9th Jul 2020 08:35
(Alliance News) - Persimmon PLC on Thursday said it expects to report a 32% decrease in revenue in the first half after the UK's Covid-19 lockdown, but has entered the remainder of the year in a "strong position".
Persimmon shares were trading 4.7% higher in London on Thursday at 2,546.63 pence each.
The housebuilder said it expects to report revenue for the six months to the end of June of GBP1.19 billion compared to GBP1.75 billion delivered a year prior, as new home legal completions fell to 4,900 from 7,584.
Average selling price in the first half was GBP225,050, higher than GBP216,942 a year ago.
Total land holdings as at the end of June stood at 89,200 plots, down from 93,246 plots the year earlier. Over 850 plots were added in the first half, Persimmon said, compared to 3,582 the year before, with total cash spend of GBP165 million, including land creditor payments of GBP105 million.
Persimmon highlighted that the use of online resources ensured sales continued through the lockdown period, with 1,600 gross reservations secured in the nine weeks ended May 17.
The FTSE 100-listed company also said it has seen good activity in the six week period since sales offices re-opened in mid-May, with average weekly net private sales reservations of 278 new homes, around 30% higher than the same period last year.
Customer enquiries remained at "healthy levels" throughout the lockdown period, Persimmon added.
Looking forward, the company said it has an order book with forward sales of new homes as at June 30 of GBP1.86 billion compared to GBP1.62 billion the year before, a 15% increase.
Persimmon said it is committed to providing "homes for all", with a private average selling price of GBP246,200 in 2020 versus GBP242,912 in 2019, 17% below the UK national average.
"We enter the second half in a strong position, with work in progress well advanced, forward sales 15% ahead year-on-year, and cash holdings of GBP830 million. Our financial strength and the agility of the business in responding to Covid-19 has ensured Persimmon is in robust health, and fully able to play its part in delivering the new homes the country needs to support the UK's recovery, in a range of future economic scenarios," said Chief Executive Dave Jenkinson.
However, the company noted that, as expected, from week 12, the impact of the Covid-19 pandemic, and the government's social distancing measures, resulted in delays to its build programmes and legal completions.
By Evelina Grecenko; [email protected]
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