Saturday, May 28, 2022
UK

Housebuilder Persimmon boosted by property demand

property demand

Private average sales were up 2% year-on-year, while trading remained in line with management forecasts, it said

Housebuilder Persimmon has hailed another strong performance as the ongoing UK property boom continues.

Private average sales were up 2% year-on-year, while trading remained in line with management forecasts, it said.

The London-listed group now expects to deliver growth of between 4% and 7% on 2021 levels this year as demand for its homes remains strong. Build completions are also expected to accelerate during the second half.

Forward sales and cash held of £2.8bn ($3.51bn) and £446m ($559.73m) respectively offered reassurance for investors, while the average selling price is up 5.5% to £266,000 ($333,831.33) compared to £252,000 ($316,261.26) last year.

As expected, reflecting the profile of outlet openings, we anticipate that completions this year will be weighted towards the second half, with first half completions being lower than those delivered in the first half of 2021, Dean Finch, chief executive, said.

We continue to believe the £75m ($94.13m) provision we have already set aside (for cladding removal and fire safety) remains appropriate, Finch said.

A year ago, Persimmon made a pledge that leaseholders in any multi-storey building it had constructed would not have to pay to remove any cladding or correct fire related safety issues, in the wake of Grenfell Tower.

In addition to the scheduled dividend of 125p made in April, a further payment of 110p is set to be returned on 8 July 2022.

Shares fell 1.3% following the announcement.

This latest trading update from the housebuilding sector continues to defy investor worries about a tougher backdrop, Keith Bowman, investment analyst at Interactive Investor said.

He said: Rising UK interest rates to battle an inflation surge and a cost-of-living crisis for consumers are a concern.

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