23rd Aug 2016 08:08
LONDON (Alliance News) - Blue-chip housebuilder Persimmon PLC on Tuesday said visitor numbers to its sites since the UK vote to leave the European Union are 20% ahead of a year earlier, after first-half pretax profit rose 29%.
Persimmon noted that the result of the referendum had created increased economic uncertainty and pointed to a "modest increase" in cancellation levels following the outcome of the vote. However, Persimmon said cancellations have now returned to normal levels and are slightly lower than the level a year earlier.
Customer interest since the referendum result has been "robust", with private sale reservation rates since July 1 17% ahead of the same period a year earlier, the housebuilder added.
Persimmon said it was currently trading through the traditionally slowed summer weeks, but said it anticipates a good autumn sales season due to the cost of mortgage funding remaining at compelling levels and the confident housing market across its regions.
Persimmon said it was encouraged by continued healthy demand for mortgage support, with lenders approving 198,000 loans for house purchase during the second quarter of the year. This is a similar number to the same period a year earlier when levels were buoyed by the UK General Election outcome.
Persimmon said it plans to increase its build activity and productivity to continue the sustainable growth of the business and reach optimal scale in each of its regional markets.
This strikes a different tone to fellow FTSE 100-listed housebuilder Barratt Developments PLC which last month said it would look at potentially slowing its build programmes in light of the Brexit vote.
"We remain vigilant to any changes in market conditions in the light of the challenges that the country faces. However, we remain focussed on achieving the best outcomes for our shareholders based upon a high quality land bank which will support the future development of the business," Persimmon said in its results.
Persimmon noted that a key priority remains the maintenance and enhancement of its strong outlet network in each of its regional businesses, and said it has opened 48 new sites so far in the second half of its year. The housebuilder plans to open a further 90 new outlets during the rest of the second half, it said, which should drive a further improvement in its gross margins.
Shares in Persimmon took a heavy blow from the referendum outcome, having fallen 12% since the result was announced.
However, shares were up 3.1% at 1,850.00 pence on Tuesday morning, amidst the more positive outlook and in light of a strong first half.
The group said its pretax profit for the six months to the end of June was GBP352.3 million, up from GBP272.8 million a year earlier, after revenue grew to GBP1.49 billion from GBP1.33 billion.
Persimmon said it sold 7,238 homes in the half, from 6,855 a year earlier, with the average selling price of those homes GBP205,762, 6.0% ahead of the prior year.
Persimmon said it secured 7,108 plots of land in the half, bringing its consented land bank to 93,519 plots, and said its current forward sales position is at GBP1.75 billion, 2.0% ahead of the prior year.
Persimmon said it has 5,836 new homes sold forward into the private sales market with an average selling price of GBP224,200, compared to the 6,149 homes with an average selling price of GBP213,000 recorded a year earlier.
The company said it was not paying an interim dividend in line with a year earlier, but made its fourth payment of surplus capital under its capital return plan of 110p per share during the period.
"While the result of the EU referendum has created increased economic uncertainty, customer interest since then has been robust with visitor numbers to our sites around 20% ahead year on year. Our private sale reservation rate since July 1 is currently 17% ahead of the same period last year. The group is now trading through the traditionally slower summer weeks but customer demand remains encouraging and we anticipate a good autumn sales season," said Chief Executive Jeff Fairburn.
By Hannah Boland; [email protected]; @Hannaheboland
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