasting contributions to the local community's strength, wellbeing and quality of life. This enables us to create welcoming and inclusive neighborhoods with homes of all tenures and a mix of beautiful public spaces, natural landscapes and amenities that bring people together to enjoy community life. Once residents start to move in we use Community Development Plans to get neighbours talking and create social connections across the wider area. We have now trialled a Social Value Toolkit on three sites, which helps our teams to quantify and maximise the social benefits of our holistic regeneration and placemaking strategies.

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������Pioneering approach to nature: Our leading approach to achieve a net biodiversity gain on each and every site we develop has been commended by Natural England and echoed in the Government's Environment Bill which sets out the intention to mandate net biodiversity gain for new developments. We have committed to create or enhance around 450 acres since we implemented the commitment. Nature is just one area for which we were recognised as Sustainable Housebuilder of the Year at the Housebuilder Awards 2019.

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������Championing health, safety and wellbeing: Our latest 12 month rolling Annual Injury Incidence Rate (AIIR) is 1.17 reportable incidents for every 1,000 people working on our sites and in our offices (2019: 1.14). This is testament to the dedication of our teams in focusing on behavioural safety in addition to adhering to stringent standards. This year we have developed a network of more than 220 mental health first aiders and have signed up to the Building Mental Health Charter and Framework.

�����Considerate construction: We are proud to run our sites with consideration to local communities and the environment. Our 12 month rolling average Considerate Constructors Scheme score of 43/50 is significantly above the industry average for the same period (37/50) and demonstrates the care we take on each development under construction to limit our impact on our surroundings.

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������Nurturing careers and improving the industry's image: A focus on emerging talent as a means of helping to address the industry skills shortage has resulted in an increase in the proportion of our workforce being an apprentice, graduate or training (9% in 2019/20). The REACH Apprenticeship Scheme was named CITB's Large Apprentice Employer of the Year 2019 and we held the fourth Berkeley Group Apprenticeship Awards in autumn 2019 to celebrate the efforts of our supply chain, who supported more than 500 apprentices working on our sites during the year.

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������Promoting diversity and inclusion: We continue to prioritise and promote diversity within our workforce and the wider industry through our Diversity and Inclusion strategy. Measures include an enhanced maternity policy, in-house diversity awareness training programmes, recruitment and training programmes targeting underrepresent groups and expanding our partnership with Women in Construction (WIC).� This is an area upon which we will continue to focus.

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The Berkeley Foundation

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The Berkeley Foundation (the "Foundation"), a registered charity, works in partnership with the voluntary sector to focus the skills, resources and fundraising efforts of the Berkeley Group on helping young people overcome barriers, improve their lives and build a fairer society.

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Performance highlights from the year include the launch of a new �350,000 funding programme to support young women from marginalised communities into work, extending our Super 1's disability cricket partnership with the Lord's Taverners and awarding �200,000 in emergency grants to support our local charity partners to maintain their vital services in the wake of Covid-19.

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Over the course of the year the Foundation committed �3 million to good causes across London, Birmingham and the South of England, supporting more than 4,600 people through its programmes and partnerships. This contribution was made possible through the generosity and commitment of Berkeley Group staff, with 63% of our people directly contributing to the Foundation and volunteering more than 10,000 hours of their time. Berkeley Group maintained its Diamond Payroll Giving Award in 2019 and the Foundation's impacts were recognised with four major accolades at the Third Sector Business Charity Awards, including the Corporate Foundation award and the overall Business of the Year prize.

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Outlook

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The UK economy has experienced almost four years of uncertainty since the referendum on leaving the European Union in 2016.� While the decisive December 2019 General Election result saw an improvement in sentiment at the start of the year, the risks and opportunities around the nature of our future trade agreements with the EU and other countries still remain.� Covid-19 has now introduced a new set of unprecedented challenges and is indiscriminately questioning the resilience of individual sectors and companies in the most searching way.�

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Berkeley starts the coming year from a position of relative strength, with net cash of �1,138.9 million, forward sales of �1.9 billion and an estimated �6.4 billion of gross profit in our land holdings. Our unique operating model, with financial strength and agility at its heart, has enabled us to act quickly to review our business plan in light of the risks presented by Covid-19 and continue investing in our brand, delivering homes on our large, complex, regeneration sites, putting people at the heart of placemaking.�

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This puts Berkeley in a position from which it can continue to deliver for all its stakeholders during these unprecedented times, helping the country rebound from the impact of the pandemic and to continue supporting approximately 32,000 UK jobs, directly and indirectly, in its business and supply chain for the foreseeable future.

