Good morning, ladies and gentlemen, welcome to Berkeley's interim results presentation for the six months ended 31st of October 2020. I am Rob Perrins, Chief Executive of The Berkeley Group. Following my introductory remarks, I will hand over to Richard Stearn, our Finance Director, to run through the financial results for the period. I will then provide an update on the operating environment, Berkeley performance, and our strategy. In introducing today's results, there are four features that I'd like to highlight up front. First, I would like to register my thanks and admiration to our people and those working across all our sites. These are extraordinary times, and their resolve and expertise in continuing to serve our customers and meet our commitments to all stakeholders over this period warrant special recognition. This is made more remarkable by the increasing complexity of today's operating and regulatory environment.
Second is Berkeley's resilient operating performance during the period, which Richard will take you through, underpinned by Berkeley's uniquely long-term operating model. Third is our continued investment in the business. We now have 28 large, complex regeneration sites and have 10% more people on our sites than prior to the start of the pandemic. Lastly, we have developed a new 10-year vision for the business to ensure Berkeley continues to deliver a positive and lasting contribution to society, the economy, and the natural world. This includes science-based targets for addressing climate change alongside other key priorities, such as increasing the use of digital technology and advanced manufacturing, and building upon our well-established focus on our people, our customers, nature, and the community. I will now hand over to Richard to run through the results.
Thank you very much, Rob, and good morning, everyone. I will take you through the results today, beginning with the summary, then touching on the drivers of revenue and profitability before looking in more detail at the income statement, cash flow, and balance sheet, finishing with our land holdings. Beginning then with a summary of performance for the period, we've delivered GBP 230.8 million of pre-tax profit, down 16.6% from GBP 276.7 million for the same period last year. This result is slightly ahead of the updated guidance we gave with the AGM trading statement in September, which was that we were on target to deliver profits for the full year of around GBP 500 million, but that this would be more evenly distributed between the first and second half than the one-third to two-third split indicated in June at the time of the year-end results.
This principally reflects the performance of our production teams and supply chain over the period. Earnings per share is down 15.2% to GBP 1.496. This is slightly less than the decrease in pre-tax profits due to share buybacks in the period. The operating margin is 25.4%, which compares to 24.5% for the whole of last year and 27.5% for the first half last time. Pre-tax return on equity is 14.9%, in line with the 15% long-term baseline target, which we anticipate being slightly above for the full- year based upon current guidance and consensus. Moving on to look at the financial position of the company. Shareholders' funds or net assets are GBP 3.1 billion with net asset per share up 0.4% to GBP 24.82, enhanced by share buybacks in the period.
Shares in issue have reduced from 125.5 million at the start of the year to 125.1 million due to the net effect of 0.9 million of share buybacks and 0.5 million of shares issued to meet share-based payments. Net cash is GBP 954 million, GBP 185 million down from the GBP 1.14 billion at the start of the year. This reflects a mix of factors, but predominantly represents our investment in additional work in progress and land over the period, and I will go through this in more detail later. In terms of future visibility, we have cash due on forward sales covering the next three years of GBP 1.94 billion. This is slightly ahead of last year-end when the figure was GBP 1.86 billion, and this reflects robust trading in the period, which of course began during the first COVID-19 lockdown. This represents a very strong order book.
Approximately 35% of these forward sales relate to the remainder of the current financial year, 45% to 2021- 2022, and 20% thereafter. The estimated future gross margin in our land bank has increased to GBP 6.65 billion. I will look at this in more detail later too. This slide highlights the key components of revenue and profitability. We have delivered 1,104 homes at an average selling price of GBP 799,000 in the period. This compares to 1,389 homes at an average selling price of GBP 644,000 for the same period for last year. Residential volumes are therefore down 21%. Offset by an increase in average selling price, or ASP, of 24%. As always, the ASP reflects the mix of properties delivered in the period.
The higher ASP this time is as anticipated and is driven by the reprofiling of sites earlier in the year, leading to relatively more London homes being delivered compared to out of London. As we initially focused our production on the onset of COVID-19 on delivering our forward sales commitments, which are more heavily weighted to London. Volumes for 2021 are anticipated to be similar to last year, with a slightly higher average selling price due to the mix effect I just mentioned. The long-term trajectory will see our average selling price reduce towards the land bank level and volumes increase with delivery focused around our long-term regeneration sites, along with increasing contribution from joint ventures. Over the three years immediately following the current year, so FY 2022, 2023, and 2024, I anticipate volumes will average around 3,500 per annum, with pricing averaging around GBP 550,000.
