Good morning, ladies and gentlemen, and welcome to Berkeley's results presentation for the year ended 30th April 2022. I am Rob Perrins, Chief Executive of The Berkeley Group. This is a strong set of results from Berkeley in a complex and volatile operating environment. We have delivered GBP 551 million of profit in line with our enhanced guidance provided at our interim results. The first seven weeks of trading continues to be in line with last year, and we've now secured over 80% of all sales for the year ending April 2023. We have continued to deliver on our long-term Vision 2030 business strategy. This strategy really differentiates Berkeley, as can be seen by the homes we build and the places we create, alongside the significant progress made in the year in respect of Embodied Carbon Assessments, nature recovery, and skills.
We have acquired National Grid's 50% interest in St William, enabling Berkeley to achieve its objective to increase the future gross margin in our landholdings to over GBP 7.5 billion some three years ahead of schedule. In 2020, Berkeley identified GBP 455 million of surplus capital that would either return to shareholders or invest in incremental land by 2023. The first GBP 228 million of this was paid to shareholders as part of the GBP 451 million B share purchase in September 2021. The remaining of the GBP 451 million was the outstanding scheduled shareholder return for the year. The remaining GBP 227 million of this previously identified GBP 455 million surplus was put towards the acquisition of National Grid's 50% interest in St William.
Our focus is now on maximizing returns from our existing landholdings and will only acquire new land very selectively. This strategy, coupled with our forward sales and strong balance sheet, will enable Berkeley to achieve its three-year guidance for both profit and shareholder returns. We are mindful of current headwinds, be they market or regulatory-led, and we continue to adjust our strategy accordingly. I'll return to each of these points later, but will now hand over to Richard Stearn, our Chief Financial Officer, 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 landholdings. Where relevant, I will highlight any particular impact from the St William transaction completed in March. Beginning with a summary of performance for the year, we've delivered GBP 551.5 million of pre-tax profit, up 6.4% from GBP 518.1 million last time, slightly ahead of the increased guidance given during the year. Earnings per share is up 23.1% at GBP 417.8 . This is higher than the increase in pre-tax profits due to the impact of the share consolidation and further share buybacks during the year.
It is also impacted by the lower effective tax rate, which I will explain later. The operating margin is 21.6% compared to 22.8% in the prior year. Pre-tax return on equity was 17.5% compared to 16.5% last year, and remains ahead of our 15% long-term baseline. Looking at the financial position of the group, shareholders funds or net assets are GBP 3.1 billion, which is GBP 39 million lower than at the start of the financial year, following the return of surplus capital as part of the B share return in September last year. Shares in issue, net of treasury and those held in the EBT, have reduced by 8.5% to GBP 111.3 million, with the share consolidation accounting for 7.6% of this reduction.
As a consequence, net asset value per share has increased by 7.9% to GBP 28.18. Net cash is GBP 269 million, down from GBP 1.1 billion at 30th of April 2021, reflecting the B share return and the acquisition of St William. I will look at both of these in more detail later. In terms of future visibility, we have cash due on forward sales covering the next three years of GBP 2.2 billion. These are private sales only, so it does not include affordable homes and excludes joint ventures. This is a cash figure, not a revenue figure. Around GBP 400 million of this increase is attributable to St William. Approximately 55% of the forward sales relate to 2022-2023, 35% to 2023-2024, and the balance thereafter.
The estimated future gross margin in our landholdings has increased by GBP 1.4 billion - GBP 8.3 billion, and I'll talk more about this later. This slide highlights the key components of revenue and profitability. We sold 3,760 homes at an average selling price of GBP 603,000 in the year. This compares to 2,825 homes at an average selling price of GBP 770,000 last year. As anticipated, residential volumes have increased markedly up by 1/3 , which has been offset by an also anticipated reduction in average selling price of around 20%. As always, the ASP reflects the mix of properties delivered in the year. Last year, the delivery focus was on our central London forward sales following the onset of the pandemic.
This year, we've delivered across a broad cross-section of our regeneration sites. Looking forward, we anticipate volumes in each of FY 2023 and 2024 to increase to just over 4,000, before increasing by around 25% in FY 2025. The increase in volume now includes the St William delivery within the wholly owned group. ASP will remain slightly above the current level for the next two years before reducing to around 550,000 for FY 2025. I will look at the components of JV sales on the following slide, but from a future profit contribution perspective, this has of course reduced following the acquisition of St William. Putting all this together, as previously indicated, Berkeley anticipates delivering pre-tax profit of around GBP 600 million next year and GBP 625 million in the subsequent two years.
