Persimmon revenues drop 10%

Housebuilder Persimmon this morning reported half year results showing revenues falling back by almost 10% while maintaining steady profits.

The firm reported gross profits of £97.4m, marginally up on the £95.6m reported in 2010.

Real-time Share PricePre tax profits were £58.1m before exceptional items, up 54% on the first six months of last year. However, after including the effect of last year’s £63.6m write-back in land value, the pre-tax profits were actually down 40%.

What the firm described as “underlying profit” was also up 52%.

The company sold 5% less homes, 4,439, at an average price of £162,647, also lower than last year. However, sales are currently running 4% ahead of last year’s summer level, and it said its order book is 10% above the level at the same time last year. Group chairman Nicholas Wrigley also said that while mortgage lending remained constrained, it had seen “some improvement in higher loan to value lending.”

However it admitted that 24% of the homes sold in the first six months of the year required Persimmon to keep an equity stake in them. Wrigley said he expected “the overall growth in new home sales volumes to reflect the developments in the wider economy.”

He added: “We remain committed to our strategic objectives of margin improvement and cash generation.  As a consequence our teams across the country remain focussed on the basics of house building in their local markets which I am confident will deliver future success for the Group.”