With the precise timing of delivery between periods an important variable as we will always prioritize quality over annual profit targets. In addition to the group numbers, 145 sales have come through the joint ventures in the period at an average selling price of GBP 782,000. This compares to 212 sales at an average price of GBP 805,000 in the comparative period last year. The majority of homes sold this time were in St William, with 78 completions at Prince of Wales Drive in Battersea. Profits from joint ventures are expected to be around 50% higher in the second half of the year. Looking further ahead, JV profits are expected to increase approximately twofold in each of the next two years before stabilizing thereafter. Turning now to the income statement.
Revenue has decreased by 3.8% to GBP 895.9 million, due principally to the anticipated reduction in residential volumes, offset by the increased average selling price, as just described. Within the overall reduction, the comparative period included GBP 18 million of revenue from commercial property sales. This time, we're seeing just GBP 1 million of commercial property sales. Gross profit has decreased by 14% to GBP 289.2 million. This reduction is higher than the decrease in revenue and reflects a fall in the gross margin percentage from a very high 36.1% in the first half last time to 32.3% this time. This is due to the mix of properties sold in the period. As a consequence, operating margin has fallen too, from 27.5% to 25.4%, offset by a reduction in overheads, which has been driven by a mix of factors, including operational efficiencies and reduced share-based payment charges.
I anticipate the operating profit for the full- year will be around 25%, reducing to around 22% next year. We have net finance costs for the period of GBP 3.8 million, compared to net income of GBP 0.9 million in the comparative period. This represents a fall in returns on our cash deposits. With reduced completions in both St Edward and St William, the contribution from joint ventures this period has decreased from GBP 19.4 million to GBP 6.6 million. The effective tax rate is 18.7% with no unusual items. This slide sets out the cash flows for the period, which resulted in a reduction in net cash of GBP 185 million from GBP 1.14 billion at the year-end to GBP 954 million. GBP 231 million has been generated from pre-tax profits with a net outflow of GBP 178 million from working capital.
There are three important movements in working capital, all of which are dealt with on the next three slides. To summarize, these are a GBP 329 million outflow from increased inventory due to investment in new land, as well as continued investment in our existing regeneration sites. This has been offset partially by a GBP 54 million increase in customer deposits as new reservations exceeded the revenue taken to the income statement, and a GBP 98 million decrease in other working capital, largely represented by an increase in land creditors. During the period, we paid GBP 47.1 million of tax, acquired GBP 37.1 million of shares, and paid dividends of GBP 134.3 million. Looking forward to the remainder of the year, we anticipate investing up to a further GBP 150 million in the balance sheet.
This will come through investing in work in progress on our existing sites, bringing conditional land holdings onto the balance sheet, and investing in new land. I do not propose to dwell on this balance sheet slide, as I will run through the two big numbers, inventories and creditors, in the next two slides. This slide analyzes the GBP 329 million increase in inventories in more detail. The overall land cost in the balance sheet has increased by GBP 183 million, meaning the new land acquired exceeded the cost of that used in production in the period. The cost incurred relate to three particular areas. First, and most significantly, the cost of new sites acquired unconditionally. Secondly, the cost of sites previously acquired conditionally that have become unconditional in the period moving onto the balance sheet.
Finally, planning related costs in the period such as Community Infrastructure Levy and Section 106 costs. Build work- in- progress has increased by GBP 213 million in the period, as new build investment has exceeded the build cost expensed. This investment was anticipated as we develop out our new regeneration sites. Completed stock of GBP 73.3 million includes 89 residential properties spread across 23 developments. The figure is down significantly from the year-end position of GBP 139.5 million. Moving on to creditors. These have increased by GBP 144 million in the period. The two main reasons for this are a GBP 53.6 million increase in customer deposits, as new reservations exceeded the revenue taken to the income statement in the period, reflecting good sales in the six months. The second reason is a GBP 66 million increase in land creditors.
The majority of this increase is long term and rises on the new sites acquired in the period. GBP 100 million of our land creditors are due in the next 12 months. This slide sets out the group's banking facilities. These remain at GBP 750 million, consisting of a drawn term loan of GBP 300 million and a GBP 450 million revolving credit facility. Through these facilities, the group has certainty of financing out until November 2023. In September, we repaid the GBP 200 million drawn in March under the revolving credit facility, such that the entire GBP 450 million is now available for drawing. At the half year, Berkeley was ungeared with net cash of GBP 954 million and total available liquidity of GBP 1.7 billion, taking into account its bank facilities.
