Persimmon Reports Lower First-Half Profits

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By Ian Walker

Home builder Persimmon has announced a significant decrease in first-half pretax profit, falling short of market expectations. This decline can be attributed to lower house sales and a reduced forward order book compared to the previous year.

In the six months ending June 30, Persimmon recorded a pretax profit of £151.0 million ($192 million), a significant drop from the £439.7 million achieved during the same period last year. This figure also falls short of the expected £165.4 million based on the Visible Alpha consensus.

Revenue decreased from £1.69 billion to £1.19 billion, falling short of the consensus estimate of £1.07 billion.

During this period, Persimmon sold 4,249 houses at an average price of £256,445, compared to the sale of 6,652 homes with an average price of £245,597.

Despite these challenges, the company plans to complete at least 9,000 home sales this year, surpassing its previous guidance range of 8,000 to 9,000. However, this guidance is significantly lower than the 14,868 completions achieved in 2022.

Persimmon’s current forward order book stands at £1.6 billion, representing a decrease from the previous year’s £2.2 billion.

Last week, the Bank of England increased interest rates for the fourteenth time since December 2021, bringing them to a 15-year high of 5.25%.

The board of Persimmon has announced an interim dividend of 20 pence per share.

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