Persimmon bucks summer slowdown with profit jump

 
Kasmira Jefford
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PERSIMMON yesterday became the latest housebuilder to boast an impressive jump in first-half profits as would-be homeowners regained confidence following the outcome of the General Election.

The York-based housebuilder said profit before tax rose 31 per cent to £272.8m in the six months to 30 June, compared with £208.9m last year on revenues up 11 per cent to £1.3bn.

The performance was driven by a jump in the number of completions, which rose seven per cent to 6,855, while the average selling price increased by four per cent to £194,378.

Since July, Persimmon’s private sale reservation rate has been running five per cent ahead of the same period last year, which the company said was due to continuing “healthy customer demand”. Its land bank rose by 11,539 plots to 92,404 plots, while forward sales were 12 per cent ahead at £1.71bn.

Like its housebuilding peer Bovis, which reported strong half-year results this week, Persimmon has been boosted by the UK’s impressive house price growth.

Chief executive Jeff Fairburn said: “We are really pleased and we are pushing hard to increase the volumes to meet the demand.” He added that the rise in the average selling price was driven by the mix of properties it is selling as well as price inflation.

However, he insisted the prices remained affordable. “We don’t want to see prices rushing away. Some 56 per cent of properties sold were below £200,000 and we are keen to provide houses for first time buyers.”

Revenue at Persimmon was up 11 per cent on the same period last year to £1.33bn.

Its underlying basic earnings per share jumped 43 per cent to 78.6p.

“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,” Fairburn said.