Persimmon profits surge and costs fall

 
Kasmira Jefford
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PERSIMMON saw a pickup in summer sales and enjoyed a surge in first half pre-tax profits as the UK’s third largest housebuilder improved its operating margins and clamped down on development costs.

The York-based company, whose brands include Charles Church and Westbury, made an underlying pretax profit of £59.7m in the six months to the end of June, up 52 per cent on the previous year.

Chief executive Mike Farley said a slightly stronger market in its northern business helped boost sales in the last eight weeks by four per cent, while its total order book is now 10 per cent ahead of last year at £1bn.

This comes after a slowdown in the first half of the year when the number of new homes sold fell to 4,439 from 4,657 the previous year.

The average selling price also decreased to £162,647 from £168,936 in the first half of 2010 but Persimmon said the figure should improve due to a mix of larger private homes on its order book going forward.

Farley said the housing market “remains stable” helped by constant prices but would continue to be challenging due to the overall economic situation.

The company will pay an interim dividend of 4p a share, up from 3p a year earlier.

Persimmon’s shares climbed 3.4 per cent to 396p last night.