Housebuilder Persimmon (PSN) gained 5.2% to £25.60 after it followed up yesterday’s sector boost from the increased stamp duty threshold with a positive trading update.

By the end of June the company confirmed it had returned to the build levels from before the pandemic.

It reported 'encouraging' sales levels as forward sales of new homes reached £1.86bn by 30 June, up 15% on last year and its build programme returned to normal levels.

In a trading update covering the period from 1 January to 30 June 2020, the company said that total revenues were £1.19 billion, compared to £1.75 billion the previous year, although housing revenues of £1.1 billion for the first six months were 33% lower than the prior year when total revenues were £1.65 billion.

SALES REBOUND

It announced new home legal completions of 4,900 at an average selling price of around £225,050, compared to £216,942 in 2019.

The company reported a strong performance in the six-week period since sales offices re-opened in mid-May, with average weekly net private sales reservations of 278 new homes, up 30% on the same period last year.

In the nine weeks ended 17 May 2020, the company secured approximately 1,600 gross reservations.

Persimmon confirmed it has not made use of the government's Coronavirus Job Retention Scheme to furlough staff and that it has no plans to access any UK government's Covid-19 funding.

Smaller peers Vistry (VTY) and MJ Gleeson (GLE) were also higher as they put out their own positive updates. Vistry said it expected its gross margin to be restored in the second half as market trends improved, while affordable housing specialist MJ Gleeson announced it expected to hit revised expectations.

Davy commented: ‘Persimmon has flagged that due to its dynamic response to the crisis (keeping all staff on full pay, support to subcontractors and suppliers etc.), it has been able to return its build programmes to normal levels by the end of June.

‘The ability to return volumes to 2019 levels is beginning to look like an increasing possibility both for the company and the wider sector.’

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Issue Date: 09 Jul 2020