Good morning, ladies and gentlemen, and welcome to the Berkeley results presentation for the six months ending 31st of October, 2021. I am Rob Perrins, Chief Executive of the Berkeley Group. Following my introductory remarks, I will hand over to Richard Stearn, our Chief Financial Officer, to run through the financial results. I will then provide an update on Berkeley strategy operating performance in this period and conclude with our guidance. In introducing the results, I'd like to highlight the following. This is a strong set of results from Berkeley in a complex operating environment. We have delivered GBP 290 million of profit. Our sales have fully recovered to pre-pandemic levels, and we have made further progress with our unrivaled land holdings.
Our land holdings, with 25 of our 30 long-term regeneration developments in production, provide us with excellent visibility over our planned 50% increase in delivery volumes over the business plan period. We have raised our earnings guidance for the current financial year by 5%. Thereafter, we expect profits to grow by a further 5% per annum for the next three years, which will result in approximately GBP 625 million of pre-tax profit for the year ending April 2025. Berkeley's focus on brownfield development in urban locations is inherently more sustainable due to its proximity to public transport and local amenities. Berkeley has transformed its business over the last five years by investing in large scale complex sites in London and the Southeast to achieve an unrivaled position.
We have a passion to create new neighborhoods which truly add to existing local communities and are leading on creating social value, enhancing nature, and tackling the climate and skills challenges. We are always mindful of the cyclical and regulatory risks which affect our business, and this will continue to shape our approach to strategy and capital allocation. I will return to each of these points later, but will now hand over to Richard to run through the results.
Thank you, Rob, and good morning, everyone. I will take you through the results today, beginning with a 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 the land holdings. Beginning, as always, with a summary of the performance for the period. We have delivered GBP 290.7 million of pre-tax profit, up 26% from GBP 230.8 million this time last year. The operating margin has decreased to 22.2% compared to 25.4% in the first half last time, but it is similar to the 22.8% for the last full year. Earnings per share is up 34.8% to 201.7 pence.
This is higher than the increase in pre-tax profits due to the impact of the share consolidation following the capital return in September and further share buybacks undertaken in the period. Pre-tax return on equity is 19.1% compared to 14.9% last time and ahead of our long term 15% baseline. Looking at the financial position of the company, shareholders funds or net assets are GBP 2.9 billion, which is down from GBP 3.2 billion at the start of the financial year, as the capital return and share buybacks have exceeded the profits for the period. Shares in issue, net of Treasury and those held in the EBT have reduced from 121.6 million to 112 million at the end of the period.
This is primarily due to the impact of the share consolidation undertaken in the period, which reduced share capital by 7.65% as well as subsequent share buybacks. Combining these factors, net asset value per share is unchanged from the year end at GBP 26.11. Net cash is GBP 846 million, down from GBP 1.1 billion at the 30th of April, reflecting the capital return. I will look at the cash flow in more detail later in the presentation. In terms of future visibility, we have cash due on forward sales covering the next three years of GBP 1.7 billion, in line with our guidance provided at the September AGM. This is a strong position, particularly in light of the strong revenue performance in the period.
Around 30% of the forward sales relate to the remainder of the current financial year. 45% to the next financial year and the balance thereafter. The estimated future gross margin in our land holdings has remained consistent at GBP 6.9 billion. The impact of new sites added, optimization, and market movements has replaced the gross profit recorded through the income statement in the period. This slide highlights the key components of revenue and profitability. We have sold 1,828 homes at an average selling price of GBP 647,000 in the first half of the year. This compares to 1,104 homes sold at an average selling price of GBP 799,000 in the first half last year.
As anticipated, residential volumes have increased markedly, therefore, up by 65%, offset by a significant reduction in average selling price, which is down 19%. As always, the ASP reflects the mix of properties delivered in the period. By way of example, the comparative half year included Dumont on the Albert Embankment and Fulham Reach, and a focus on delivering our Central London forward sales following the outbreak of the pandemic. This time, we have a far broader spread of delivery across our regeneration sites and out of London sites. Today's announcement increasing earnings guidance for this and the next three years reflects modest increases in volume and pricing following a good six months of trading. Previously, we identified around 10,500 homes to be delivered over the current year and the next two financial years in the wholly owned group.
