Solid progress for Persimmon
YORKSHIRE housebuilding group Persimmon has today announced positive results reflecting a period of “solid progress”.
In its half year results for the six months ended June 30 2013, the York-based company reported revenue 12% ahead at £899.9m (2012: £806.7m) and said underlying pre-tax profits increased by 40% to £135.3m (2012: £96.9m).
The group reported a “strong” investment in new land of £236m (2012: £142m) and said 7,538 new plots have been acquired, bringing the total of owned and controlled plots to 70,716 (2012: 63,786). Legal completions are up 7% to 5,022 (2012: 4,712), it said.
As reported earlier this year, Persimmon is also powering ahead with its plans to open a further 85 new sites before the end of the year and is building on all sites where it has an implementable planning consent, creating new jobs in the process.
Chairman Nicholas Wrigley said: “During the first half of 2013 we have invested further in the business in support of increasing our future volumes.
“Persimmon’s results for the first half of 2013 reflect a period of solid progress, with further increases in output, operating margin and cash generation, against a backdrop of improving customer demand.
“In addition to good growth in sales and profits we have also reached our target margin range of 15-17% eighteen months ahead of plan. Our focus remains on the delivery of our long-term strategy and we are well placed to continue to make good progress.”
Persimmon, which was promoted to the prestigious FTSE 100 Index – returning it to the ranks of the UK’s leading companies – this year, said it is working hard to increase production in response to the improved demand evident in all of its regional markets, investing to support sustainable growth and increasing output significantly from its Space4 factory, which specialises in timber frame modules for the social housing market.
Wrigley said: “To deliver the volume to meet this increased demand, we are maintaining our strong investment in land and stepping up our investment in construction.”
Persimmon’s multi-year trade apprenticeship programme has been expanded and will see over 100 apprentices join the business each year and a corresponding programme of new hires in technical, managerial and sales functions across its office network.
The group said through the second half of this year it will continue to focus on the basics of good housebuilding to deliver further improvement in the performance of the business. It said it anticipates the business will continue to make good progress but we remain mindful of the wider economic challenges facing the UK economy.
Yesterday, UK housebuilder Bovis Homes also reported an increase in profits. Pre-tax profits rose 19% to £18.6m in the six months to the end of June, with average prices up 15% to £188,500.
Persimmon’s positive results follow TheBusinessDesk.com’s story last week, which reported that the housing market in Yorkshire and Humber has finally turned a corner as more buyers continued to return to the market last month according to figures.
The first payment of £228 million of surplus capital under Persimmon’s Capital Return Plan was made on June 28 2013.
Persimmon said: “Our strategic plan aims to return £6.20 per share, a total of £1.9bn of surplus capital, to shareholders by June 30 2021, whilst also growing the business. The board has indicated an intention to make a payment of 10 pence per share in June 2014 in part acceleration of the next scheduled payment of 95 pence per share in June 2015.”
