Another day, another housebuilder boasting impressive growth, after Persimmon said profits rose 31 per cent to £2.72.8m in the six months to the end of June.
You read that right: profits before tax rose 31 per cent to £272.8m, up from £208.9m last year. Meanwhile revenues rose 11 per cent to £1.3bn, while underlying earnings per share rose 43 per cent to 78.6p.
All that was driven by a jump in the number of completions, which rose seven per cent to 6,855, while the average selling price increased four per cent to £194,378.
Its land bank rose by 11,539 plots to 92,404 plots, while forward sales were 12 per cent ahead at £1.71bn
Alas, that wasn't enough for investors. Shares hit 2,089p in lunchtime trading, 1.5 per cent down.
Why it's interesting
As one of the UK's biggest housebuilders, Persimmon's results tend to be a bellwether for the UK's construction sector.
Like Bovis yesterday, the company has been boosted by the UK's impressive house price growth - but figures from the Office for National Statistics (ONS), published this morning suggested a cloud may be forming over the sector, as the Bank of England prepares to raise interest rates.
Persimmon's shares weren't the only ones to dip this morning: shares in rivals Barratt, Berkeley Group and Bovis all fell on the news from the ONS.
Despite the strong results, Numis downgraded the company's shares to hold, saying that while its update showed "impressive levels of cash generation and tight control of working capital has continued... we feel superior value exists elsewhere".
"In our view, this is a robust update and shows that Persimmon is capitalising on the strong market backdrop," it added.
What Persimmon said
Chief executive Jeff Fairburn said:
The group continues to take advantage of the current market opportunities to deliver sustainable growth whilst also utilising its excellent cash generation to build a strong asset platform for the future. We have now entered the traditionally slower summer weeks for the market. Our private sale reservation rate since 1 July is currently five per cent ahead of the same period last year which is a reflection of the continuation of healthy customer demand.
Although housebuilders continue to do well off rising UK house prices, the threat of an interest rate hike is beginning to loom.