Jul 8, 2021
Dominic Ellis

Persimmon half-year revenues rise to £1.84bn

Persimmon
construction
Housing
UK
Persimmon delivered 7,406 new homes in the six months to the end of June and its forward order book totals £1.82bn

Persimmon recorded total revenues of £1.84bn (2020: £1.19bn, 2019: £1.75bn) in the half-year to June 30, according to a trading update provided to the London Stock Exchange this morning.

Dean Finch, Group Chief Executive, said the Group delivered 7,406 new homes in the six-month period and its forward order book at the end of June totals £1.82bn. 

"Customer demand for our new homes has been strong right across the UK with healthy sales reservation rates through the period," he said. "We are taking advantage of attractive land investment opportunities and successfully brought over 10,000 new plots into the business across 48 locations in the period. We remain focused on progressing our pipeline of new sales outlets through the planning system and into production, and on our ongoing build programmes, to provide improved stock availability and choice for our customers."

In response to its strong balance sheet and £1.32bn cash in the bank, it has accelerated payment of the surplus capital distribution of 110p per share for the year ending December 31, which will be paid on August 13.

The group's total average selling price has increased by 4.9% over the first half of last year to c. £236,200 (2020: £225,066, 2019: £216,942) reflecting the stronger market conditions experienced throughout the period. This includes 6,104 sales into the owner occupier market with an average selling price of c. £258,200 (2020: £246,208, 2019: 242,912). "Currently this house price growth is mitigating the effect of the upwards pressure being experienced on the industry's cost base." it states.

UK housing market fundamentals remain supportive with low interest rates, improving levels of mortgage availability, ongoing Government support and strong customer demand. The Group's average weekly private sales rate per site for the first half was over 30% ahead of 2020, the increase reflecting the unprecedented site shutdowns in 2020 due to the pandemic, and around 20% ahead of 2019, and rising prices in regional markets will continue to mitigate supply chain cost pressures. 

The number of Independent Quality Controllers has increased by 70% since 31 December 2020, with the aim of doubling the team by the end of the year. In addition, Persimmon has signed up to the 'Building a Safer Future Charter', which is aiming to raise standards and improve building safety culture and leadership, demonstrating the Group's commitment to raising build quality standards.

It said it welcomed the introduction of the New Homes Ombudsman to drive quality improvements throughout the industry.

As announced on February 10, the Group set aside £75m to assist with works to ensure the safety of residents of multi-occupancy properties built by Persimmon which contain banned cladding. All relevant management companies, managing agents, or building owners have been contacted and this work is progressing. The Group reached an agreement with the Competition and Markets Authority ("CMA") on its enquiries into the sale of leasehold houses, as announced on June 23.

Andy Murphy, Property Analyst at Edison Group, said "as is usual", the company gave no indication at this stage of profits or margins, which will revealed with the full interim results on August 18, but said the outlook for forward sales is encouraging. 

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