Housebuilder Persimmon posts bumper results


Persimmon has reported a 34pc jump in pre-tax profits for 2015, calling its latest set of results “outstanding”.

The housebuilder’s final results for the year to the end of December showed sales rose 13pc to £2.9bn, from £2.6bn in 2014.

The average selling price of its homes increase 4.5pc to £199,127, while the number of homes it sold rose 8pc to 14,572 . It also acquired a further 20,501 plots of land.

Since 2012, the number of homes that Persimmon has sold each year has increased by almost 50pc.

• Londoners need a 266pc pay rise to buy a house

The FTSE 100-listed housebuilder also announced that it would pay out more cash to shareholders following the bumper result.

It now plans to pay investors 110p a share on April 1, significantly higher than the provisionally planned payment of 10p per share.

The additional windfall means investors are now on track to get a cash return of £2.76bn, or £9 a share, by 2021, a 45pc increase from the original plan of £1.9bn, or £6.20 a share, set out in 2012.

Shares jumped 5.1pc in early trading.

New houses stand on a unfinished housing estate on January 16, 2009 in Gloucester, EnglandShares jumped in early trading due to Persimmon's bumper results Photo: Getty Images

Nicholas Wrigley, group chairman, said: “Persimmon delivered an outstanding performance in 2015, supported by improving customer sentiment and a mortgage market which is responding to customer demand.

“Customer activity in the early weeks of the 2016 spring season has been encouraging and today's further £860m enhancement to the capital return plan to a total of £9.00 per share is a measure of the board's confidence in the group's future progress.”

The group attributed its success to a “confident housing market” in the UK, buoyed by stronger employment levels and an improvement in disposable household incomes.

Mortgage approvals were consistent over the year at around 70,000 per month, and were 18pc ahead of 2014 by the end of the year.

The company also pointed to the government’s Help to Buy scheme, which assists first time buyers in getting on the property ladder, for supporting the mortgage market.

Persimmon said there are two challenges for the industry: opening new sites as swiftly as possible and finding skilled labour. It called for improvements to be made to the planning system to allow it to build homes more quickly.

Bank of America Merrill Lynch reiterated its 'buy' rating for Persimmon, adding that it "traded well in 2015 and into 2016 and despite strong land investment, it ended last year with a much better net cash position than at the start."

Robin Hardy at Shore Capital repeated its 'hold' rating, and said: "This news on the dividend was largely expected but that it has happened is likely to create a positive response and after a very weak performance yesterday we could see a near term bounce. Macro issues, especially the Brexit, are likely to remain more significant for the stock and sector in the near term, however."

Yesterday, housebuilder Bovis reported record profits for the year.