This will now rise slightly by around 3% across this three-year period, and we now introduce an estimate for FY 2025 of around 4,800 homes. We expect the average selling price to be in the range of GBP 580,000-GBP 590,000 for this and the next two financial years, rather than the GBP 570,000 guided in June, before reducing to around GBP 525,000 in FY 2025, much closer to the land bank. In terms of JV profits, I had indicated in June that for the current financial year, these would broadly double on last year's levels when we delivered GBP 22 million, and then increase twofold for the year ending 30th of April, 2023. For the current year, I now expect our JVs to deliver around a third more than previously indicated.
For each of the following two years, I expect JVs to contribute around GBP 100 million before returning to levels similar to this year when St Edward's current London developments will be largely complete. The reduction in JV contribution in FY 2025 coincides with a step up in group volumes as I've just set out, which rise towards 4,800 homes, some 33% higher than the average for the preceding three years. I am conscious we are providing quite specific estimates of delivery some four years out. These are based on the current market conditions, and the precise timing of delivery between periods will remain variable, as we will always prioritize quality over annual profit targets. Our joint ventures delivered 395 homes in the half year at an average selling price of GBP 558,000.
This compares to 145 sales at an average selling price of GBP 782,000 in the comparative period last year. The increased volume reflects higher delivery in our out of London sites, such as Courtyard Gardens in Oxted, Highcroft in Wallingford, and Hartland Village in Fleet. This mix has resulted in a lower ASP in the period. Having just run through our updated guidance, I will not dwell on the JVs further. Suffice to say that the significant increase in JV profits expected over the next two and a half years reflects completions on Millbank and Royal Warwick Square in St Edward and an increasing contribution from St William. Turning now to the income statement.
Revenue has increased by 36.3% to GBP 1.2 billion, reflecting the significant increase in volumes, albeit at a lower average selling price due to the mix of completions, as just explained. Gross profit has increased 19.8% to GBP 347 million, which is lower than the increase in revenue. This is a result of the very high gross margin in the first half last year, 32.3%. 28.4% this time is similar to the last full year, 28.8%. As a consequence, operating margin has also fallen from 25.4% to 22.2%. Again, the 22.2% is similar to the last full year when the operating margin was 22.8%.
The margin percentages earned in the first half this time and the last full year are reasonable proxies for the medium term. The profit contribution from the joint ventures was GBP 24.7 million, as anticipated, compared to GBP 6.6 million in the first half last year. Our net finance costs are GBP 5 million compared to GBP 3.8 million last time and includes the first time the carrying cost associated with the GBP 400 million Green Bond issued in August. The effective tax rate for the period has fallen to 17.5%, driven by the remeasurement of the Group's deferred tax asset in the period as a result of the higher future rates of corporation tax recently enacted.
This slide sets out the cash flows for the period, which resulted in a decrease in net cash of GBP 283 million from GBP 1.13 billion to GBP 846 million. The key movements are as follows. GBP 291 million cash generated from profits with a net inflow of GBP 21 million from working capital. There has been a GBP 55 million net investment in inventory, which I will run through in more detail shortly when I will also look at the creditors. The net investment in joint ventures increased by GBP 51 million, primarily due to the GBP 25 million of undistributed JV profits in the period, as well as additional cash funding into St. William. During the period, we paid tax of GBP 52 million.
Shareholder returns had a significant impact on cash during the period as we returned GBP 451 million by way of the B Share return in September. As a reminder, the GBP 451 million B Share return represented the first half of the surplus capital payment of GBP 228 million, alongside the remaining scheduled shareholder return for the year to March 2022 of GBP 223 million, GBP 59 million of this having been made through share buybacks before the start of the year. The next scheduled return will be the GBP 141 million for the six months to September 2022, of which GBP 35 million has been returned through share buybacks since September.
Looking forward, we anticipate cash at the year end to be around GBP 800 million, which means investing GBP 250 million in the balance sheet in the second half. This is unchanged from what we indicated at the year end, but will include investment in both work in progress and land, including our pipeline sites. As we continue through the investment phase, we continue to anticipate a further GBP 500 million net investment in the balance sheet in FY 2023 and 2024. Moving on to the balance sheet. Net assets have fallen from GBP 3.2 billion to GBP 2.9 billion in the six months due to the capital return offset by profits earned in the period. I will not go through each line on the balance sheet as I will run through the two big numbers, inventories and creditors in the next two slides.
