Persimmon profits jump as boom in house demand drives ‘robust’ trading

Housebuilder Persimmon has hailed a “robust” performance over the first half of the year as profits were buoyed by a surge in activity in the housing market.

The FTSE 100 firm revealed that pre-tax profits increased by 64% to £480.1 million for the six months to June 30.

It added that its average private sales rate was around 30% higher than the same period a year earlier, when trading had been impacted from site shutdowns during the pandemic.

Persimmon said it expects to achieve roughly 10% growth in sale completions for the whole of 2021.

The company said it expects the fundamentals of the UK housing market to remain positive amid “improving consumer confidence, low interest rates, and mortgage lenders that are keen to support customers to buy a home of their own”.

It said that around 50% of agreements with owner-occupiers were with first time buyers, many of whom have been boosted by increased savings during the pandemic.

Persimmon also hailed forward sales for around 6,500 homes to private homeowners, at an average selling price of approximately £253,000.

However, the housebuilder said it has “experienced increased cost inflation related to certain components of our supply chain”.

Dean Finch, group chief executive of Persimmon, said: “We’re managing the balance of inflationary pressures well and currently anticipate that our industry leading returns will remain resilient.”

He said he was pleased with the momentum of the business following the pandemic, adding: “Persimmon’s first half performance has been robust.

“In particular, I am pleased we have delivered strong growth in legal completions whilst also achieving higher levels of build quality and customer satisfaction.

“We made good progress in the land market in the period, bringing over 10,000 plots of high quality land into the business, achieving good visibility of new outlet openings and providing momentum for our future growth.”