In addition to the group's facilities, our St William joint venture has bank facilities of GBP 360 million available for a three-year term to March 2023, with two one-year extension options. At the half year, GBP 130 million was drawn under this facility. This slide summarizes our land holdings at the 31st of October. Estimated future gross margin has increased to GBP 6.65 billion compared to GBP 6.42 billion at the year end, with plot numbers increased to 60,327 from 58,413 in the period. After accounting for the plots taken to sales in the period, we have added a further 1,900 plots to the land bank through the addition of four sites in the period, as well as new planning and optimization of existing planning consents.
After accounting for GBP 328 million of gross profit taken to sales, GBP 562 million of gross profit has been added, the majority of which relates to the new sites added in the period. Thank you very much, and I will now hand back to Rob.
Thank you, Richard. In my speech today, I will cover four key focus areas. How Berkeley has responded to COVID-19 and the future operating environment. Touching on Berkeley's resilient operating performance during this period, underpinned by a uniquely long-term operating model and financial strength. The continued investment in our business and future growth in housing delivery. Followed by Berkeley's purpose and our vision commitments. I will then conclude with our guidance for the next five years. Turning to COVID-19 and Berkeley's response. Our first priority throughout this period has been to ensure the health and safety and wellbeing of our employees, supply chain, and customers. Our health and safety professionals have supported our construction teams and subcontractors, ensuring that disruption has been minimized while adhering to public guidance and amended site operating procedures.
Similarly, we have adapted our sales and marketing practices. We currently operate by appointment only and have enhanced our deployment of digital technology to ensure we continue to reach our customers. We have adapted our offices, undertaking the necessary risk assessments to provide a safe working environment to those who need to be in the office. We now have 11,000 people working on our sites, which is over 10% more than prior to the pandemic, as we work towards increasing housing delivery by over 50% during the current business plan period. In terms of the future operating environment, Berkeley's holistic approach to place making, which prioritizes connectivity, nature, and community, enables us to create unique and sustainable neighborhoods from large, neglected brownfield locations. These sites meet the needs of our customers who, like us, take a long-term view, valuing these attributes highly in their search for a new home.
We have seen this across our portfolio in the last six months, with both homeowners and investors prepared to look through the pandemic, and this focus on the quality of life and place will continue to differentiate Berkeley's developments as we look beyond the immediate impacts of COVID-19. Looking now at the regulatory environment, there have been some important changes which will also play a significant part in the future for Berkeley and the wider delivery of the new homes. The first of these is in relation to the government white paper Planning for the Future. Berkeley welcomes government ambition to improve, simplify, and speed up the planning system in its pursuit of delivering 300,000 homes per annum. Like all new legislation, its implementation will need careful consideration to ensure there is not a hiatus as local authorities and other stakeholders transition between regimes.
We do, however, have deep concerns on the proposal for a new consolidated Infrastructure Levy. The proposal is appropriate for small sites, but it runs the very real risk of impeding the delivery of large regeneration projects, which have unique challenges that require locally negotiated solutions with empowered local stakeholders and councils at the table. Berkeley's position is that the Infrastructure Levy should therefore be removed for sites over 300 homes and replaced with a locally negotiated Section 106 agreement, which takes account of the very significant additional costs of site-specific remediation, infrastructure, and other associated works that these strategic sites deliver. The second regulatory change relates to the issue of the Draft Building Safety Bill. Firstly, we fully support government's determination to ensure buildings are safe for the people that live in them.
We will ensure that our own procedures will be compliant with the new legislation ahead of its anticipated implementation. We are well advanced in this regard. Berkeley took a leading role in the establishment of the original EWS1 process to demonstrate the safety of buildings over 18 m. We continue to engage with MHCLG and other stakeholders to find a comprehensive solution, which should be based upon science and risk assessment to unlock all safe buildings for mortgage valuation purposes. This is required to ensure the housing market operates efficiently, effectively, and fairly for all. Lastly, Berkeley continues to work with its supply chain to mitigate, to the extent possible, any temporary disruption to the import of materials following finalization of the terms of the U.K.'s trading relationship with the European Union this month.