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Underpinning this investment for Berkeley, is the under-supply of quality new homes in London and South East.� Beyond the immediate tragic human impact, Covid-19 will undoubtedly have a profound impact on how we work, how we live and how we spend our leisure.� Berkeley's focus on the quality of life on its developments, prioritising nature, connectivity and the well-being of its customers will be an advantage as the market recovers.� London remains a fantastic global city and with interest rates at an all-time low, the cost of buying a home for those who can afford a deposit is low, compared with the alternative of renting.

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Housebuilding and construction can play a vital role in the broader economic recovery following Covid-19. This will require Government support, similar to that seen following the 2008/09 financial crisis, including: the reversal of the property tax increases seen since 2014; a reduction in the bureaucracy and cost of planning; and direct investment into affordable housing.

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In closing, it is important to return to the human cost of this terrible pandemic and our first priority remains the health, safety and wellbeing of our people, our customers and our supply chain, whose response over recent weeks has been remarkable, and I sincerely thank them all.�

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Rob Perrins

Chief Executive�

TRADING AND FINANCIAL REVIEW

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Trading performance

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Revenue of �1,920.4 million in the year (2019: �2,957.4 million) arose primarily from the sale of new homes in London and the South East. This included �1,883.7 million of residential revenue
(2019: �2,797.0 million) and �36.7 million of commercial revenue (2019: �160.4 million). There were no ground rent or land sales in the year (2019: �nil).

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2,723 new homes (2019: 3,698) were sold across London and the South East at an average selling price of �677,000 (2019: �748,000) reflecting the mix of developments and varying stages thereon, particularly in London.�

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Revenue of �36.7 million from commercial property includes the disposal of mainly retail and leisure space across a number of our London developments. In the comparative year revenue of �160.4 million included two significant disposals of a 190-bed hotel at 250 City Road and 71,000 sq ft of office, retail and leisure space at One Tower Bridge.

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The gross margin percentage has increased to 33.2% (2019: 31.3%), reflecting the mix of properties sold in the year. Overheads of �167.7 million (2019: �157.8 million) increased by �9.9 million in the year. This is predominantly due to an increase in the charge to the Income Statement for the Group's share schemes following the changes to the 2011 LTIP approved at the September 2019 AGM. Consequently, the Group's operating margin has decreased to 24.5% from 26.0% last year.

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Berkeley's share of the results of joint ventures was a profit of �33.3 million (2019: �8.8 million). St William delivered its first profits in the year resulting from the completions across four developments; Prince Of Wales Drive in Battersea, Elmswater in Rickmansworth, Fairwood Place in Borehamwood and The Cottonworks in Highbury. The stage of delivery on St Edward developments means the current completions are predominately at Green Park Village in Reading.

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The Group has remained cash positive on a net basis throughout the year. Net finance income totaled
�0.7 million for the year (2019: �2.0 million net finance costs) due to interest income on cash deposits which outweighed facility fees, interest on drawn borrowings and imputed interest on land creditors.

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Pre-tax return on equity for the year is 16.6%, compared to 27.9% last year reflecting the return of profitability to normal levels. Basic earnings per share has decreased by 32.5% from 481.1 pence to 324.9 pence, which takes into account the buy-back of 3.5 million shares at a cost of �130.5 million under the Shareholder Returns programme.

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Financial Position

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Net assets increased over the course of the year by �138.3 million, or 4.7%, to �3,101.6 million
(2019: �2,963.3 million). This is after payment of �149.8 million of dividends and the �130.5 million of share buy-backs. This equates to a net asset value per share of 2,472 pence, up 7.2% from 2,305 pence at 30 April 2019, given the share buy-backs undertaken in the year.

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Inventories have increased by �440.2 million from �3,114.7 million at 30 April 2019 to �3,554.9 million at 30 April 2020. Inventories include �519.7 million of land not under development (30 April 2019: �395.2 million), �2,895.7 million of work in progress (30 April 2019: �2,584.7 million) and �139.5 million of completed stock (30 April 2019: �134.8 million).

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The increase in land not under development reflects the combination of new sites acquired as well as previously conditional sites which have completed during the year represented by cash and new land creditors. This increase outweighed the land cost moved into production which was across seven non-joint venture sites. These sites moved into production, coupled with further investment in build on a number of forward sold London developments, led to the increase in work in progress inventory in the year.� Completed stock is spread across a number of sites and remains at comfortable levels.

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Trade and other payables are �1,931.8 million at 30 April 2020 (30 April 2019: �1,595.5 million). These include �783.5 million of on-account receipts from customers (30 April 2019: �686.1 million) and land creditors of �372.7 million (30 April 2019: �92.6 million).� The significant increase reflects the new sites brought onto the balance sheet with a corresponding increase in inventory.� The new land creditors include TwelveTrees Park in Newham, which became unconditional during the year, and the site acquired at Camden, amongst others.� Of the total �372.7 million land creditor balance, �109.0 million is short-term and �263.7 million is spread over future financial years. �Provisions of �114.9 million (30 April 2019: �79.1 million) include post-completion development obligations and other provisions.

