18th Aug 2021 08:58
(Alliance News) - Housebuilder Persimmon PLC on Wednesday said profit remained below pre-pandemic levels in the first half of 2021 despite a sharp rise in revenue.
Revenue jumped to GBP1.84 billion, up 55% from GBP1.19 billion a year prior and up 4.9% from the GBP1.75 billion reported in the first six months of 2019, before the pandemic.
Profit rose sharply, but remained below its pre-Covid level. The company noted pretax profit of GBP480.1 million in the first half, up 64% year-on-year from GBP292.4 million but down 5.7% from GBP509.3 million in the first half of 2019.
Shares were trading down 1.8% at 2,817.00 pence each in London on Wednesday morning.
Higher revenue was offset by the GBP1.30 billion cost of sales in the first half, 8.5% above the GBP1.20 billion reported two years prior.
Similarly, operating expenses were GBP66.2 million in the first half, up 22% from the GBP54.6 million reported in period during 2019.
New home completions rose 51% to 7,406 in the first half from 4,900 the year before, Persimmon said. However, completions remained 2.3% below the same period in 2019, when the company reported 7,584 homes finished.
In the first six months of 2021, the company purchased 10,272 plots across 48 locations to supply its development pipeline.
FTSE 100-listed Persimmon said it has now distributed a total payout of 235p for 2020, with 125p issued in March and 110p in August.
This is consistent with the dividends paid during 2019, and up sharply from the 110p paid in 2020.
For the second half, the company noted forward sales of GBP2.23 billion, up 9% from the same point in 2019. These forward sales include 6,500 homes with an average selling price of around GBP253,000, the housebuilder said.
In 2021, Persimmon said it expects sales completion to be 10% higher year-on-year from 13,575 legal completions in 2020.
"The fundamentals of the housing market continue to remain positive with improving consumer confidence, low interest rates, and mortgage lenders that are keen to support customers to buy a home of their own. We expect a more normal seasonal trading pattern to reassert itself through this year compared with 2020, which was disrupted significantly by the pandemic," said Chief Executive Dean Finch.
"Persimmon's performance over the last eighteen months has demonstrated that successful execution of its strategy provides the business with the flexibility and resilience needed to manage not only the cyclical nature of the housing market but events that create similar market disruption...The business remains well set to continue to generate superior and sustainable returns for the benefit of all its stakeholders," Finch added.
By Scarlett Butler; [email protected]
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