Persimmon chief says market is stabilizing

Persimmon, the UK’s largest house builder by market value, has posted a fall in turnover and housing completions for the first half of the year but insisted the market is stabilizing.

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The company revealed it completed 4,439 homes in the six months to end June, down almost 5% on the 4,657 for the same period last year.

Turnover fell in the period to £715m, from £785m a year ago.

Operating profit margin was up slightly at 9%, against 8% a year earlier. Chief executive Mike Farley said he expected margins to reach typical industry levels of profitability about 15% in a “couple of years”.

Persimmon said sales had improved since the start of the year, and it expected to complete the same number of houses by the end of the year as it did in 2010.

Farley said: “Conditions in the mortgage market are constrained, but we are seeing gradual improvements.”

He added that the industry is in talks with the  Council of Mortgage Lenders about creating a 95% loan-to- value product to help ease the current constraints on the market.

Shares were down around 1% in early trading, but remain up around 17% on the year.