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The Group ended the year with net cash of �1,138.9 million (30 April 2019: �975.0 million) which consists of cash holdings of �1,638.9 million and �500 million of debt drawn under the Group's banking facilities. This debt consists of a long-term �300 million term loan and a short-term �200 million revolving credit facility loan which was drawn in March 2020.� There is a further undrawn �250 million available to the Group under its revolving credit facility.

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This is an increase in net cash of �163.9 million during the year (2019: �287.7 million) as a result of �470.5 million of cash generated from operations (2019: �767.2 million) and a net outflow of �75.1 million in working capital (2019: net inflow of �22.0 million), before tax and other net cash inflows of �48.8 million (2019: net outflow �249.6 million), share buy-backs of �130.5 million (2019: �198.9 million) and dividends of �149.8 million (2019: �53.0 million).

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Banking

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The Group has banking facilities which total �750 million, currently comprising a drawn �300 million term loan, and a �450 million revolving credit facility of which �200 million is drawn. The Group has clarity of financing with the facilities in place to November 2023. The Group's cash holdings are currently placed on deposit with its relationship banks.

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Joint Ventures

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Investments accounted for using the equity method have decreased from �374.7 million at 30 April 2019 to �261.8 million at 30 April 2020. �Berkeley's joint ventures include St Edward, a joint venture with M&G, and St William, a joint venture with National Grid plc. The decrease in joint venture investments during the year reflects Berkeley's share of undistributed joint venture profits of �33.3 million, further funding into St William of �2.5 million, settlement of St Edward loans of �29.0 million offset by a dividend distribution from St Edward of �177.7 million.

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In St Edward, 64 homes were sold in the year at an average selling price of �768,000
(2019: 255 at �469,000).� The majority of completions occurred at Green Park Village, complimented by further completions at the Kensington development.�

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In total, 5,310 plots (30 April 2019: 3,736 plots) in Berkeley's land holdings relate to six St Edward developments, three in London (Westminster, Kensington and Brentford which was acquired in the year) and �three outside the Capital (Reading, Fleet, and Wallingford). The joint venture will not be proceeding with a conditional site in Queensway, Birmingham which has been removed from the land holdings in the year.

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In St William, 371 homes were sold in the year at an average selling price of �716,000 (2019: six at �709,000). These completions were across four developments: Prince Of Wales Drive, Elmswater, Fairwood Place and The Cottonworks.

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During the year, St William reviewed its banking arrangements, having regard to the size of the business and its land holdings. As a consequence, St William increased its committed banking facilities to �360 million from �150 million in March 2020. The agreement has a three year term, with options over an additional two years. �

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In total, 10,945 plots (30 April 2019: 9,812 plots) in Berkeley's land holdings relate to 18 St William developments which are contracted in the joint venture. St William has completed the purchase of ten of these sites which include the long-term regeneration developments of Prince of Wales Drive (over 950 homes), Clarendon in Hornsey (over 1,700 homes), King's Road Park in Fulham (over 1,800 homes) and Poplar (over 2,800 homes). �The remaining eight St William sites are included in Berkeley's conditional land holdings. �Berkeley continues to work closely with National Grid to identify further sites from across its portfolio to bring through into the joint venture.

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Land

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Berkeley's land holdings comprise 58,413 plots at 30 April 2020 (30 April 2019: 54,955 plots), including joint ventures.� Of these land holdings, 50,558 plots (30 April 2019: 41,639) are on 86 sites that are owned and included on the balance sheet of the Group or joint ventures and 7,855 plots
(30 April 2019: 13,316) are on 12 contracted sites which either do not yet have a planning consent or have another conditional element such as vacant possession. The Group also holds a strategic pipeline of long-term options for in excess of 5,000 plots.

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The plots in the land holdings at 30 April 2020 have an estimated future gross profit of �6,417 million
(30 April 2019: �6,247 million), which includes the Group's 50% share of the anticipated profit on any joint venture development.� The increase in the year is due to a combination of new sites acquired, new or revised planning consents and market movements, which has more than offset the gross profit taken through the income statement.

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Berkeley has obtained eight new planning consents in the year: Abbey Barn Park in High Wycombe, 17-51 London Road in Staines, the St William sites in Poplar and Hertford, Sunningdale Park, Eastside Locks in Birmingham, Centre House in White City and the former Horlicks factory in Slough. In addition, there have been over 55 revised consents which have sought to improve the development solution for each scheme to add value and/or reduce risk.

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Of Berkeley's 86 owned sites, 70 sites (plots: 37,671) have an implementable planning consent and are in construction. A further 11 sites (plots: 10,634) have a consent which is not yet implementable; due to practical technical constraints and challenges surrounding, for example, vacant possession, CPO requirements or utilities provision. This means Berkeley has just five sites (plots: 2,253) which it owns unconditionally that do not have a planning consent.