This slide analyzes the GBP 57.5 million increase in inventories in more detail. The important movements to highlight are as follows. The overall land cost in the balance sheet has increased by GBP 7 million, meaning that the new land investment was slightly higher than the cost of that used in production in the year. Within this, the increase in land not under development of GBP 65 million reflects a combination of the unconditional purchase of a site in south-east London and the completion of the purchase of previously conditional contracted sites. This is offset by a GBP 58 million reduction in land work in progress. Build work in progress has remained neutral during the period, notwithstanding a period of high revenue delivery.
Completed stock has increased by GBP 51 million and we are comfortable at this level, which remains within historical parameters and is similar to the level in 2019, for example. Creditors before borrowings have increased by GBP 75 million in the period, principally due to increased activity on site. Customer deposits on the balance sheet are little changed from the year-end, reflecting the stable level of forward sales. Land creditors decreased by a net GBP 21 million and now stand at GBP 368 million, of which GBP 47 million is due for payment in the next 12 months. Finally, gross borrowings rose by GBP 100 million following the issue of the Green Bond in the summer.
Looking at the financing of the group, we began this financial year with GBP 750 million of bank facilities, comprising a drawn GBP 300 million term loan and a GBP 450 million undrawn RCF. Berkeley entered the debt capital markets for the first time in August, raising GBP 400 million of Green Bonds with a maturity in 2031 at a fixed coupon of 2.5%. We will use the proceeds to finance our ongoing regeneration activities, specifically in connection with the transformation of brownfield land and the development of energy efficient homes on our long term regeneration sites. In support of this issuance, Fitch published a long term investment grade rating of BBB- with a stable outlook.
Following this issuance, we repaid our GBP 300 million term loan and increased our revolving credit facility from GBP 450 million to GBP 750 million, which is currently undrawn. These facilities are in place until November 2023. The St William joint venture has banking facilities that remain at GBP 360 million, of which GBP 170 million was drawn at the end of October. This facility matures in March 2024, with an option to extend for a further year. Finally, this slide summarizes our land holdings at the 31st of October 2021. Estimated future gross margin has increased to GBP 6.94 billion from GBP 6.88 billion at the end of the previous financial year, with plot numbers remaining stable at 63,300.
We have therefore broadly replaced the 2,200 homes taken to sales in the period through two new site acquisitions and planning activity. Both sites acquired in the period are in London as Rob will set out. After accounting for the GBP 400 million of gross profit taken to sales, approximately GBP 450 million of gross profit has been added, split broadly, evenly between new sites and optimization and reappraisals. Thank you very much and I will now hand back to Rob.
Thank you, Richard. I would now like to focus on the following eight areas set out on the slide which cover an update on Berkeley strategy, operating performance and our guidance. In June, I spent some time setting out Berkeley's long term operating model, the complexities of our brownfield sites, alongside some examples of our regeneration activities. I won't repeat this, but do feel it is important to very briefly reiterate the key aspects of our model, as these really do differentiate Berkeley and explain why we have such good visibility over our delivery volumes, enabling us to raise our profit expectations. Fundamentally, Berkeley has a land led value-added approach. What I mean by this is that Berkeley never needs to compromise its disciplines.
We can acquire land selectively at the right time in the cycle where we believe we can add value over the long term through our placemaking expertise. We focus on complex, large scale brownfield projects in undersupplied markets and take a bespoke approach to each site. We have experienced highly skilled autonomous operating teams. When coupled with the appropriate financial strength, this ensures we make the right long term operating decisions for each of our sites, which unlocks their value. Berkeley is the only U.K. home builder focused on the regeneration of these brownfield sites at such scale. This map sets out our long term regeneration sites. We have acquired a site unconditionally in Peckham and currently have 30 brownfield regeneration projects. Each will deliver between 1000 and 6000 mixed tenure homes alongside new amenities and infrastructure. The majority of these sites are in London.
