Tuesday, August 25, 2009

Persimmon bullish despite profits slump

Persimmon believes the housing market is stabilising despite pre-tax profits slumping to ВЈ9.8m for the six months to June 30 from ВЈ36.9m last year.

Total sales were also down to ВЈ612m from ВЈ998m but recent indications from site show prices have stopped falling and buyers are coming back.

The group said: "Sales in the historically quieter summer weeks have held up well and are ahead of our expectations. In recent weeks visitor levels have exceeded those of last year whilst cancellation rates have been significantly lower."

Forward sales since July 1 are forecast to hit ВЈ910m compared to ВЈ836m last year with an average selling price for homes reserved since July of ВЈ174,000 - up from ВЈ163,650 over the same period in 2008.


Persimmon bullish despite profits slump


Cost cuts at the group are expected to save ВЈ50m per year but the firm added "we expect that margin recovery to more normal levels will take some more time to achieve."

John White, Group Chairman said: "We expect sales rates to remain resilient due to the successful destocking that has occurred in the industry combined with the continuing good levels of underlying demand for new homes in the UK.

"Recently, selling prices have stabilised in most parts of mainland UK. Future volume increases and price movements will be dependent upon mortgage availability, job prospects and the health of the general economy.

"Our strong balance sheet, reduced debt, long landbank and strategic land opportunities, combined with an experienced management team provides an excellent platform to create value for shareholders."

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