We're also mindful of the importance of the U.K. remaining an open and welcoming place for business. Now moving to operating model and the resilient performance, which is to set out the financial performance of the group along with a very strong balance sheet position. I would like to highlight the following, though. We are firmly on track to deliver our long-term target of 15% pre-tax return on equity and shareholder returns of GBP 280 million per annum. Our long-term model and financial strength has enabled us to continue investing in this very challenging period. We have added four new sites to our land holdings. We have moved five sites into production, which includes four long-term regeneration developments. This production momentum is evident in the additional GBP 210 million that has gone into build and work in progress in the last six months, which Richard set out earlier.
This means that over the last 18 months, we have increased our investment in each of land and build work in progress by GBP 400 million each, therefore GBP 800 million in total. We now have 28 significant development opportunities in London and the Southeast, which I would like to look at in more detail on the next slide. Berkeley is the only developer undertaking major brownfield regeneration at scale in London and the Southeast. Large scale brownfield regeneration takes longer and is more complex and capital intensive than traditional house building sites. It involves uncertain timing given the multitude of competing stakeholder requirements and complexities. However, these sites, when delivered with the right approach, can return greater value to all stakeholders over the long term. As the slide sets out, Berkeley now has 22 of these 28 sites in production as at the 31st of October 2020.
This means we have good visibility on the business plan with these sites underpinning our anticipated 50% increase in housing delivery by 2024-2025 from 2018-2019 levels at the start of the six-year guidance period. I would now like to look at the sales performance in the market. For Berkeley, sales for the six-month period have been around 50% lower than the annualized run- rate for the 2019-2020 financial year. This period began in lockdown, this is a resilient performance and is at levels which support our business plan. We've seen our cash due on forward sales increase to above GBP 1.9 billion, which provides excellent assurance and visibility as we start the second half of this financial year. The split of customers remains broadly 50/50 between owner occupiers and investors. With overseas customers accounting for the majority of investors. Pricing is stable, at or above business plan levels.
The temporary stamp duty reduction has eased a financial barrier that has prevented many households from moving to homes that meet their needs. It has markedly improved household mobility and underpins our view that transaction taxes stifle activity levels. We fundamentally believe that stamp duty should remain at zero overnight below GBP 500,000, and the current rates halved above this level. Importantly, this has also clearly demonstrated that there's a strong underlying demand for housing if the right conditions for growth are in place. At the same time, supply in Berkeley markets remains considerably below requirements. The latest quarterly data shows that new starts in London for the 12 months to June 2020, are around 12,000, well below the needs of London.
Looking forward, the fundamentals remain strong with undersupply and low interest rates. This remains a good time to buy in London and South East for those who have a deposit, particularly when compared to the cost of renting. Now, looking at land and planning. Berkeley continues to see opportunities to acquire new sites, as always, has been selective. In many cases, particularly where institutional funds are selling, prices are yet to adjust to today's operating environment. We are therefore being patient. We anticipate these valuations will adjust. We have bought four new sites into land holdings in the period, comprising around 2,800 new homes. In London, this includes a site at Borough Triangle in Southwark, which was acquired unconditionally and which we will begin formal community engagement in early 2021.
We've also bought a site in Sutton, unconditionally, for which we will obtain vacant possession in two years' time. A further unconditional site, which is adjacent to our West End Gate development in Paddington. We have acquired one site outside London, conditionally, a site in Wallingford, in Oxfordshire, which we've held an option over for 10 years. We secured planning consents on two long-term regeneration sites in the period. This includes Old Kent Road in Southwark for 1,350 homes and at Silk Park in Barnet for 1,300 homes, and the reprovision of a Sainsbury's store. We have also obtained over 20 revisions and amendments on other sites as we always look to improve our planning consents. While we have notable successes in boroughs we want to see new housing, in the main, planning is taking even longer, is expensive and increasingly bureaucratic.
In terms of build costs, these have been stable during the period. This reflects government's clear message that the construction industry, including house building, should remain open during the pandemic. Materials are generally on extended lead in times when compared to those available at the start of 2020, although this has eased. Consequently, we anticipate that build costs will be stable as we move into 2021, particularly in London, with a backdrop of falling supply. As I said earlier, the risk of material shortages in the new year following conclusion of the trade agreement with the European Union cannot be discounted. Neither can this be fully mitigated. We currently have around 11,000 people working across our 66 sites in production, including some 200 apprenticeships, with a total of 32,000 U.K. direct and indirect jobs supported across the economy by Berkeley.