This will deliver a pre-tax ROE above our long-term baseline of 15%. I'm conscious that we're providing quite specific estimates of delivery some three years out. These are based on the current market conditions and the precise timing of delivery between periods will remain variable to some extent as we will always prioritize quality over annual profit targets. The joint ventures, which included St William until March, delivered 872 homes in the year at an average selling price of GBP 612 ,000. This compares to 429 sales at an average price of GBP 680,000 in the prior 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.
Over the coming two years, delivery is dominated by Millbank and Royal Warwick Square. Anticipate profit of around GBP 150 million combined across these two years, weighted more towards the current year, depending upon the timing of completions. Thereafter, the delivery is predominantly St Edward's out of London sites, and the profit will reflect this. Turning now to the income statement. Revenue has increased by 6.6% to GBP 2.3 billion due to the significant volume increase at a lower average selling price, as just explained. Gross profit has increased 4.6% to GBP 665 million, representing a gross margin of 28.3%. The operating margin is 21.6%, and we anticipate margins to be at around these levels for the next three years.
The profit contribution from joint ventures was GBP 56 million, compared to GBP 22 million last time, and includes the first completions at St Edward's Millbank development. Given its timing, the St William acquisition had a negligible impact on the income statement this year. Our finance costs are GBP 12.5 million, compared to GBP 6.6 million last time, and this now includes the cost associated with the GBP 400 million green bond issue in August. The effective tax rate for the period has fallen to 12.5%. This is driven by the remeasurement of the group's deferred tax asset in the year as a result of the higher future rates of corporation tax and the Residential Property Developer Tax now enacted. This is purely accounting, and for the avoidance of doubt, we paid cash tax on the profits earned in the year at the expected rate.
This slide sets out the cash flows for the year, which resulted in a decrease in net cash from GBP 1.1 billion to GBP 269 million. GBP 552 million has been generated from profits with a net outflow of GBP 133 million into working capital. This is largely accounted for by a GBP 333 million net investment in inventory, which I'll run through in more detail shortly when I will also look at the creditors. The investment in joint ventures increased by GBP 82.8 million, primarily due to the GBP 56 million of undistributed JV profits in the year, as well as additional cash funding of St William prior to its acquisition.
At GBP 540 million, the acquisition of National Grid's 50% interest in St. William is the most significant cash movement and includes the funding of St William's drawn net debt facilities on acquisition. The other particularly significant item is the GBP 515 million of shareholder returns. This is the GBP 451 million B share payment in September last year, and the GBP 63.7 million of subsequent share buybacks. The next scheduled return will be the GBP 141 million for the six months to September 2022, of which GBP 63.7 million has already been returned through share buybacks mentioned above. Looking forward, we are now targeting to be broadly working capital neutral over the next two years. I will not go through each line on the balance sheet, but I will run through the two key numbers, inventories and creditors in the next two slides.
You will see that I've separately identified the St William balance sheet at acquisition to assist the understanding of movements. What you can see here is the reversal of the equity accounted for investment in St William, replaced by the underlying assets acquired on acquisition. This slide analyzes the GBP 1.5 billion increase in inventories in more detail. GBP 1.1 billion of this increase relates to the acquisition of St William. The underlying increase is broadly in line with guidance. The overall land cost in the balance sheet has increased by GBP 1.2 billion. GBP 807 million relates to the acquisition of St William at an underlying increase of GBP 418 million. The increase related to St William includes all eight sites legally owned at the point of Berkeley gaining full control in March.
In addition, four sites subsequently legally completed before the 13th of April. As these four sites completed post the transaction, their land cost is included in the underlying increase of GBP 373 million, along with other sites acquired in the year. 11 of the remaining 12 St William sites have completed in the first quarter of the current year and will be on the balance sheet at 31 October with around GBP 150 million of associated land cost and creditor. Build work in progress has increased by GBP 222 million, which reflects a stable underlying position in the acquisition of the work in progress on the regeneration sites in St William. Completed stock has increased by GBP 35 million and this remains at a level we are very comfortable with.
Trade creditors and accruals have increased by GBP 126 million in the year, with GBP 96 million of this relating to the acquisition of St William. Customer deposits on the balance sheet have increased from GBP 790 million - GBP 931 million, again, the increase largely due to now including St William. Land creditors now total GBP 800 million, with St William at acquisition accounting for half of the GBP 413 million increase. The other land creditor increases relate to sites acquired in the year, including the four new St William sites completed post-acquisition. Looking at the aging of the land creditors, GBP 81 million is due in the current financial year. You can see from this graph that the remainder is spread reasonably evenly over the next nine years.
In terms of our financing, we started this financial year with GBP 750 million of bank facilities, comprising a 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%. In February, we refinanced our bank facilities, which increased in total from GBP 750 million - GBP 800 million.
