18th Aug 2020 08:16
(Alliance News) - FTSE 100 housebuilder Persimmon PLC on Tuesday cut its interim dividend sharply, as its performance was significantly hurt by the Covid-19 pandemic and the lockdown measures implemented as a result.
Nonetheless, it reported a strong start to the second half of 2020.
Shares in Persimmon were up 3.3% at 2,700.00 pence on Tuesday morning in London.
For the six months to the end of June, pretax profit dropped by 43% to GBP292.4 million from GBP509.3 million the year before, as revenue declined by 32% to GBP1.19 billion from GBP1.75 billion.
This was due to completions falling by 35% year-on-year to 4,900 homes from 7,584 the year before, even as the average selling price increased to GBP225,066 from GBP216,942.
The group said its owned and consented land bank as at June 30 fell to 89,232 plots from 95,086 plots the prior year, however its forward sales position increased to GBP2.48 billion from GBP2.05 billion.
Persimmon declared a "modest" interim dividend of 40 pence per share, down 80% from 235p the prior year.
Looking ahead, Persimmon's board will consider whether it will make a further payout at the end of the current financial year to satisfy the final dividend for 2019, which was postponed.
In addition, the group said its short term outlook is robust, and expects to deliver 45% of its anticipated new home legal completions for the second half.
However, beyond that Persimmon said it was difficult to assess the outlook, due to uncertainty over how Covid-19 will continue to affect the economy, fears of a potential second value, and trade negotiations between the UK and the EU.
"The group has had an excellent start to the second half with a 49% year-on-year increase in average weekly private sales rates per site since the start of July and a current forward order book of GBP2.5 billion, a 21% increase on last year. Our strong opening work in progress position and excellent build rate through the summer give us confidence in a positive second half outturn. We expect that by the end of September, we will have delivered 45% of our anticipated second half new home legal completions," said Chief Executive Dave Jenkinson.
"As a result of the continuing strong performance of the business through this challenging period, together with our cautious optimism on the group's prospects for the second half, we are pleased to announce that the board is proposing a modest interim dividend of 40p per share," Jenkinson added.
By Dayo Laniyan; [email protected]
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