Housebuilder Persimmon brushes off market slowdown concerns to post a 13 per cent profit boost
Housebuilder Persimmon has reported a 13 per cent jump in profits after good trading through the typically quiet summer months.
The company recorded pre-tax profits of £516.3 million for the six months to the end of June, up from £457.4 million a year earlier.
The news suggests that the housebuilder has shrugged off concerns that the housing market is slowing down this year.
Construction site: Persimmon had pre-tax profits of £516.3 million for the first half of the year
Overall group revenues lifted by 5 per cent to £1.84 billion in the first half of the year. Housesales were up by volume to 8,072. A rise of 3.6 per cent.
Chief executive Jeff Fairburn pointed to wider economic trends such as high employment and relatively low interest rates as for reasons for the success.
He said: ‘We have continued to experience good levels of customer interest in our housing development sites as we trade through the quieter summer season.’
‘Customers are continuing to benefit from a competitive mortgage market and confidence remains resilient based on healthy employment trends and low interest rates.’
Big earner: Mr Fairburn earns around 3,000 times more than Persimmon’s lowest paid workers
Mr Fairburn continues to be criticised over the size of his pay packet.
In April, 48.5 per cent of investors vote against the plans to increase pay for top bosses with many venting anger of a £75 million payout for Mr Fairburn.
With a salary of £47 million, Mr Fairburn earns around 3,000 times more than Persimmon’s lowest paid workers.
Richard Hunter, Head of Markets at interactive investor, commented: ‘Persimmon is certainly fixing the roof while the sun is shining, as it reported a sparkling set of figures driven by a number of beneficial factors.
‘The government’s Help to Buy scheme remains a tailwind, as does the historically low interest rate environment and few problems surrounding mortgage availability. This has propelled an impressive set of metrics, with earnings per share up 13 per cent, return on capital growing by 14 per cent and gross margin ticking north of 30 per cent, all part of a positive package which has seen pre-tax profit jump 13 per cent.’
‘Meanwhile, there is a high quality land bank in reserve, outlook comments are positive and the strength of Persimmon’s cash generation has enabled the continuation of a generous return to shareholders, where a prospective dividend yield of 9.6 per cent is eye-watering,’ Hunter added.