Persimmon ‘encouraged’ by confidence in UK housing market
Releases its third quarter Interim Management Statement, which covers the period from 1 July 2014 to 3 November 2014, the Group said visitor levels have matched those of the prior year despite the tough comparatives generated by the strong growth in interest on its sites following the UK Government’s introduction of the Help to Buy measures in April 2013.
Persimmon is now fully sold up for 2014 with limited further stock availability for the current year. However, it continues to experience good forward reservation interest and have c. £696 million of forward sales reserved beyond 2014, an increase of 12 per cent on the same point last year (2013: £622m).
According to the Interim Management Statement: “All of the Group’s twenty-four businesses across the UK remain focussed on maximising the value of every new home sale. This tried and tested approach is delivering the superior margins and cash generation which are at the core of our long term strategy.
“With cancellation rates running at the historically low levels we have been experiencing for some time, our private sale reservation rates are c. 2 per cent lower than those for the same period last year, notwithstanding the tougher comparatives which were c. 45 per cent ahead of 2012.
“Despite the ongoing improvements to the planning system, opening new development sites without undue delay continues to be one of the industry’s main constraints. Whilst we have successfully opened 80 of the 100 new sites planned for the second half of the year, our desire to modestly increase our overall outlet numbers remains a challenge. We are currently selling homes from c.375 active development sites.
“The recovery of the UK mortgage market continues to mature, providing improving support to customers whilst also ensuring the required disciplines are in place to support a more stable and sustainable outlook for the housing market.”
The statement added: “The delivery of the Group’s long term strategy is dependent on investing in new replacement land both at the right time in the cycle and at values that will produce superior returns and cash generation over future years. The Group has continued to secure excellent sites totalling c. 7,500 plots of land since 1 July, with over 4,000 plots being converted from the Group’s strategic land portfolio. At this point we remain keen to invest in high quality land to support the growth of the business towards optimal sustainable scale.”
Persimmon will give a further update on progress and trading following the year end on Wednesday 7 January 2015.