Persimmon makes progress despite Budget uncertainty
London-listed housebuilder Persimmon has made steady progress this year, despite a variety of macroeconomic headwinds.
Forward sales have risen 15 per cent since July 1 to £2.79bn, with three-quarters of forward sales being private.
Just over four-fifths of Persimmon’s expected private house deliveries have already been exchanged or completed, it said.
“Progress has been achieved despite some softening in the market since the summer, with consumer confidence affected by ongoing uncertainties including the upcoming government budget,” the FTSE250 builder said.
Confidence has been particularly weak in the upper end of the market, which may be hit by a so-called ‘mansion tax’ at the end of November.
However, the wider market has also been affected by general uncertainty and a public drop in confidence as it becomes clear that Chancellor Rachel Reeves will likely have to resort to manifesto-breaking policies in her budget.
Resilience drives results
Persimmon’s land bank increased by three per cent to 83,800 plots as of September 30, while its sales rate rose to 0.76 net private sales per outlet per week.
The private average selling price in the forward order book was £295,150 in November, up from £291,514 in June, representing a 1.5 per cent increase from the position at the same point last year.
Oli Creasey, head of property research at Quilter Cheviot, said that Persimmon has been “making steady progress… despite headwinds”.
“Management… appears positive that the outlook for the business remains relatively strong, and performance compares well against peers such as Taylor Wimpey, who yesterday announced an 11 per cent fall in its sales rate.
“The difference in sales rates may be partly due to differing geographic biases…. but also reflects the management decisions made at Persimmon, such as the vertical integration of material supply”, and the recently announced “Rezide” shared equity product,” Creasey said.