Finance boss insists housebuilder will grow organically, despite rumours that it is planning an acquisition

Housebuilder Persimmon said it had no need to acquire a competitor after it posted stronger than expected half-year results this week.

The group, which is close to entering the FTSE 100, was this week linked to the acquisition of a number rivals, including Westbury, Bovis and Redrow.

Mike Killoran, finance director at Persimmon, did not rule out acquisitions but stressed that the firm was concentrating on organic growth. The housebuilder’s pre-tax profit jumped 45% to £220m, £15m more than the market was expecting. Turnover for the six months to June grew 21% to £1bn.

Killoran said: “We don’t need to do a deal to bring growth to Persimmon. We are proving we can grow without the need to acquire. One or two in the market were feeling we needed to after the Beazer deal [in 2001], but I think that has gone.

“Our track record suggests we would be looking at something, but we like to be able to control our own destiny. The organic growth opportunities are very exciting. We have great management across the country and feel very well set to grow organically, without having to pursue the more opportunistic end of acquisitions.”

Killoran said the firm was concentrating on keeping its houses affordable in the current market, which he said had suffered a slowdown in the wake of successive interest rate rises.

We do not need to do a deal to bring growth to Persimmon

Mike Killoran, finance director

He said: “I think we have hit price resistance around the country. That’s why it’s critical to remain affordable if price growth slows down in the second half.”

Persimmon’s average selling price was £150,000 in the north of England and £175,000 in the south. The firm completed 6058 houses in the six-month period and boosted its landbank by 4000 plots to 60,287.

Killoran said he expected the firm’s upmarket Charles Church brand to expand further this year. Charles Church opened a Yorkshire office at the start of the year and another in Cheshire last month.

Killoran added that he hoped the division would complete about 1200 units this year, compared with 1000 in 2003.

He added that Persimmon was conscious of not positioning the arm at the top end of the luxury housing market – the brand’s average selling price was £250,000 for the first half.