By Karen Peattie
HOUSEBUILDER Persimmon has warned of “ongoing uncertainties” in the UK economy, including the “supply chain impacts of both Brexit and the pandemic”, as it reported revenue of £1.84 billion for the six months to June 30 – ahead of the same period in 2019 when the figure was £1.75bn
The York-based company, in a trading statement ahead of announcing its half year results next month, said that the housing market was supported by low interest rates and improving mortgage availability but highlighted uncertainty over employment levels and consumer confidence amid the continuing pandemic. Shares were down nearly 3 per cent in early trading.
Persimmon, which has an established presence in Scotland and currently has about 40 housing developments, pointed to record forward sales and continued investment north of the Border as it also revealed it has £1.82bn worth of forward orders across the UK. The firm noted that demand had returned to “almost pre-pandemic levels”.
Sale completions stood at 7,406 for the six months, close to the 7,584 seen two years ago, generating housing revenues of £1.75bn against £1.65bn) in 2019. The average selling price of a home also increased by 4.9 per cent to about £236,200, reflecting the stronger market conditions experienced throughout the period.
Dean Finch, the housebuilder’s group chief executive, said: “Persimmon performed well during the first half of the year delivering new home sales completions approaching the levels achieved in the first half of 2019.
“I am particularly pleased that we are continuing to achieve pre-Covid build rates across our sites while successfully maintaining higher levels of build quality and customer service. Customer demand for our new homes has been strong right across the UK with healthy sales reservation rates through the period. The group has an excellent forward order book at the end of June of £1.82bn.”
Mr Finch added: “We are taking advantage of attractive land investment opportunities and successfully brought over 10,000 new plots into the business across 48 locations in the period.
“We remain focused on progressing our pipeline of new sales outlets through the planning system and into production, and on our ongoing build programmes, to provide improved stock availability and choice for our customers.”
While noting the positive impact the vaccination rollout programme is having on the UK’s economic performance and prospects, he warned: “As the pandemic continues, we remain mindful of the ongoing uncertainties regarding the UK economy, including employment levels, consumer confidence, and the supply chain impacts of both Brexit and the pandemic.”
However, he stressed that the longer-term fundamentals of the housing market remain strong. “With the group’s UK-wide network offering new homes at compelling value, we are confident of Persimmon’s future success,” Mr Finch said, noting that improvements to selling prices across the company’s regional markets will continue to mitigate supply chain cost pressures.
“Our long-term strategy, which recognises the risks associated with the cyclical nature of the housing market by maintaining operational flexibility, investing in high-quality land, minimising financial risk and deploying capital at the right time in the cycle, will continue to ensure that the group is well positioned for the future.”
Mr Finch also pointed to Persimmon’s role in sustaining communities, noting: “Our average private selling price is circa 15% lower than the national average for new-build homes sold to owner-occupiers and in the period approximately 50% of our private new homes were delivered to first-time buyers.
“In addition, the group has delivered 1,302 new homes to its housing association partners for provision of new housing to lower-income families supporting the creation of inclusive communities across the UK.”
He added: “Persimmon is well placed for the future with a strong balance sheet and healthy liquidity. As such, we are pleased to announce the accelerated payment of the surplus capital distribution of 110p per share in respect of the year ended December 31, 2020, which will be paid on August 13, 2021.”
Persimmon’s developments in Scotland are located across the country, including in Edinburgh, Dundee, Fife, Ayrshire, Lanarkshire and East Lothian.
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