Persimmon breaches £3bn in sales and dismisses Brexit fears

The York-based FTSE 100 firm​ said underlying pre-tax profits ​leapt​ 23​ per cent​ to £783​m in the year to December 31​ and visitor numbers have risen 7 per cent in the first eight weeks of 2017.

On top of the 110p per share special payment announced as a second interim dividend, ​Persimmon announced an additional payment of 25p to be paid on March​ 31​.

The group’s chief executive Jeff Fairburn said​: “The numbers are positive. The further increase in the dividend reflects our general confidence. We’ve got a lot to be pleased about. The results are really good.

“We are pretty confident about the first half and will sell into the second half soon.”

The group said the EU referendum created an immediate and significant uncertainty in the markets.

​However it said the vast majority of the group’s customers remained focused on exchanging contracts and completing their new home purchases​.

“​Customers are confident,” said Mr Fairburn.

“We saw that very quickly after the referendum​. Nothing will fundamentally change after Article 50 is triggered. If people see the economic climate change, that might make a difference, but if people have got jobs and access to mortgages they will want to buy new homes.”

He added that ​legal new home completions increased by 599 to 15,171 ​in 2016 ​and the average selling price rose 3.8​ per cent​ to £206,765 last year​.

​“Buying a new home really is affordable - that’s really important. If you can get a mortgage it’s very affordable to buy,” said Mr Fairburn.

“You can buy at a level that’s a lot cheaper than to rent.”

He said that the group has seen strong demand in Yorkshire.

“We’ve seen very strong trading in the Yorkshire area and we’ve made good strides. We are seeing good rates of sales and Yorkshire has been a good market for us,” he said.

Buyer demand and house prices have been surprisingly resilient since the referendum, thanks largely to rock-bottom borrowing costs after the Bank of England halved interest rates to 0.25​ per cent​ in August.

Persimmon also flagged the “overall shortage of supply of housing in the UK” as a factor providing support to the market.

Laith Khalaf,​ ​senior ​a​nalyst​ at​ Hargreaves Lansdown​, said: ​“The Brexit-shaped dent in Persimmon’s share price has now been almost entirely repaired by brisk trading and resilient performance from the UK economy.

​“​Business so far this year also appears to have continued in a manner which will confound sceptics and in a show of strength Persimmon is extending its already prodigious capital return plan, which will mean more cash paid back to shareholders.​“

He said that housebuilders have benefited from the ​​Government​’s​ Help to Buy scheme boosting transaction numbers, while a chronic housing shortage has pushed up prices too.

​“​Looking forward, the UK housing market shows little sign of pausing for breath in its steady upward climb, and low interest rates are likely to remain supportive for the foreseeable future​,” said Mr Khalaf​.

​“​This should enable the housebuilding sector to continue to make profitable progress, unless a sharp economic downturn materialises.​“

Analyst Clyde Lewis at Peel Hunt said: “Full year results came in ahead of expectations with PBT of £783m helped by a very strong operating margin performance.”