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Cautious gain at Persimmon

HOUSEBUILDER Persimmon yesterday remained cautious over the health of the housing market despite a stronger performance in the second half of 2009.

The FTSE 250 group said it completed the sale of 8,796 new homes during 2009, which generated a turnover of around £1.4bn. Almost 5000 of these properties were sold in the second half – up on the 4006 recorded during the first six months of the year. However, this is still down 12 per cent on 2008 when the housebuilder completed 10,202 sales with a turnover of £1.75bn.

Persimmon, which is the first in the sector to update the market, said that while there are signs of improvement, credit conditions remain tight.

“Whilst we will remain cautious until mortgage availability and the general economy improves, we have continued confidence in the long term future of the UK housing market,” the group said.

However, forward sales have picked up and stand 40 per cent ahead of last year at around £640m and above the £500m reported in November. “This gives us a good start to the year, although as usual we await the Spring selling season with keen interest,” Persimmon said in a trading update.

Meanwhile, net debt at the end of 2009 stood at £270m, down from £599m at the end of the previous year and a peak of £1.2bn in April 2008.

Analysts at Panmure Gordon said: “Persimmon’s trading update looks pretty much in line with our forecasts although the group’s performance on cash is ahead of what we would have expected at this stage.”

Persimmon added that its participation in the government’s HomeBuy Direct scheme is going well and it still has about £45m available to assist with the sale of about 2,500 homes.