Persimmon sees an end to housing blues

HOUSEBUILDER Persimmon yesterday buoyed the battered property sector as it claimed the worst of the housing crisis is over, reporting a surge in volume and revenues over recent months.

Persimmon said it had completed 4,006 homes over the six months to end of June, with total sales revenue of around £625m, 37 per cent lower than the first half of 2008. But the firm said that sales volumes since April 2009 had consistently been ahead of the same period last year, and that both volume and revenues have recently been showing “increasing improvement” on last year.

Persimmon has already secured £700m of forward sales revenue into the second half of 2009, compared to £458m at the beginning of January and £650m in June 2008.

The group also said its current level of cancellations is at a historic low of 16 per cent, signalling a marked improvement in the market.

“We expect this improving trend to continue against the weak conditions experienced throughout the second half of 2008,” Persimmon said in a statement, adding that it does not anticipate having to make any more land writedowns.

The group said that though house prices have continued to fall over the period, the rate of the decline has reduced significantly.

“Our recent experience is that prices are now stabilising in some locations,” it said.

The group said its debt at the end of June was lower than predicted at £495m, placing it well on track to deliver its full-year target of £450m.

Persimmon said it had invested in areas where it anticipates good sales and cash flow, having opened 45 new developments over the first half. It plans to commence work on a further 50 sites before the end of the year.