Persimmon says forward sales 11% ahead of 2019 levels By Investing.com

By Samuel Indyk

Investing.com – Homebuilder Persimmon has announced a strong start to the year, with the group’s forward sales position of around £3.0bln 11% ahead of the same period in 2019 and 23% ahead of last year.

The average selling price has also edged higher to around £252,000 from £244,500 last year.

“Our build rates continue at pre-Covid levels and we remain on track to deliver first half volumes approaching those of the first half of 2019,” said Persimmon (LON:PSN) CEO Dean Finch. “We are progressing our land holdings and taking advantage of good quality investment opportunities, bringing 6,000 plots across 29 locations into the business in the period and securing a strong pipeline for the future.”

The FTSE 100 homebuilder has also reiterated its intention to pay two interim dividends of 55p each in August and December this year.

Outlook

Persimmon said they continue to experience good demand for newly built homes across the UK and is focusing on advancing build programmes to improve the availability of homes for sale.

The homebuilder said they remain particularly well placed to manage market conditions as they develop.

The company could well be primed to beat full year expectations, according to Hargreaves Lansdown HL Select fund manager Steve Clayton.

“Persimmon’s current run-rate of sales suggests the full-year outlook could be significantly better than previous expectations,” Clayton said. “The market was expecting the group to match 2019’s outcome this year, but rather than simply recovering, the group looks to have moved straight onto outright growth, if it can maintain momentum in the business.”

However, there is also a sense of caution, as some of the government schemes to support the housing market are due to end in the coming months.

“Stamp Duty is coming back, and can Persimmon actually maintain production at the levels currently demanded?” Clayton asked.

“Adding 6,000 new land plots in the quarter is a good start here, but buying land is not the same as building on it. The group are taking a cautious approach, suggesting that build rates will only match the 2019 level for the rest of the year, so analysts will be wary of pushing forecasts too far forwards at this stage.”

At 09:10BST, shares in Persimmon were trading higher by 2.6% at 3,229p per share.