The facilities are split between a GBP 260 million green term loan and a GBP 540 million revolving credit facility, which remains undrawn. These facilities are in place to February 2027, with the option to extend to 2029. At the year end, Berkeley was ungeared on a net basis with net cash of GBP 269 million and total available liquidity of approximately GBP 1.5 billion, taking into account these new borrowing facilities.
Finally, this slide summarizes our landholdings at 30th April 2022. Estimated future gross margin has increased by GBP 1.4 billion - GBP 8.3 billion. After accounting for the GBP 769 million of gross profit taken to sales through the income statement, around GBP 2.1 billion has been added. This can be broken down as follows. 45% relates to the impact of the St William transaction. 35% due to new sites added in the year. The remaining 20% relates to optimization and reappraisals. Looking at plot numbers, these have increased to 66,163 in the year. Before accounting for homes taken to sales, we have added just over 7,500 plots through site acquisitions and planning activity. These landholdings exclude some 8,000 homes in our near-term pipeline. Thank you very much, and I will now hand back to Rob.
Thank you, Richard. I would now like to focus on the following six areas set out in the slide, which cover an update on Berkeley's strategy, our operating performance, and conclude with our guidance. This slide serves as a reminder of the key features of Berkeley's land-led value added model. I set this out in December and so won't repeat the points of difference today. Berkeley's model is significantly different from a volume-based greenfield housing developer. Berkeley is the only U.K. home builder focused on the regeneration of large and brownfield projects at scale.
Reviving these underused spaces is vital to the success and vibrancy of the cities and town centers we work in today. It also creates an increasingly sustainable, socially inclusive, and lower carbon model for modern living. On the next two slides, I've set out two examples of this transformation. Firstly, at Grand Union, this derelict industrial estate has been transformed into a welcoming new part of Alperton, centered around a beautiful Canal side Piazza and landscaped open spaces.
A network of walking and cycling routes are reconnecting the neighborhood with its surrounding community, along with a waterside meadow, shops, cafes, restaurants, offices, a health center, a nursery, and a new 5,000 sq ft community center. The photo on the slide shows the first phase of social rented homes handed over to the council in January this year, alongside the restored canalside path. Secondly, the iconic Horlicks Factory, along with its clock tower and 47-meter chimney, will form the historic centerpiece of this new neighborhood close to Slough Town Center. Within walking distance of a Crossrail station, this 12-acre regeneration site will provide up to 1,300 homes, high quality public open space alongside a new community square, a nursery, and a cafe. This map sets out our major brownfield regeneration sites, the majority of which are in London.
We have 26 of these sites in production, where patient and sustainable investment is transforming disused land into unique and highly sustainable mixed-use neighborhoods. Underpinning our unique operating model is our business strategy called Our Vision 2030, Transforming Tomorrow. Today, I'll briefly touch on three important areas, climate action, nature, and future skills to highlight the significant progress Berkeley is already making. Berkeley has Science Based Targets in place to reduce its Scope 1 and 2 emissions by 50% and its Scope 3 emissions by 40% by 2030. 99% of Berkeley's carbon impact relates to its Scope 3 emissions, around 75% of which comprises activities within our supply chain, and the remainder relates to the energy used by our customers. Focusing on the former, we have undertaken 15 groundbreaking Embodied Carbon Assessments this year.
These detailed studies have provided us with previously unavailable insight and data into the carbon within our development activities. They have also shown us that our sites are already performing 30% better than business as usual industry benchmarks. When added to the work we have previously done on the in-use carbon in our homes, we now have a roadmap for achieving our stretching Science Based Target. In relation to our direct Scope 1 and 2 emissions, we have already reduced our absolute emissions by more than 40% from our 2019 baseline year for Science Based Targets. In terms of nature recovery, Berkeley continues to lead the industry in actively reversing biodiversity loss. In 2017, we were the first U.K. home builder to commit to measurably increasing biodiversity on every new site we develop.
We now have 46 developments committed to a net gain, delivering over 500 acres of new or improved natural habitats. On average, these sites deliver a 400% net gain compared to the now mandated 10%, demonstrating the value to nature of regenerating brownfield sites. In terms of tackling the skills shortage, more than 9% of Berkeley's employees are in earn and learn roles, which cover apprenticeships, graduates, and sponsored students, exceeding our pledge as part of The 5% Club. This year, we developed a bespoke construction site management apprenticeship in partnership with Farnborough College. We brought 60 new construction apprenticeships onto this program in September, and we now have over 140 apprentices in our business. I would now like to look at Berkeley's sales performance in the wider market conditions.
