Persimmon hands £750m to shareholders so far this year
Persimmon, one of the UK’s largest housebuilders, has handed £750m to shareholders since the beginning of this year as the country’s housing market booms.
The average selling price of a home has grown by a little under £10,000 over the past 12-months.
“House prices have proved remarkably robust since the pandemic began, buoyed by pent-up savings and cheap mortgages. Persimmon has gushed cash in this environment and is returning record amounts of it to shareholders… But make no mistake – the biggest reason for Persimmon’s success is high house prices, and the general strength of the housing market,” Charlie Huggins, head of equities at investment firm Wealth Club, said today.
“That is something over which it has no control, and it could be about to change.”
Persimmon’s profit before tax in the six months to 30 June has fallen behind the same period last year. The figures dropped from £480.1m in 2021 to £439.7m this year, as inflation eats into earnings.
Housing completions have also slowed in comparison with the first six months of last year. Inflation has gripped the cost of raw materials and labour, and supply chain disruptions knock the wider construction industry.
Housing analyst as property site Twindig and former analyst at brokerage Jefferies, Anthony Codling added: “In a world of rising prices, Persimmon is working hard to keep all stakeholders happy.
“For homebuyers – the average sales price of its homes at £245,597 are around 20 per cent lower than average UK house prices, and customer satisfaction levels are high. For investors – Profit margins are robust, the forward orderbook is up, and cash is being returned to shareholders
“This is not one last hurrah before the housing market turns.”