Persimmon hikes margins over 30%

Profits and margins jumped at the country’s third biggest housebuilder as York-based Persimmon said the number of homes it built in the first half was up.

The firm, which is behind a plan to build new apartments and homes at King Edwin Park in Harrogate (pictured), said pre-tax profit rose 13% to £516m on turnover up 5% to £1.84bn.

Margins in the six months to June were up from 28.9% in the first half of 2017 to 30.8% which the firm said “reflects the continuation of our disciplined processes of investing in high quality land, making a start on new sites as promptly as possible and supporting growth in our construction activities whilst exercising strong control over our costs”.

The firm added that it was facing cost and availability issues with some materials while having enough skilled workers to carry out work was “tight”.

But it added: “The group continues to take steps to better support its build programmes and is managing to contain the inflationary pressures in the supply chain well.”

Alasdair Ronald, senior investment manager at analyst Brewin Dolphin, said: “Margins are being helped by the increasing use of materials that are produced by group subsidiaries (bricks and timber-frame units) and Persimmon is also looking to employ its workforce directly, rather than using subcontracted labour.”

The number of homes it completed was up 278 homes to 8,072 with its average selling price edging up 1% to £215,813.