York housebuilder Persimmon boosted by rising house prices as it reveals profits of £966.8m

But the York-based company said it could see disruption to the UK economy as a result of the conflict in Ukraine.

Economists believe inflation will rise higher as a result of tough economic sanctions on Russia and sky-high oil and energy prices hitting global economies.

Persimmon's chief executive, Dean Finch, said: "We are mindful of the growing risk of an economic impact as a result of the tragic conflict in Ukraine."

But the company remains positive for the year ahead overall, after a strong 2021 that saw house sales up and revenues rising.

The company said 2021 saw it complete 14,551 homes, compared to 13,575 a year earlier, with revenues hitting £3.6bn versus £3.3bn in 2020.

New home average selling prices also rose to £237,078 from £230,534 in 2020, helping pre-tax profits jump to £966.8m from £783.8m a year earlier.

Mr Finch said the company maintained build rates at pre-Covid levels and improved customer service during the year.

He added: "An agile approach across the business ensured we navigated the supply chain challenges posed by the pandemic, with our Brickworks, Tileworks and Space4 manufacturing facilities providing security of supply for essential materials and helping us maintain our operating efficiency."

The company will expand production at its facilities this year as it plans for further growth.

Persimmon bought 20,750 plots last year and expects to open 75 new outlets to sell properties from, the boss added.

The company had previously put aside £75m to fund any cladding issues following the Grenfell tragedy. It has identified 33 sites in need of work.

Bosses said they did not need to increase the pot at this time but said it has extended its search for affected properties by 30 years following requests from the Government.

Persimmon added it would not claim cash from the Government's Building Safety Fund.

Since the start of the year, private sales have been 2 per cent ahead of the previous year and volumes are expected to grow 4 per cent to 7 per cent on 2021 levels.

Richard Hunter, head of markets at interactive investor, said: “Persimmon has shown that the current clouds overhanging the housebuilding sector could soon be clearing.

“There are, indeed, some concerns which the company is prepared to acknowledge. General mortgage affordability has been brought into question, although availability has not.

“Higher build cost inflation is an obvious bugbear, while a rising interest rate environment could exacerbate an impending cost of living crisis.

“Meanwhile, legacy remedial works still linger in the background while, more broadly, the current geopolitical tensions are destabilising sentiment and the UK is no exception.

“Yet for all of these wider concerns, Persimmon has ploughed on regardless and is reaping the rewards of both a prudent land bank purchase scheme alongside careful management of its business.

“It also has some insurance from a healthy forward sales book, currently standing at £2.2bn and has seen private weekly sales rise by 9 per cent on the previous year, and by 22 per cent compared to pre-pandemic levels.”

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