British homebuilder Persimmon Plc (PSN.L) reported Tuesday a growth in revenues for the first half, reflecting increase in home completion and prices. In its trading update, the company said it expects first-half underlying operating margins to increase to more than 11.5 percent from prior year's 9 percent. Looking ahead, the company cautioned that sentiment within the UK housing market continues to be impacted by the continued weakness in the wider UK economy.
Looking ahead, the company said, "However, we remain confident that we will be able to operate successfully in the current market and achieve our strategic objectives."
The company noted that market conditions have been relatively stable during the first half of the year.
According to Persimmon, the first-half performance represents an excellent start in the delivery of new long-term strategic plan to develop it into a stronger, larger business, backed by a significant and high quality landbank.
First-half turnover of nearly 805 million pounds, up by around 13 percent from last year. Cancellation rates remained at low levels in line with the prior year at about 18 percent. Weekly average private sales rate per site for the first half grew about 18 percent.
The company has legally completed 4,712 new homes in the first six months, a 6 percent growth on the previous year.
Average selling price grew 7 percent to about 171,400 pounds, reflecting a greater proportion of traditional family homes in the sales mix. Pricing has remained firm during the first half.
During the period, the company opened 65 new sites and currently is selling new homes from about 375 sites.
Visitor numbers to both the Persimmon Homes and Charles Church home finder web sites grew over 50 percent, reflecting customers' growing preference to search for a new home using the internet.
As of June 30, the value of total forward sales were about 774 million pounds, 7 percent ahead of the prior year. The company noted that it has experienced the normal seasonal slow down in private sales reservations from around the time of the Jubilee weekend as it moves into the quieter summer weeks.
Persimmon said it will return 1.9 billion pounds or 6.20 pounds per share of capital to shareholders over the next nine years, with the first capital payment of 227 million pounds anticipated in June 2013.
The company is slated to release its first-half results on August 21.
During the second half of the year, the company expects to open a further about 60 new sites.
Persimmon added that it remains focussed on maintaining the current strength of site network to improve capital efficiency and returns - in line with long term strategy.
In London, Persimmon shares are currently trading at 629.50 pence, down 5.50 pence or 0.87 percent.
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by RTT Staff Writer
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