Persimmon shares leap following robust sales

Persimmon's average selling price rose by 4 per cent to 206,700, up from 199,127 in 2015
Persimmon's average selling price rose by 4 per cent to 206,700, up from 199,127 in 2015
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​Housebuilder Persimmon cheered shareholders with the news that ​private ​sales have risen ​15 per cent since the UK voted in June to leave the EU.

The York-based firm reported robust sales reservations during the autumn selling season, boosted by readily available mortgage deals.​
The ​g​roup’s average selling price ​rose by 4​ per cent​ to £206,700​, up from ​£199,127​ in 2015.​
Following the positive trading update, the group's shares rose 7 per cent to close the day at 1,940p.
However analysts warned that the ​triggering of Article 50 by March to kickstart leaving the EU ​could cause issues.​
​Analyst Charlie Campbell at Liberum said: "​We are concerned that the start of the formal application to leave the EU may increase uncertainty during the key spring selling season. Around a third of industry reservations are made between February and April.
"We expect better performance from the housebuilders once these risks have crystallised – our top picks are Persimmon, Bellway, Berkeley and Gleeson."
Persimmon said the strong demand seen in 2016 would be difficult to beat this year.
​​Chief Executive Jeff Fairbur​n said:​​​ ​"We're not anticipating big growth​.
"The first part of the year was a very good trading time for us in terms of sales so I think the comparables are going to be quite tough​ and perhaps a bit of uncertainty about trading​,"
Revenues for 2016 of £3.14bn were 8​ per cent​ higher​ and it legally completed 15,171 new homes, 600 more than in 2015.​
Pre-tax profit for 2016 is forecast to rise nearly 20 per cent to £755m, according to a Thomson Reuters poll of 12 analysts.
Persimmon has ​been ​hailed a strong perform​er over the past six months in the face of uncertain conditions caused by the Brexit vote in June.
"Buying a new-build home remains a compelling choice supported by competitive mortgage offers which continue to make a new home purchase very affordable​," said Mr Fairburn.
The group said that forward sales stood at around £1.2​bn at the end of 2016, up 12​ per cent​ on a year earlier.
Analyst ​George Salmon at Hargreaves Lansdow​n said: ​“With solid increases in average selling prices and legal completions, Persimmon’s growth continues despite the uncertainty around the UK’s impending exit from the EU.
​"​In fact, with margins and completions on an improving trend in recent months, many would argue that this is more than just a resilient update.​
​"​With a healthy balance sheet, demand outstripping supply and no sign of borrowing costs rising in the foreseeable future, Persimmon looks in a strong position.​"
However he warned against thinking that the housing market is ​unsinkable.
​"​The threat from Brexit is by no means passed, and with the average household budget set to be squeezed even further, the longer-term worry about what happens when interest rates rise lingers​," he said.​
​Persimmon opened 255 new development sites in 2016 and also bought around 18,700 plots of new land in 83 locations.
It said: "We continue to see good opportunities to acquire additional land whilst remaining mindful of the risks associated with the uncertainty arising from the UK's decision to leave the EU."
Construction industry survey data on Wednesday signalled a decent end to the year for the sector, with output rising at its fastest pace for nine months in December, supported by another strong showing from housebuilders.
The closely watched Markit/CIPS UK Construction purchasing managers' index revealed that housebuilding activity rose at the fastest pace since January 2016.

Persimmon's average selling price rose by 4 per cent to 206,700, up from 199,127 in 2015.

Persimmon's average selling price rose by 4 per cent to 206,700, up from 199,127 in 2015.