Persimmon profit up ten-fold on increased sales

Housebuilder Persimmon has increased its half-year profits ten-fold on last year to £101.4m, the firm said today.

Reporting results for the six months ending June 30 above expectations, the housebuilder said it had achieved sales of £777m, an increase of 27% on the previous year.

It said the market had slowed in recent weeks “as expected”, although put this down to the “normally quieter summer period” rather than a post-election dip. It said it was still on target to achieve its aim of a 10% increase in sales revenue for the year. 95% of this year’s planned sales have already been made, it said.

The profits included a £63m write-back in land value as the market had improved. It added it had a further £288m of potential increases in land value that it may choose to write into its accounts at a future date, dependent on the market. It said it had bought 4,263 plots in the six months, taking its land bank to 58,957.

The statement said the Comprehensive Spending Review in October will create greater certainty which “may help to improve sentiment further” within the UK housing market. It said: “We expect annual volume growth of new home sales to continue to be steady in line with any general improvement in the economy.”

John White, group chairman, said: “Overall, whilst we currently remain cautious, we are optimistic about the future of our business. We have a strong balance sheet, excellent cash generation, national coverage and an experienced management team.”