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Of the 12 contracted sites, one site has a planning consent and two have achieved resolutions to grant consent but are subject to section 106 agreements. Given the contracted nature of all of these sites, there is low financial risk on the balance sheets of the Group or its joint ventures.

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The estimated future gross margin represents management's risk-adjusted assessment of the potential gross profit for each site, taking account of a wide range of factors, including: current sales and input prices; the political and economic backdrop; the planning regime; and other market forces; all of which could have a significant effect on the eventual outcome.

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- End -

For further information please contact:

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The Berkeley Group Holdings plc����������������������������������������������������������Novella Communications

R C Perrins / R J Stearn������������������������������������������������������������������������Tim Robertson

T: 01932 868555����������������������������������������������������������������������������������� T: 020 3151 7008
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Principal Risks and Uncertainties

The assessment of risk and embedding risk management throughout Berkeley is a key element of setting and delivering the Group's strategy.

Berkeley's approach allows management to focus on making the right long-term decisions to deliver long-term value, whilst retaining the flexibility to take advantage of opportunities which arise in the short and medium term.

Through our strong financial position we are able to take, under normal circumstances, increased operational risk to deliver sustainable risk-adjusted returns, within the parameters of our business model.

A description of the principal risks and uncertainties faced by the Group, together with an assessment of their impact and Berkeley's approach to mitigating them, are set out on the following pages.

We also face a number of uncertainties that have the potential to be materially significant to our long-term strategy but cannot be fully defined as a specific risk at present, and therefore cannot be fully assessed or managed. These emerging risks typically have a long time horizon and are discussed and agreed by the Board on a regular basis.�

The Covid-19 pandemic is a unique and unprecedented risk that has very quickly elevated from being an emerging risk in early 2020.� It is having, and will continue to have, an impact across our entire risk landscape.� We have included a separate new Covid-19 risk which gives an overview of the related uncertainties, potential impacts on the Group and our approach to mitigating the risk.

Whilst we consider there has been no material change to the nature of the Group's principal risks, not surprisingly, the potential impact and likelihood of them arising has increased as a result of the challenging external environment and significant ongoing uncertainty arising from Covid-19.

Financial Risk

In light of these operating risks, Berkeley aims to keep financial risk low, and finances its operations through a combination of shareholders' funds, deposits and on-account receipts and borrowings, where appropriate. The financial risks to which Berkeley is exposed include:

������ Liquidity risk - the risk that the funding required for the Group to pursue its activities may not be available.

������ Market credit risk - the risk that counterparties (mainly customers) will default on their contractual obligations resulting in a loss to the Group. The Group's exposure to credit risk is comprised of cash and cash equivalents and trade and other receivables.

������ Market interest rate risk - the risk that Group financing activities are affected by fluctuations in market interest rates.

������ Other financial risks - Berkeley contracts all of its sales and the vast majority of its purchases in sterling and so has no significant exposure to currency risk, but does recognise that its credit risk includes receivables from customers in a range of jurisdictions who are themselves exposed to currency risk in contracting in sterling.

Management of financial risks

Berkeley adopts a prudent approach to managing these financial risks.

������ Treasury policy and central overview - the Board approves treasury policy and senior management control day-to-day operations. Relationships with banks and cash management are coordinated centrally as a Group function. The treasury policy is intended to maintain an appropriate capital structure to manage the financial risks identified and provide the right platform for the business to manage its operating risks.

������ Low gearing - the Group is currently financing its operations through shareholder equity, supported by �1,139 million of net cash on the balance sheet. This in turn has mitigated its current exposure to interest rate risk.

������ Headroom provided by bank facilities - the Group has �750 million of committed credit facilities maturing in November 2023. This comprises a term loan of �300 million and the revolving credit facility of �450 million. Berkeley has a strong working partnership with the six banks that provide the facilities and is key to Berkeley's approach to mitigating liquidity risk.

������ Forward sales - Berkeley's approach to forward selling new homes to customers provides good visibility over future cash flows, as expressed in cash due on forward sales which stands at �1.86 billion at 30 April 2020. It also helps mitigate market credit risk by virtue of customers' deposits held from the point of unconditional exchange of contracts with customers.

������ Land holdings - by investing opportunistically in land at the right point in the cycle, holding a clear development pipeline in our land holdings and continually optimising our existing holdings, we are not under pressure to buy new land when it would be wrong for the long-term returns for the business.

������ Detailed appraisal of spending commitments - a culture which prioritises an understanding of the impact of all decisions on the Group's spending commitments and hence its balance sheet, alongside weekly and monthly reviews of cash flow forecasts at operating company, divisional and Group levels, recognises that cash flow management is central to the continued success of Berkeley.

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