Persimmon defies UK housing slowdown with 30% profit rise
Housebuilder Persimmon has hailed strong results for the first half of 2017 in what it called a “confident market” in which consumer sentiment is “resilient”.
The group, which employs 4468 employees across the UK and has 81 staff at its York headquarters, turned in pre-tax profit of £457.4m for the six months to June 30 from £352.3m in the prior year period.
Revenue was up 12% to £1.66bn.
The group said legal completions increased 8% to 7,794 while average selling prices for its homes was up 4% to £213, 262.
It also said 9,319 plots of new land were secured in the period bringing consented land bank to 98,712 plots, and that current forward sales were 15% ahead at £2.005bn (2016: £1.747bn).
“The housing market across our regions remains confident and consumer sentiment is resilient,” the company said this morning.
“The potential headwinds of higher inflation are being mitigated by healthy employment levels and a competitive but disciplined mortgage market.
“Customers are finding good levels of support from mortgage lenders who have approved c.195,000 loans during the second quarter of 2017, a very similar level compared with the same period last year despite the heightened uncertainties associated with the result of the recent UK General Election.”
Jeff Fairburn, Group CEO, Persimmon
Jeff Fairburn, group chief executive, said: “The successful execution of the group’s long term strategy continues to support excellent trading results as seen again in the first half of 2017. Our focus on meeting market demand to deliver high quality sustainable growth in each of our 29 regional businesses is delivering excellent outcomes for our customers, our shareholders, and all our stakeholders.
“The market remains confident. Customer interest in our developments remains strong with encouraging levels of interest through both our websites and our sales outlets as we trade through the quieter summer weeks. Our private reservation rate over recent weeks is c. 2% ahead year on year. Whilst we remain vigilant to changes in market conditions we also recognise we are in a strong position to take advantage of opportunities that arise. We are looking forward to a good autumn sales season.”
“With a high quality land bank, very strong balance sheet and excellent forward sales the group has built a platform for its future success.”
Persimmon announced its commitment to return surplus capital of at least 110 pence per share to shareholders each July until 2021.
