Persimmon delivers more dividend cheer after strong summer sales

Housebuilding giant Persimmon has said it is “well prepared” for the latest lockdown as it announced its second dividend payout thanks to resilient demand for new homes.

The Charles Church builder said it saw a strong performance in the third quarter, with average weekly sales rates up 38% on 2019, and is set for a “good” result for the year.

Persimmon said it is fully sold up for the current year and has around £1.36 billion of forward sales reserved beyond 2020 – up 43% on a year earlier.

Housebuilders have been enjoying a property boom since the spring lockdown, with demand and prices boosted by the Stamp Duty holiday and the ongoing government Help to Buy initiative.

It said its market share has started easing back to “more normal levels” in recent weeks as activity has recovered across the wider housebuilding industry since the spring lockdown.

But it said it expects completed sales in the second half to be at least in line with a year earlier.

The group confirmed its building sites and sales offices are continuing to operate throughout the second lockdown, though it added a note of caution amid potential further measures to control the pandemic and economic uncertainty.

It declared another interim divi payout to investors of 70p a share, on top of the 40p a share paid out in September.

Together, the payouts replace the 110p a share final divi for 2019 that was postponed at the beginning of the crisis.

Persimmon’s recently appointed chief executive Dean Finch, who took on the role at the end of September, said: “Persimmon continues to perform robustly despite the significant challenges presented by the Covid-19 pandemic and we are currently on course to deliver a good result for 2020.”

The group added: “We are well prepared for this second lockdown and continue to work with our subcontractors and supply chain to maintain the group’s operations.

“We remain mindful, however, of the potential for further disruption from additional Government-mandated measures to control the pandemic and the impact of ongoing uncertainty on the UK economy.”

Shares fell 6% despite the divi cheer and bullish outlook.

Julie Palmer, partner at Begbies Traynor, said: “Help to Buy and the end to the stamp duty exemption are just over the horizon and because of this the latest news from Persimmon will be tinged with an element of wariness.

“In these turbulent times when lockdowns strangle the spending of consumers, and lenders exercise greater caution, Persimmon and all of those in the house building sector may want to see continued help from central Government.”