Persimmon profits up almost a third

Persimmon Homes is celebrating a rise in profits.

Persimmon Homes is celebrating a rise in profits. - Credit: PA

Housebuilder Persimmon saw its profits jump by almost a third as the industry continues to benefit from a strong property market.

The York-based builder - which trades as Persimmon Homes, Charles Church and Westbury Partnerships - said its pre-tax profits in the six months to the end of June lifted 31% to £272.8 million compared to a year ago as the UK’s “economic recovery continues to progress”.

It added that it had sold 6,855 new homes over the first six months, up 7% compared to the same period a year ago, while average selling prices in the period lifted 4% to £194,378. The firm’s forward order book stands at £1.7 billion, a 12% increase on the same point last year.

It reported that the mortgage market saw firm customer demand throughout the first half of the year, with customer activity strengthening further after the general election in May.

Moves by the Bank of England last year to ensure banks and building societies provided affordable mortgages had made the market more sustainable, it added.

Chief executive Jeff Fairburn said: “Persimmon has traded well in the first half of 2015. The group continues to take advantage of the current market opportunities to deliver sustainable growth whilst also utilising its excellent cash generation to build a strong asset platform for the future.”

He added that even though the industry had entered its traditionally slower summer weeks, its sale reservation rate since July 1 is currently 5% ahead of the same period last year.

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The firm said: “We anticipate a good autumn selling season after the summer holiday period draws to a close in early September.”

The housebuilder reiterated its 2012 pledge to return £1.9 billion of cash to shareholders over 10 years.

Brokers at Liberum said: “Very strong interim results is good news, but the market could be disappointed on lack of change to capital return programme.”

Shares lifted just over 1%.