Persimmon records 'robust' performance over half year as it delivers 'strong' financial returns

House builder Persimmon today said it had recorded a robust financial performance over the last half year, as it delivered strong financial returns.

In the six months ended 30 June 2022, Persimmon said it had managed the balance of inflationary pressures effectively. Over the half year, profit before tax was £439.7m compared with £480.1m in the same period in 2021.

The company said its average private selling price of £267,325 is around 20 per cent below the UK’s national average, which it said demonstrated the enduring strength of its value offer to customers.

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Dean Finch, Group Chief Executive, said: “Persimmon continues to perform well. We are making important progress in quality, service, land investment opportunities and efficiencies to build an even stronger business, while continuing to deliver the strong financial returns that Persimmon is renowned for.

In the six months ended 30 June 2022, Persimmon said it had managed the balance of inflationary pressures effectivelyIn the six months ended 30 June 2022, Persimmon said it had managed the balance of inflationary pressures effectively
In the six months ended 30 June 2022, Persimmon said it had managed the balance of inflationary pressures effectively

"Demand for our attractively priced, high quality homes has remained robust, with our average private sales rates for the period being c.1% ahead year on year. Our customer satisfaction score is currently 92%.

"We have some exciting new sites coming into the business at industry-leading margins, with a land replacement rate for the period of over 130% and expanded production in our own brick, tile and timber frame factories, is further enhancing our supply resilience and cost efficiency, enabling us to re-iterate our guidance of 14,500 to 15,000 legal completions for the full year.

”We are on track to achieve a c.10% increase in our active outlets by the end of the current year as we work to rebuild our outlet position after a land buying pause three years ago and are tackling the on-going challenges in the planning system.

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Mr Finch added: "We are stepping up proactive engagement with local authorities, enhancing our approach to developing attractive communities and raising the bar on design to help mitigate planning challenges. We continue to expect our volume delivery to be significantly higher in the second half of the year.

“Our combination of compelling affordability and high levels of service and build quality, coupled with our well-located sites provides a uniquely strong and sustainable customer proposition. It is by strengthening this proposition further that we will achieve our ambition of becoming Britain’s best homebuilder for both customers and shareholders, consistently delivering high quality homes, excellent customer service and industry-leading financial returns.”

Richard Hunter, Head of Markets at interactive investor, commented: “The housebuilding sector is deeply out of favour with investors at the moment, even though its constituents continue to make hay while the sun shines, and Persimmon is no exception.

"Persimmon’s previous decision to bring some of the building production in-house is looking like an increasingly smart move in insulating the group from inflationary and supply chain issues."

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Matt Britzman, Equity Analyst at Hargreaves Lansdown, said: “Higher prices continue to offset an 8-10% rise in build costs, as Persimmon sees robust demand and low levels of cancellations.

"Revenue and profits have fallen, but that was expected given lower completions this year as strong demand over the last couple of years and a slowdown in spending in 2019/20 meant active outlets were lower than they could have been. Work is being done to fix that, with another 70 outlets planned to open in the second half and cash being funnelled into buying new land and bringing sites online, although planning permission continues to be a bugbear for the entire industry."

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