Persimmon to pay dividend on sales rise

 
Marion Dakers
HOUSEBUILDER Persimmon resumed interim dividend payments on the back of a return to pre-tax profit yesterday, while the chief executive remained confident the firm can ride out turbulence in the market.

“We are 95 per cent sold up on our targets for the year, so I’m reasonably happy about our position,” said chief executive Mike Farley.

Persimmon’s underlying pre-tax profit for the six months to July was £39.4m, up from a loss of £16.7m in the same period last year. Revenue rose 27 per cent to £776.6m, thanks in part to a 16 per cent rise in sales.

The rise in house prices has also aided the company’s figures, with its average selling price rising 8.6 per cent on last year to almost £169,000.

Farley said just three per cent of this was due to underlying growth in house values, with the rest coming from a shift to more traditional homes after several years where cheaper apartments dominated.

“We were pushed by planning permission into building more flats than we would have preferred to in previous years,” said Farley. “Now we are getting broader planning permissions granted, which is great news as people prefer to live in houses.”

The firm has reinstated its interim dividend, paying out 3p per share.

“Whereas Bovis talked about maybe reinstating the dividend if conditions continue, Persimmon has gone one step further and re-instated the interim dividend, which in our mind is a clear sign of confidence.” said Anthony Codling at JP Morgan.

Shares closed 0.4 per cent at 348.1p, struggling to pick up from a 15-month low on Monday. Sentiment in property firms remains low following reports of a 27 per cent fall in home sales in the US yesterday.