Results ahead of expectations but the pre-close did under guide on margins. Earnings before tax and interest margins grew by 320 basis points despite the change in focus from growth to income generation and we are raising forecasts by around five per cent.
Whilst much of the news was trailed in July’s update, the key metrics are nonetheless impressive, with noticeable gains in revenues, legal completions, cash generation and operating margins. The group’s cash position has now turned net positive from negative.
Persimmon remains one of the best housebuilders operationally and its ...strong cash generation is second to none. But with the shares trading at a 20 per cent premium to our full year net tangible asset forecast, we feel the shares are currently up-with-events.