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Persimmon full-year profits up

HOUSEBUILDER Persimmon posted a 52 per cent increase in full-year profit, beating analysts’ expectations, as government lending schemes helped to boost access to mortgages.

York-based Persimmon, Britain’s largest builder by market value, said today its strong performance had continued into 2013 and forward sales had reached £1bn.

Pre-tax profit for the year to December 31 climbed to £225.1m versus £148.1m in 2011. Revenue rose to £1.72bn, up 12 per cent.

Britain’s housebuilders have largely coped with a stagnant property market thanks to snapping up cheap development land at the depths of the financial crisis, selling more expensive family homes rather than flats, and building homes in the more affluent south, where house prices have stayed strong.

They have also benefited from government schemes such as Funding for Lending and New Buy which seek to free up mortgage lending, stoking investor optimism in the sector and lifting housebuilders’ share prices over the past year.

“Mortgage availability remains the key constraint to the housing market. However, there are some signs that lenders are embracing the Government’s Funding for Lending scheme and we have seen some recent reductions in mortgage rates,” Persimmon chairman Nicholas Wrigley said.

Separately, Bovis Homes reported 2012 pre-tax profit of £54.1m, up 69 per cent on 2011. That beat the 60 per cent rise expected by 15 analysts in a Thomson Reuters poll.

Persimmon, whose brands include Persimmon Homes, Charles Church and Westbury Partnerships, said it had completed 9,903 homes over the year, up from 9,360 in 2011, and that its average sales price rose 6 per cent to £175,640.

It added about 14,800 plots to its land bank over 2012, taking the total to 68,200, representing 6.9 years of supply.

The company said last month its chief executive of seven years, Mike Farley, was retiring in April and would be replaced by Jeff Fairburn, the group’s managing director and chief executive of its northern division.

In February last year Persimmon announced a plan to return £1.9bn to shareholders over nine years. The company said it was on track to make its first dividend payment of 75 pence per share in June 2013.

Shares in the company, which have surged by more than 40 per cent over the past year, closed at 909.5 pence on Friday, valuing the company at £2.77bn.

 

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