Listed house builder resting on strong foundations as demand rises

A Persimmon development

House builder Persimmon says its sales rates remain well ahead of 2019 levels, in a trading update published today for 1 July 2021 to 8 November 2021.

The York-headquartered business has reported a strong performance for the period, with average private new home sales reservation rate per site about 16% ahead of 2019.

Persimmon says it has a good platform for growth and expects to deliver a roughly 10% increase in legal completions in 2021 (2020: 13,575 legal completions) and £1.15bn of forward sales reserved beyond the current year (2019: £0.95bn).

And the company is in a strong financial position, recording healthy liquidity with a cash balance of about £895m at 31 October 2021 (2020: £960m).

Its update notes: “We continue to manage the current industry supply chain difficulties well, with our Brickworks, Tileworks and Space4 timber frame manufacturing facilities playing an important role in providing security of supply and mitigating some of the impact of rising materials costs.

“Persimmon continues to bring new land through into construction despite the well-documented planning delays suffered by the industry.

“Whilst these delays are frustrating for the communities we serve over the short term, with the healthy levels of early interest in these new developments we are receiving from customers, we remain confident they will provide a high quality platform in support of the future growth of the Group.”

Dean Finch

Dean Finch, Group chief executive, said: “Persimmon performed well through the period against a backdrop of healthy demand, with private sales reservation rates per site remaining well ahead of 2019, as sales followed a more normal seasonal pattern as expected when compared to 2020.

“We anticipate growth in new home sale completions for the full year will be c. 10% over last year, and healthy selling prices and our off-site manufacturing capabilities are mitigating inflationary pressures, to support our industry leading margins.

“While the industry continues to face challenges in the UK planning system, we are successfully bringing new land into construction and growing our already strong UK wide outlet network.

“With £1.15bn of forward sales reserved beyond the current year and a quality pipeline of new developments coming on stream, Persimmon has a robust platform to support its continued high quality growth.”

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