Shares in housebuilder Persimmon (PSN) fell 5.2% to £26.44 on an announcement that was not quite as bullish as that put out by peer Taylor Wimpey (TW.) yesterday.
You can read more on Taylor Wimpey’s update, which fired gains across the sector, here. Persimmon reported strong trading and is fully sold up for the current year, while forward sales reserved beyond 2020 are up 43%, according to the company’s third quarter trading statement.
The group has around £1.36 billion of forward sales reserved beyond 2020 compared to £950 million in 2019 with strong rates of build supporting future delivery. Selling prices remaining firm and the group's average weekly private sales rate per site was around 38% ahead of last year.
The company held around £960 million in cash at 31 October 2020, up from £371m in 2019, and had deferred land commitments of around £325 million.
The board unveiled a part payment (of 40p per share) of the postponed final dividend for 2019 in September, and will pay a second interim dividend of 70p per share on 14 December 2020 to shareholders on the register on 27 November 2020 in satisfaction of the Board's previously indicated final dividend for 2019.
‘DEGREE OF CAUTION’
Davy analyst Colin Sheridan commented: ‘Persimmon has increased its year-to-date dividend pay-out to 110p, with the announcement of a further 70p dividend to be paid in December. This signals a return towards previous levels (235p) of shareholder returns next year.’
AJ Bell investment director Russ Mould added: ‘Like several of its peers Persimmon is buying land, potentially positioning it to benefit from stronger returns as homes are sold from land bought at depressed levels.
‘Although interestingly its outlay has been less than some of its peer group, implying a greater degree of caution.
‘The company also continues to work to address historic failings in customer care and build quality - with its retention scheme allowing customers to hold back funds to deal with any snags that arise.
‘An acknowledgement that this is “helping to drive cultural change” in the business suggests it knows there is still work to do in this area.’