In the period, we have moved two further sites into production, Bermondsey Place in Southwark and the Eight Gardens in Watford. Therefore, we now have 25 of these sites under construction. These sites provide excellent visibility on the business plan for the next 10 years. Underpinning our unique operating model is our business strategy called Our Vision 2030, Transforming Tomorrow. This is a holistic approach to our day-to-day activities. It is a long-term ambitious plan covering 10 strategic priority areas. As set out on this slide, we've now taken some important steps. On climate action, we are currently focusing on three aspects. Firstly, in terms of our own operations, we are expanding our use of low carbon biofuel and electric and hybrid machinery. As an example, a recently completed 4-month trial using biofuels at Kidbrooke Village delivered an 89% reduction in emissions.
Secondly, we have completed our first 9-site embodied carbon study that will help us identify and mitigate carbon intensive processes and materials. From this, we have already identified 19 areas on which we can work to reduce embodied carbon in our developments. Thirdly, we are focusing on the energy efficiency of our homes, taking a fabric first design approach in combination with the most appropriate technology solution for each site. This includes trialing exhaust air heat pumps and air source heat pumps with heat exchangers transferring waste heat within the home. On nature recovery, we now have 43 sites committed to a net biodiversity gain that will create around 500 acres of new or measurably improved natural habitats. On communities, we have rolled out our bespoke social value tool, which enables our teams to quantify and compare the relative benefits of different development attributes.
We recently welcomed 60 construction apprenticeships and 30 graduates to our business to address the industry skill challenge. We now have over 10% of Berkeley employees in training. The Berkeley Foundation launched its new resilience fund, which aims to support small to medium-sized charities in developing their organizational resilience in the wake of the pandemic. I'm very proud of Our Vision 2030 and firmly believe it will challenge us to transform key parts of our business, which will enable Berkeley to continue as a leading company in this essential area. I'd now like to look at Berkeley's sales performance in the period and the wider market more broadly. For Berkeley, the value of our sales reservations during the first half is slightly ahead of the two years preceding the pandemic. This means the 20% reduction in sales experienced last financial year has fully reversed.
In London, we have gradually released more homes to the market as planned and in line with the improvement sentiment during 2021. Our sales prices remain firm and above our business plan and cancellation rates are at normal levels. Our cash deal forward sales is at GBP 1.7 billion. These forward sales provide a very strong underpin to our business plan over the next three years. The proportion of homes sold remains broadly 50/50 between owner occupiers and investors, with overseas customers accounting for the majority of investors. Turning to the market more broadly, Berkeley operates in a deeply undersupplied market. The latest government data shows new starts in London for the 12 months to June 2021 are around 17,000 homes.
This is still a third lower than the peak volumes in 2015 and materially below the Mayor of London's current London Plan target of 52,000 homes per annum. Completion volumes are nowhere near enough and will worsen over the coming years, with new starts at around 15,000-20,000 homes per year. In terms of demand, this continues to be underpinned by strong mortgage availability at low interest rates and London attraction as a global city. Affordability levels remain within historic parameters, with the main barrier being the deposit required. Now looking at land. Following last year where we brought 10 new sites into the land holdings, we've acquired a further 2two new sites in this half year. Both of these are in London.
Firstly, a shopping center in Peckham acquired unconditionally where we are targeting the delivery of over 900 new homes and a new supermarket. Secondly, a conditional site adjacent to the Royal Arsenal where we will seek consent to redevelop over 500 new homes. Reflecting our strategy, Berkeley's focus is on investing in its joint ventures and its own landholdings, bringing sites forward, including the 7,000 homes in the near-term pipeline. We will also look at new land selectively. If I now move to planning. We have secured one new major planning consent in the period, which is at St William's site in Leyton, where we'll be delivering 570 homes. We are currently concluding Section 106 agreements on two significant future brownfield sites in St William. These are sites in Bow Common and Bethnal Green covering 1,500 homes.
Additionally, we have attained over 25 planning amendments to optimize our sites. Planning is expensive and complex, with our urban brownfield sites having multiple and varied stakeholders. The planning system is under pressure through a lack of resources and difficulties in preparing local five-year plans. When coupled with the debate around the proposed changes to the National Planning Policy Framework, there is currently a hiatus in new planning consents being granted. This environment has resulted in the refusal of our proposals to redevelop the former police offices adjacent to our West End Gate development in Paddington. This site and a further significant regeneration site in St Edward are currently subject to a call in. Furthermore, we have two sites outside London at appeal, and are likely to go to appeal on two further sites in the second half.
