PERSIMMON has reported that planning delays, supply-chain disruption and labour shortages meant it completed fewer homes than expected in the first half of the year.

Shares in the firm, one of the UK’s biggest housebuilders with sites across Scotland, were down almost six per cent in early trading.

Persimmon said there will be a slight fall in operating margin but said overall profits for the first half are set to be “modestly above our expectations” amid higher property prices.

Dean Finch, Persimmon chief executive, said: “As we rebuild our outlet position, delays in the planning system, disruption in material supply chains and challenges in securing labour have impacted completions in the period.”

Completions slid to 6,652 over the six months to the end of June, from 7,406 over the same period last year. The company said revenues dropped by 8.2% to £1.69 billion against the same period in 2021.

The group said build costs increased due to supply constraints, higher labour costs and energy inflation. However, it said the continued increase in house prices has offset these rises.

READ MORE: Persimmon shares down as fewer homes completed

It highlighted that demand across the country is still “strong” also, reporting that average private weekly sales are up 1% against 2021 levels.

Persimmon also said the group continues to invest in high quality land opportunities.

Mr Finch added: “I am pleased we have further enhanced our build quality in the period while also driving build efficiency to historical highs and increasing housing gross margin.

“We continued to complement this progress with high quality, disciplined investments in land driving growth in our outlet position.

“We have delivered this despite the significant on-going challenges being faced by the industry.”

During the period, 8,800 new plots were brought into the business across 37 locations. As at June 30, the group held around 89,000 plots in its owned and under control land holdings and around 100,000 plots in its strategic land portfolio.

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The results came as figures from Halifax on Thursday showed that average property prices rose 1.8% month-on-month in June, marking the biggest monthly rise since early 2007.

Laura Hoy, equity analyst at Hargreaves Lansdown, said: “The good news is that demand showed no signs of slowing, with the average house price continuing to climb and a strong forward sales position.

“That should be enough to prop up profits with management guiding for a slight beat at the half year.

“The market wasn’t overly impressed though, likely reflecting worries that this red-hot demand won’t last forever as the cost-of-living crisis continues to grow.”

Andy Murphy, director at Edison Group, said the number of homes delivered was “slightly lower than previously expected”.

“The average selling price increased 4% to £245,600, partly due to house price inflation and partly due to mix as it sold proportionally fewer units to housing associations,” said Mr Murphy. “Total revenue for H1 was £1.69bn, down 8%, but the company still expects H122 profit to be above its own expectations for the period.”

He said: “In March it reiterated its intention to return 235p share in 2022 which included the April payment. It also intends to return 110p/share on 8 July. These will be the last payments in respect of FY21.”

Shares in Persimmon closed down almost 5%, or 92.5p, at 1,772.5p.