- Persimmon plc (LON:PSN), one of the UK’s leading housebuilding operators has released a trading update, for the year to Dec 31.
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- The company say that margins have been maintained, land purchases stepped up in the face of strong consumer demand and that selling prices edged up by a low single-digit pace over the year.
- The company has maintained pre-pandemic build rates in recent quarters, despite Omicron challenges to labour availability.
- The shares dipped by 2% in early trading.
Persimmon's Moving Parts
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“With approaching 300 sites in operation, Persimmon have a lot of moving parts. Some analysts expected turnover to be a shade higher, but then again, the big jump in forward bookings, up from £1.32bn to £1.62bn suggests that demand is fine and most likely, some completions slipped over the year end as Omicron raced through workforces up and down the country.
Having stepped up land purchases, Persimmon should be able to capitalise on demand, so long as they can get the planning system to work for them. With sales rates up 20% in the second half the company is well positioned for the new year.
Persimmon had already taken steps to rectify cladding issues for the small number of tall buildings they constructed, and were expecting to pay the previously announced industry levy. Unsurprisingly they remain tight-lipped about the recent proposals for further measures by Government, whilst these remain under negotiation.
With significant manufacturing capacity of their own, Persimmon are better insulated from cost price inflation than peers and this shows in their confidence about maintaining margins at high levels. Cash generation is solid and the group looks well placed to continue to pay attractive levels of dividends to shareholders. Last year the group paid out 225p per share. We’ll get more visibility on what the group might be able to return to investors in early March when the group offer an assessment of the market outlook to accompany their full year results.”
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