March 12, 2020 / 9:37 AM / in 17 days

UPDATE 1-Berkeley delays plans to increase shareholder returns

(Adds details on shareholder returns, analyst comments)

March 12 (Reuters) - British housebuilder Berkeley Group said it would delay its plan to increase shareholder returns until there was more clarity on the operational impact of the coronavirus outbreak on the UK economy.

The company’s shares fell 7% to 3792p at 0916 GMT.

Berkeley in January planned to more than double investor returns to 1 billion pounds ($1.28 billion) over the next two years, as a result of increased confidence in the housing market.

The company, however, on Thursday said that it would revert to its original plan of paying a 125 million pound dividend on March 31 and would further return 140 million pounds through share buy-backs and dividend payments on Sept. 30.

“...we are a bit surprised to see Berkeley roll back on its plans”, analysts at Davy Research said, adding that coronavirus impact represents a significant potential effect on the business.

“While there has been no noticeable impact on Berkeley’s business to date, the ultimate impact on UK business is unknown”, the housebuilder said in an scheduled trading statement.

The company, which operates primarily in London, Birmingham and southern England, said it still intended to make the increased returns but would reassess it in its full year results in June.

Berkeley said it was on track to meet market expectations for the full year ending April 30.

$1 = 0.7829 pounds Reporting by Samantha Machado in Bengaluru; Editing by Anil D'Silva and Shailesh Kuber

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