For Berkeley, the value of our sales reservations have been sustained throughout the year at levels slightly ahead of the two years preceding the pandemic. Demand is robust across domestic and international customers. London's status as a global city has not diminished, and as anticipated, people are returning to urban living and office working. The proportion of homes sold remains broadly 50/50 between owner occupiers and investors, with overseas customers accounting for the majority of the investors. Pricing has been firm, and we sold above our business plan level throughout the year, covering build cost increases in the year. Turning to the market more broadly, the fundamentals of the markets are currently favorable, with only 17,000 new starts in London, according to government data, compared to an annual requirement of over 90,000 new homes. This is highly unlikely to change and therefore the market remains structurally unsupplied.
Although not quite a start, the picture is similar in the southeast. Mortgage availability is strong with a competitive lender market and government policy supportive of mortgage lending. Although interest rates are rising, they are doing so from a very low base, and the cost of ownership continue to compare favorably to renting, with rents increasing significantly in the year. Access to a suitable deposit, therefore remains the key barrier to purchasing. Berkeley has added four new sites and over 6,000 homes to its land holdings during the year. These include a shopping center in Peckham, the Ram Brewery site in Wandsworth, a site in Guildford by St Edward, and a site in Milton Keynes transferred from the long-term pipeline. As part of the St William transaction, we unconditionally contracted three new sites from National Grid, which have gone into the long-term pipeline and total around 5,000 homes.
These are Beckton, East Ham, and New Barnet. Following the St. William transaction, Berkeley will only acquire new land very selectively. We have secured six new planning consents in the year. These are at Milton Keynes, Leighton, Bethnal Green, Bow Common, Frimley, and Reading. The planning system is struggling to cope for a myriad of reasons and is highly uncertain, demonstrated by Berkeley unusually having three sites which are currently subject to call-in. These are at Syon Lane, Paddington Green Police Station, and Tonbridge in Kent. We also have two applications at appeal, Effingham and Bury St. Edmunds, which again is unusual. The Levelling-up and Regeneration Bill recently placed before Parliament will involve huge change.
We strongly advocate that large complex regeneration sites remain subject to locally determined Section 106 obligations rather than the proposed Infrastructure Levy, and also that they are not constrained by design codes, as this will limit the vast social value that comes when these important strategic sites are brought forward. With respect to build costs, we have seen these increase throughout the year due to a number of macro events. Overall build costs are up between 5% and 10%, depending upon the mix and composition of materials and the impact of regulatory changes. However, supply conditions do appear to be stabilizing, supported by a recent decline in material price volatility. Labor in terms of both supply and cost is steady. Turning to our modular factory in Northfleet, we've now produced our first modules, which are being delivered and installed at Kidbrooke.
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, Berkeley is focused on ensuring its buildings achieve the required EWS1 certification for mortgage purposes. We have obtained these on 99% of our relevant freehold buildings. In the last six months, the government replaced the Consolidated Advice Note with PAS 9980, which is a proportionate risk-based approach that we fully support. We are now carrying out these assessments on all relevant buildings and will undertake any works necessary to address life-critical fire safety issues.
Berkeley has signed the Developer Pledge with assurances from government that an appropriate arbitration process will be established and that all assessments should be under the PAS 9980 methodology. It's our preference to take full responsibility for all our buildings and to complete any required works ourselves. Between the developer levy and the 4% RPDT, Berkeley believes the U.K. house building sector has played a full part in resolving this issue. Any further levies would be unfair and would constrain delivery and innovation across the industry. As ever, this is a very busy slide, but it does capture the strong planning and production status of our 89 development sites. The left-hand side of the table shows that our 32 regeneration sites comprise 71% of the plots in our land holdings, and 87% of these plots have an outline planning consent.
The group has 89 sites, of which 29 are not yet in construction. 26 of these are owned or unconditionally contracted, 12 of which were previously controlled within the St William joint venture. We now have just three sites which are conditionally contracted, two of which are in St Edward. These next two slides are the map setting out the locations of all our sites. We have 43 sites in London, of which two sites were acquired in the year which are starred. Moving to outside London, we have 46 sites which you can see on the slide, with the two new sites also starred. Lastly, I conclude with a summary of our guidance. We anticipate pre-tax profits to be approximately GBP 600 million for the year ending 30th April 2023, and GBP 625 million for the following two years.
Beyond the three-year guidance period, we are targeting a sustainable 15% pre-tax return on equity. Berkeley is targeting being working capital neutral over the next two years. The focus will then be on returning surplus capital over and above the current annual scheduled payments to shareholders. Ongoing annual shareholder returns of GBP 282 million continue to September 2025, which is currently equivalent to GBP 2.54 per share. Thank you very much for your time today. This concludes the presentation of Berkeley's results for the year ended 30th April 2022.