Sales rise for housebuilder Persimmon

Jul 6 2010 by Graeme Brown, Birmingham Post

Housebuilder Persimmon has revealed a 26 per cent rise in half-year turnover despite a slowdown in sales prior to George Osborne’s austerity Budget.

The group said legal completions for the six months to June 30 increased by more than 16 per cent to 4,657 homes, with average selling prices up eight per cent at £168,500 and turnover ahead by around a quarter to £785 million.

Whilst sales prices and margins increased on the start of the year, Persimmon said the normal seasonal slowdown in reservations since the start of May was exacerbated by uncertainty ahead of the Government’s emergency Budget.

Since then, Persimmon said sales have been in line with its expectations.

It added: “Whilst we remain cautious, we have a strong platform for profit growth as and when the housing market improves further.”

Persimmon said cancellations remain at low levels in line with a year earlier at around 16 per cent. Total sales including legal completions and forward reservations are around £1.5 billion, up from £1.3 billion a year earlier.

Having entered the sector’s peak period for borrowing, Persimmon said its debt had fallen to £122 million from £494 million a year earlier and from £267 million at the start of the year.

It is expected that this could fall to below £100 million by the end of the year.

Dominic Harman managing director for Wolverhampton-based Persimmon Homes West Midlands, said: “We continue to see the new homes market improve, and compared to this time last year, we have achieved legal completions ahead by as much as 16 per cent at our developments at Abode, Birmingham, Mitchells Brook in Sandwell and the Keep in Darlaston.

“Visitors to our developments have remained stable and in line with our expectations and we are pleased to report the on-going strength of growing confidence in our consumer decision making, with cancellation rates still lower than the industry average for this time of year.”