Persimmon sees strong results
PERSIMMON is powering ahead with plans to open a further 85 sites.
The Yorkshire housebuilding group has today announced positive news ahead of its half year results to 30 June 2013, which will be released on August 20.
The York company said it has completed 5,022 new homes (2012: 4,712) in the first six months of the current year, an increase of 7% on the first half of 2012.
It said its its average selling price of £179,200 (2012: £171,206) for the first six months was 5% ahead of last year, mainly due to the continuing increase in the proportion of larger family housing in the sales mix. Underlying pricing remained stable throughout the period and total revenues for the first half of the year of £900m were 12% higher than last year (2012: £806.7m).
Visitors to sites during the first half of the year were 13% stronger than the prior year and cancellation rates remained at historically low levels of 16% (2012: 18%).
The group said that the Government’s Help to Buy 20% shared equity scheme, introduced in April, has generated a positive response from prospective homebuyers, bringing additional momentum to the traditionally stronger spring sales season. Persimmon has secured 1,124 Help to Buy reservations since launch.
It said: “Whilst our weekly private sale reservation rate for the first half of the year was 12% ahead of last year, our reservation rate as measured from the date of introduction of the “Help to Buy” scheme was 30% stronger.
“We are encouraged by the gradual increase in the number of major mortgage lenders supporting this Government initiative and anticipate that all the major lenders will be providing “Help to Buy” related mortgage products over the coming weeks. This will present a wider choice to customers and will help to support further increases in new home sales.”
In line with its plans, Persimmon has opened 90 sites during the first half of the year and is now operating from 385 active sites.
Persimmon said: “Maintaining this strong nationwide outlet network remains a key feature of our long term strategy, sales growth being largely secured through improvements in weekly sales rates. We believe this increase will support higher levels of return on capital on a sustainable basis, delivering greater free cash net inflows.
“We plan to open a further 85 new sites in the second half of the year and expect our active outlet network to remain stable at 385 sites through this six month period. While the process of achieving outline planning consents has continued to improve as a result of the Government’s new National Planning Policy Framework, the volume of pre-start conditions is delaying progress on a number of these developments.”
The business said it expects underlying operating margin to have increased to 15% in the first half of this year.
“We have now entered the slower summer weeks for the UK housing market and continue to experience stable conditions. In the context of the wider economic challenges consumer confidence remains fragile. However, we remain focussed on the delivery of the planned further growth of Persimmon and the successful execution of our long term strategy.”
