Persimmon warns of housing market uncertainty despite £200m revenue hike
Persimmon Homes reported a an increase in revenues during the full year ending December 2022, but admitted the UK housing market “remains uncertain”.
The London-listed house-building company saw its revenues increase by £.3.8bn, from £3.6bn the previous year.
Underlying operating profit jumped four per cent year on year to over £1bn, from £973m in 2021.
Despite this, a hike in inflation has forced to group to warn that the number of homes it completes could fall to around 8,500 this year, down from 15,000 in 2022.
Persimmon also saw an increase in the price of the average home sold, £248,000 up from £237,000 the previous year.
“The market remains uncertain. Our marketing campaign has helped improve the group’s sales rates in the new year from the lows at the end of 2022, but they still remain lower year on year,” Dean Finch, group chief executive, said.
He continued: “The sales rates seen over the last five months mean completions will be down markedly this year and as a consequence, so will margin and profits. However, it is too early to provide firm guidance.”
In the year ahead, the group plans to invest £505.6m in local communities, including the delivery of 2,694 new homes.
Speaking to City A.M, Charlie Huggins, head of equities at Wealth Club, said: “Persimmon, like its peers, has seen a slight pickup in sales since the start of the year. But overall, the outlook for the year ahead remains downbeat.
“New home buyers are clearly exercising greater caution, and frankly who can blame them. Mortgage payments for first time buyers have significantly increased over the past year. When combined with the limited availability of high loan to value mortgages and the end of the Help to Buy scheme in England, it’s no surprise that the housing market has seen a marked slowdown”