Persimmon posts ‘excellent’ first half results

The company said its “excellent” start to the year saw sales up by 7 per cent year-on-year for the period, seemingly unaffected by any general election and Brexit fallout.

The Group’s increased legal completion volumes by 8 per cent to 7,794 new homes (2016: 7,238).

It also reported resilient consumer confidence and strong momentum moving into the second half having expanded revenues 12 per cent to £1.66bn on the back of a hoist in average selling prices 3.5 per cent to £213,000.

With sales remaining healthy through May and June in spite of the political uncertainty from the UK snap election, the weekly private sales rate per site for the first half was close to 7 per cent ahead of last year at 0.80.

As well as a network of 375 active outlets, sales through the second half of 2017 will be supported by the opening of a further 100 new sales.

The Group has also remained active in the land market with 47 new land deals for 9,300 new homes and pulling through 3,000 plots from its strategic land portfolio within this total, which represents 38 per cent of first half land consumption.

Persimmon’s land spend totalled £370m (2016: £305m) over the period.

At the period end Persimmon’s bank account was sitting at £1.12bn of cash - compared to £462m a year ago - prior to its paying of the scheduled cash return of £339m earlier this week.

Nicholas Hyett, an analyst at Hargreaves Lansdown said that “it looks highly unlikely that interest rates are going to rise rapidly, and we think households should be able to stomach a return to the 0.5pc base rate we saw before the referendum pretty comfortably”.

“In any case, Persimmon’s geographic diversity and relatively low exposure to London and the south-east means it’s less exposed to the areas where affordability has become most stretched and a rise in mortgage rates would be most damaging,” he added.

Persimmon’s performance also lifted the sector, with rivals Barratt and Taylor Wimpey also among the FTSE’s top five gainers.