Persimmon lifts profit expectations on robust UK housing market

Housebuilder Persimmon has hiked full-year profit expectations thanks to increased production of homes and a robust housing market in the UK.

The Charles Church owner said it is also mindful of “market cycle risks and wider economic uncertainties”, including those related to Britain’s departure from the European Union, and it has therefore taken a selective approach when acquiring new land plots.

The group said “while the future performance of the UK economy is currently subject to increased levels of uncertainty”, it is well positioned thanks to its network of selling outlets, range of house types at affordable prices, land bank and conservative financial structure.

The FTSE 100-listed company also said it expects pre-tax profits for 2018 will be “modestly” ahead of market consensus after it opened over 1,000 new selling outlets and delivered more than 97,000 new homes to the market, increasing yearly production by 75%.

Persimmon said the British housing sector last year gained from robust employment levels, low interest rates and a competitive mortgage market that all supported consumer confidence and demand.

For 2018, group revenue increased 4% to £3.74 billion, with new housing revenue increasing by 4% to £3.55 billion.

Total completions rose by 406 new homes to 16,449, a 3% increase on the year earlier, with the average selling price up by 1% to £215,560.

For the current year, Persimmons’s forward sales are ahead 3% to £1.40 billion.

Persimmon recently came under fire by politicians and shareholders over a £75 million pay packet for its former boss Jeff Fairburn, who left the company at the end of last year.