24th Feb 2015 07:18
LONDON (Alliance News) - Homebuilder Persimmon PLC Tuesday joined peer Bovis Homes PLC in reporting a big rise in profit for 2014 driven by higher home sales at higher average prices, and said 2015 had got off to a solid start.
Like Bovis, which reported on Monday, FTSE 100-listed Persimmon expects a slight slowdown in the market around May's General Election, but said the improving UK economy and increased mortgage lender support would drive the market for 2015 as a whole.
Persimmon reported a pretax profit of GBP467.0 million for 2014, up from GBP337.1 million in 2013, as revenue rose to GBP2.57 billion, from GBP2.09 billion. Legal completions rose 17% to 13,509 homes, while its average selling price rose 5.3% to GBP190,533.
The company said its underlying operating margin, which excludes exceptional items and goodwill impairment, improved to 19.0% in the second half of 2014, compared with 18.4% for the year as a whole, up from 16.0% in 2013.
Return on capital employed rose 40% on the year to 24.6%.
Persimmon said it has had an encouraging start to 2015 and experienced a solid opening period to the spring season. Its current total forward sales of GBP1.49 billion are5% ahead of the same stage in 2014.
"This encouraging start has been supported by low cancellation levels, leading to our weekly private sales rate per site being 5% stronger than the prior year for the first eight weeks. The reduction of stamp duty on house purchases for the majority of home buyers introduced in the Autumn Statement last year is supporting sentiment and reducing costs for potential house buyers," it said.
By Steve McGrath; [email protected]; @stevemcgrath1
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