Persimmon lifts first half profits

Tony Cross, market analyst with Trustnet Direct, said: “As we saw with Bovis yesterday, there’s a degree of scepticism emerging as to just when the party will come to an end for the sector and although it’s not looking imminent, there’s a growing feeling best of the upside may now be fully priced in”.

Pre-tax profits rose 31pc in the six months to June 30 to £272.8m, compared with £208.9m in the same period last year, the company said on Tuesday. “Our private sale reservation rate since 1 July is now 5 per cent ahead of the same period last year which is a reflection of the continuation of healthy customer demand”.

Legal completions grew 7 percent to 6,855 new homes sold, while average selling price rose 4 percent to 194,378 pounds.

The group said it remains focussed in executing the objectives which underpin its ten year strategic plan, launched in early 2012, and that customer activity remained healthy throughout the first half of the year. Homes sold under the premium Charles Church brand reduced as the group focused on a fewer number of sites.

The company also said current forward sales were 12% ahead of the same period last year at more than £1.7bn. “The group continues to take advantage of the current market opportunities to deliver sustainable growth whilst also utilising its excellent cash generation to build a strong asset platform for the future”, he added.

Regional housebuilder Persimmon Plc has expanded its North East presence through the opening of a new office on Teesside.

Numis’ Chris Millington was generally very positive on the results, but the broker downgrade its rating on Persimmon to Reduce from Hold, despite a hike to its target price, and said that while Persimmon offers attractive income and returns, superior value expects elsewhere in the sector.

He added: “We believe that the combination of appropriate lending regulation, a measured approach to the assessment of customer credit worthiness and the pursuit of balanced oversight measures by the Bank of England will support the sustainability of the housing market over the longer term”.

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