Nonetheless, our strong existing land and planning position means we do not carry any significant planning risk in the next four years. In respect of current build costs, in the period we've experienced rises of around 5% per annum. These have largely been caused by material shortages. We have now began to see a gradual easing of supply constraints for most materials with lead time stabilizing. Shipping and transport constraints represent ongoing challenges for the supply chain. The recent increases in wholesale gas and electricity prices is resulting in further material price inflation. Berkeley continues to work with our supply chain partners to manage the supply constraints and maintain our production levels. We currently have over 11,000 people working across our sites in production, consistent with the position at April and more than prior to the pandemic.
While there are isolated pockets of labor shortages, particularly outside London, these are manageable and have had no impact to our programs thus far. Overall, the sales price, prices achieved are above our business plan levels, offsetting the impact of the cost increases. Turning to our modular factory in Northfleet. After an extensive period of prototyping and testing, Berkeley Modular has very recently begun to produce its first modules for our Kidbrooke Village development. Our longer-term objective remains to deliver up to 1,000 homes per year once the factory is up to full production, with each module leaving the factory floor fully fitted and finished. Lastly, in respect to building safety, we continue to work with all stakeholders, including the government, to find a solution which is risks based and fair to all.
Government guidance is due to be updated shortly, and we hope this will substantially resolve the ongoing uncertainty for homeowners, valuers, banks, and insurance companies. A building safety tax has been introduced at 4% of profits from April 2022, which will cost Berkeley over GBP 20 million in the year ending 13th of April, 2023. This is a very busy slide, but it does capture the strong planning and production status of our 94 development sites. The left-hand side of the table shows that our 30 regeneration sites comprise 72% of the plots in our landholdings, and 94% of these plots have an outline planning consent. The right-hand side of the table shows that 46 are in London and 48 are in Birmingham and the South East. Of course, on a plot basis, it is evident that 75% of our landholdings are in London.
We have completed four sites in the period and added two new sites. This leads to the reduction in the number of sites from 96 at the start of the financial year to 94. The sites in production have remained consistent at 64. We have 16 owned sites not yet in construction. Nine have at least a resolution to grant planning permission, significantly reducing the balance sheet risk in our landholdings. Of the 14 conditionally contracted sites, four now have at least a resolution to grant planning or better. The next two slides are the map setting out the location of all of our sites. I will not dwell on these, save to note that the two new sites added in the period in London are starred. Moving to outer London, we have 48 sites, which you can see on the slide. Turning briefly to our joint ventures.
St Edward is our joint venture with M&G, and it currently comprises 5,000 homes in our landholdings across six developments. No new sites were added in the period. Five developments are in production. St William is our joint venture with National Grid, and it currently comprises 12,800 of the homes in our landholdings across 19 developments. No new sites were added in the period. Sunninghill, a development of 76 homes in Berkshire, was moved into production during the period. St William also controls two long term sites that form part of Berkeley's near-term pipeline of 7,000 homes. These are at Kensal Green and Bromley by Bow. Consistent with previous guidance, we anticipate St William to be materially earnings enhancing by 2023, 2024.
Berkeley returned GBP 451 million in the first half, which comprised half of the surplus capital return and the remainder of annual shareholder return for the year to March 2022. We have announced the GBP 140 million shareholder return for the six-month period ending 13th of September 2022, and have returned GBP 35 million in the first half through buybacks. The second half of the surplus capital return is expected to be spent on land to meet our 2025 land target, which is the future gross margin in our landholdings totaling GBP 7.5 billion. We are in an investment phase and are forecasting increased expenditure in the balance sheet by GBP 700 million in the next two and a half years. Lastly, I conclude with a summary of our updated guidance.
We have raised pre-tax earnings expectations for the current year by around 5% from the previous guidance of GBP 518 million. For the next three financial years, we expect pre-tax earnings growth of around 5% per annum. Consequently, Berkeley anticipates delivering approximately GBP 625 million of pre-tax profits for the year ending 30th April 2025. Ongoing annual shareholder returns of GBP 282 million continue to September 2025, which is currently equivalent to GBP 2.52 per share. Thank you very much for your time today, and this concludes the presentation of Berkeley's results for the six months ending 31st October 2021.