Housebuilder Persimmon (PSN) ticks up 0.8% to £27.11 as it posts a strong first quarter trading update ahead of a potentially fractious AGM this lunchtime.
The company reports forward sales up 8% to £2.76bn year-to-date with average selling prices up from £229,000 to £236,500 year-on-year. The board also expresses its confidence in the future prospects of the group.
The relatively muted response may reflect weakness in the wider market and shareholder disquiet over executive pay ahead of today’s meeting.
MANAGEMENT BONUS KERFUFFLE
AJ Bell investment director Russ Mould says: ‘Management are under fire for the £100m bonus (later trimmed to £75m) afforded chief executive Jeff Fairburn and are also expected to face pressure from several major investors over paying its employees the “real living wage”.
‘The group's reminder to the market that the total value of its capital return programme is now £4bn, after a lift in the remaining payments, may help keep shareholders on side.’
For his part Canaccord Genuity analyst Aynsley Lammin is impressed by the update and reiterates his ‘buy’ call and £29.50 price target.
He says: ‘The group looks in good shape with the market also seeing good trading conditions for the year to date. Clearly, the dividend yield looks one of the most attractive in the sector and most well supported by a strong business.’
Based on consensus forecasts the shares offer a forward dividend yield of 8.6%.
