Weak house price growth has failed to take its toll on housebuilder Persimmon, as sales jumped in the first few months of 2017.
In an update ahead of its AGM today, Persimmon said total forward sales had risen 11 per cent to £2.6bn over the past four months, while weekly forward sales had jumped 12 per cent year-on-year since it reported its results in February.
Persimmon said it had sold 8,928 homes into private ownership so far this year, at an average price of £229,500, up 4.1 per cent on last year.
It also confirmed a scheduled dividend payment of 110p per share, a total of £338m, will be paid out in early July.
Shares edged up 0.6 per cent to 2,299p in early trading.
Why it's interesting
Housebuilders were particularly hard-hit after the Brexit vote, which wiped almost 40 per cent off Persimmon's share price as investors worried about the potential hit to house price growth - which, in the intervening months, has unarguably slowed down.
But although it admitted its sales rate had slipped in its February results, it has bounced back, while shares have more than recovered since their EU referendum wipeout.
What's impressive is not only has Persimmon increased sales in a less-than-helpful environment, but it's done it against this time last year, when sales surged ahead of the introduction of a punishing rise in stamp duty for buyers of buy-to-let property.
However, it isn't without its controversy: today Reuters reported investor Royal London Asset Management was planning on voting against pay-related issues, including the remuneration report, the re-election of the chair of its remuneration committee and the re-election of remuneration committee member Nigel Mills.
Still, Persimmon was one of the biggest winners from the government's housing white paper, published in February, which outlined measures to build more than 25,000 homes by 2020. With housebuilding likely to be at the centre of all the parties' election manifestos, expect Persimmon sales to stay strong.
What Persimmon said
Persimmon's operational performance continues to be excellent, with the group delivering higher volumes of newly built homes in local communities across all our regional markets, supported by the resilience of the UK economy. The prevailing disciplined approach to mortgage lending is enabling customers to buy newly built homes on attractive but sustainable terms.
What analysts said
Robin Hardy, of Shore Capital Markets, said:
A positive trading update today which, unusually, uses the word "excellent" to describe the market climate.
We are becoming more cautious on selling price momentum and mortgage market liquidity as we progress through 2017 so there may be more headwinds later in the year. We do not expect any impact from the election at this stage.