This is more than 10% higher than the levels prior to the pandemic. Turning to our modular factory. We have made good progress in the development of our precision manufacturing facility in Ebbsfleet during this period. We aim to begin production of the first prototypes in 2021, and our focus is achieving a consistent and reliable level of build quality whilst enhancing environmental performance, safety, and productivity. This slide shows the status of our 93 development sites, of which 44 are in London and 49 are in the South East and in Birmingham. We've completed nine sites in the period and acquired four new sites. This leads to a reduction in number of sites from 98 at the start of the financial year to 93 now. The sites in production decreased by a net four to 66, with five started and the nine sites mentioned above completed.
Of the 16 owned sites not yet in construction, 10 have at least a resolution to grant planning permission, significantly reducing the balance sheet risk in our land holdings. Of the 11 conditionally contracted sites, three now have at least a resolution to grant planning. This slide and the next one are the map setting out the locations of all of our sites. I will not dwell on these, save to note that four new sites added in the period are marked with asterisks. These are the 44 sites in London. These are the 49 sites outside London. Turning briefly to our joint ventures. St Edward is our joint venture with M&G, and it currently comprises 5,250 homes in our land holdings across six developments. No new sites were added in the period. Five developments are in production, whilst the site in Brentford is contracted subject to planning.
St William is our joint venture with National Grid, comprising some 10,860 homes across 16 developments. While no new sites were added to the JV in the period, we are currently working with National Grid on a further four sites. Poplar Riverside was moved into production during the period, which means St William is now developing four of the group's 28 large regeneration schemes, all of which are in production. These comprise Prince of Wales Drive in Battersea, Clarendon in Hornsey, Kings Road Park in Fulham, and Poplar Riverside. Consistent with previous guidance, we anticipate St William to be materially earnings enhancing by 2023- 2024. Berkeley's purpose is to build homes, strengthen communities, improve people's life, and use our commercial success to make valuable and enduring contributions to society, the economy, and the natural world.
Our vision is Berkeley's strategy for the business, through which we articulate how Berkeley generates value and has a positive impact in line with our purpose. Having initially been launched in 2011, we reviewed our progress and achievements over the last 10 years and evolved our vision for the next 10-year period. This will be launched in early 2021, structured around 10 key long-term priorities for the business. Berkeley aims is to continue taking a sector leading role in tackling climate change alongside new targets for the increasing use of digital technology and advanced manufacturing to our factory, as well as continuing to build upon Berkeley's well-established focus areas of our people, our customers, nature, and community.
Specifically in terms of climate change, we developed a science-based target, which commits Berkeley to reducing emissions from our sites, sale suites, and offices by 50% by 2030, and reducing the carbon intensity of the homes we build by 40% by 2030, covering both the energy used by a resident together with the embodied carbon within the services and materials used to construct our homes. These commitments build upon our progress in this area over the last three years and are in addition to Berkeley being carbon neutral within our direct activities as we have been since 2017. This slide looks at our guidance, which is essentially unchanged. Looking to the full year ending 30th April 2021, we are firmly on track to deliver similar profits to 2019-2020 of around GBP 500 million.
Looking further forward, we continue to target a cumulative pre-tax return on equity of 15% for the six-year period ending 30th April 2025. This broadly equates to GBP 500 million pre-tax profit per annum. In saying this, it is also right to recognize the nature and complexity of the prevailing macro risks. In periods of extreme volatility, it is more difficult to forecast profits in any single accounting period, and Berkeley will always prioritize its financial strength ahead of its annual profits. We are looking to set to add to our land holdings and are targeting the estimated future gross profit in the land holdings to grow to GBP 7.5 billion by 2025. Turning to shareholder returns, we remain committed to our GBP 280 million annual shareholder return program, which we are able to make through either dividends or share buybacks.
This now equates to GBP 2.25 per share following the acquisition of 15.5 million shares for GBP 551 million at an average price of GBP 35.62 since January 2017. Of the next return, GBP 140.6 million, which is committed to be paid by the 31st of March 2021, GBP 37 million has already been returned through share buybacks of 0.9 million shares at an average price of GBP 41.59 per share. We also remain committed to delivering value to shareholders from the previously identified surplus capital of GBP 455 million. We have deferred the return of this by up to two years, which is until April 2023, and provided the flexibility for this to be utilized either through enhanced cash returns to shareholders or investment in incremental land interest should opportunities arise to enhance shareholder value over the cycle.
In the first six months of the financial year, we have made incremental land investments of around GBP 50 million, and we do see ongoing potential for further incremental land investment. Thank you very much for your time today, and this concludes the presentation of Berkeley's interim results for the six month ended 31st of October 2020.