Persimmon reports 'strong' forward sales and lower debts

Persimmon has told the stock market its financial position is “strong”, off the back of a more stable housing market, but warned a further rise in unemployment remained a concern.

In an interim management statement for the period from 1 July to 16 November, the firm said trading levels had continued ahead of last year since and it expects to have legally completed around 9000 homes in the year to 31 December.

It said the encouraging summer sales rates had been maintained through the autumn, prices had held firm and forward sales were up on last year. It said it was fully sold up for 2009 and had a further £500m of sales on the books for next year.

The firm added that it was working to reduce debt and expected borrowings at the year end to be “significantly lower” than the £400m guidance given at the half year results.

However, it said further UK job losses could harm the housing market and it still had “significant concerns” about the availability of mortgages, particularly the higher loan to value products required by first time buyers.

The statement said: “Whilst we remain concerned about the potential impact on our markets of any significant increase in unemployment over the coming months, debt is reducing well ahead of our previous guidance, sales volumes have stabilised and pricing conditions are currently more positive.

“Having strengthened our forward order book and reduced borrowings significantly, the group's financial position remains strong.”