Persimmon share price up as housing market demand boosts profits
Persimmon became the latest housebuilder to announce another leap in profits yesterday as rosier housing market conditions helped lift sales rates and prices in the first half of the year.
Britains’s largest housebuilder completed 6,408 property sales in the six months to 30 June, up 28 per cent on last year. The average selling price was 4.3 per cent higher at £186,970.
The group said weekly private sales were 17 per cent ahead of last year as it benefitted from the Government’s Help to Buy shared equity scheme.
The strong performance helped lift revenues by 33 per cent to £1.2bn and increase underlying pre-tax profit by 57 per cent to £212.9m.
Persimmon has been snapping up more land to meet increased demand, securing 14,251 plots in the period. It has a consented land bank of 82,250 plots.
Chief executive Jeff Fairburn, said: “Persimmon has produced another strong performance in the first half of 2014, taking advantage of the current market opportunities to deliver growth whilst strengthening the financial position of the business.”
The value of Persimmon’s forward sales are 22 per cent ahead of last year at £1.53bn. Fairburn said that despite the traditionally slower summer trading period, its private sale reservation rate was running nine per cent ahead of the same period last year.
Shares in Persimmon are up 15.6 per cent over the last 12 months compared to a 4.8 per cent rise for the wider FTSE 100. The company closed up 1.12 per cent last night to 1,350p.