Housebuilder Persimmon upbeat on profits hike
HOUSEBUILDER Persimmon reported strong growth in annual underlying pre-tax profits this morning as it stressed its strong position for when the housing market recovers.
The group saw underlying pre-tax profits increase to £95.5m in the year ended December 31, compared to £7m the previous year.
Revenues were 10.5% higher at £1.57bn, while legal completions increased 4.5% to 9,384 new homes.
Group chairman John White said: “Despite a continuing low level of mortgage approvals, the group is achieving improving returns and remains well positioned for the upturn in the housing market when it occurs.”
Mr White described Persimmon’s performance as “excellent” despite challenging conditions and said the results reflected the successful implementation of the group’s strategy of firm cost control, maximisation of sales revenues and pursuit of strong cash generation.
On the outlook for the market he said: “Of course, we would like to see an increase in mortgage approvals and an increase in loan to value products for first time buyers. However, the organisation, scale and cost base of the group enable us to operate successfully at the current levels of activity.”
The average selling price of a Persimmon home was £167,249 – 5.7% ahead of last year.
Persimmon reported pre-tax profits of £153.9m following net exceptional credit of £63m and underlying operating margin more than doubled to 8.2%.
The group acquired around 10,200 plots during 2010 and said its forward sales were strong at £848m. It also has a landbank of around 59,000 plots owned and under control, which represents six and a quarter years supply.
Persimmon is paying a final dividend of 4.5p per share to bring the total dividend for the year to 7.5p per share.
