Persimmon PLC on Wednesday backed annual volume growth and said it would maintain ‘industry-leading margins,’ despite the housebuilding sector facing cost pressures and a UK consumer confidence hit.
The company also announced a surplus capital return and cautioned first-half completions will slow a touch year-on-year, before a decent second half of 2022.
Shares in Persimmon were 1.2% lower at 2,155.00 pence each in London on Wednesday morning.
Ahead of the company’s annual general meeting on Wednesday, Chief Executive Dean Finch said Persimmon is trading in line with expectations so far in 2022.
Its private average sales rate is 2% higher year-on-year so far in 2022. Back in March, when reporting results for 2021, Persimmon said its sales rate at the start of the year was also 2%.
The York, England-based firm’s order book stands at £2.8 billion, down a touch from £3.0 billion a year earlier.
The average selling price for homes sold to private owner occupiers in its forward order book is £266,000 from £252,000 a year prior.
CEO Finch added on Wednesday: ‘As expected, reflecting the profile of outlet openings, we anticipate that completions this year will be weighted towards the second half, with first half completions being lower than those delivered in the first half of 2021.
‘We continue to expect to deliver volume growth for the full year 2022 of around 4-7% of 2021 levels, with resilient industry-leading margins.’
Persimmon plans to pay a 110p surplus capital return per share in July, given its ‘successful trading’ in 2021. There will be no further dividends in relation to 2021, the company said.
The company said: ‘Persimmon remains well-positioned in its markets. By offering high quality homes at attractive prices we are widening the opportunity of home ownership to customers who otherwise may not be able to afford it.
‘The UK housing market remains supportive and the longer-term fundamentals are strong. Demand for new build homes continues to outstrip supply and mortgage availability remains positive. We remain mindful, however, of the shorter-term uncertainties, particularly regarding consumer confidence, cost inflation, rising interest rates, the cessation of Help to Buy and the impact of the tragic conflict in Ukraine. Obtaining timely planning consents remains a challenge, with for example, the recent widening of the geographical areas impacted by elevated nutrient levels resulting in increased complexity and delay.’
The company affirmed that has set aside £75 million in respect to cladding provisions.
Flammable cladding has been in focus in recent weeks, with several housebuilders signing pledges to commit to the UK Building Safety Fund.
Building cladding has been under scrutiny since the Grenfell Tower fire in London back in 2017. The blaze, which was started by a faulty fridge in an apartment, was fed by the tower’s flammable cladding panels, killing 72 people.
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