Persimmon confident with profits and revenue ahead of expectations
Housebuilder Persimmon is in bullish mood this morning after reporting a 9% rise in revenue for 2017, boosted by higher completion rates and selling prices.
Updating the markets ahead of its final results for the year to the end of December, Persimmon said revenues for 2017 of £3.42bn were 9% higher than the prior year (2016: £3.14bn) with legal completion volumes strongly ahead by 872 new homes (6% increase) to 16,043 (2016: 15,171). The group’s average selling price increased by 3% to around £213,300 (2016: £206,765).
Persimmon also said it anticipates pre-tax profits for the year to be modestly ahead of market consensus.
The housebuilder, which has its headquarters in York and is the region’s most valuable listed company, with a value of £8.5bn, said that since the launch of its group strategy in 2012 it has made a “significant contribution” to increasing UK housing supply by opening 1,189 new selling outlets and delivering 80,726 new homes.
Persimmon said it continued to experience healthy customer demand for new homes through the autumn sales season and the value of our forward sales at 31 December 2017 of around £1,355m was 10% ahead of the prior year (2016: £1,234m). Second half legal completion volumes of 8,249 were 455 stronger than for the first half of the year (H1: 7,794), an increase of 6%.
The group now has 375 active sales outlets which it anticipates will provide good support to sales moving into the 2018 spring selling season.
Persimmon said it has made “excellent progress” in expanding its manufacturing capabilities, with its new brick manufacturing plant in Harworth, near Doncaster, now complete and deliveries of bricks to site have begun.
“We continue to invest for future growth and have acquired c. 17,300 plots of new land at excellent margins in over 80 locations throughout the UK during the year,” Persimmon said.
“We remain mindful of market risks including those associated with the uncertainty arising from the UK leaving the EU. However, we are keen to deliver further improvement in our housing output and remain ready to invest wherever the local planning environment is supportive.”
The group’s final results will be released on February 27.
