Persimmon to step up building programme

HOUSEBUILDER Persimmon, parent company of Suffolk-based Persimmon Homes Anglia, said yesterday it planned to start work at 90 new sites after further signs of improvement in trading conditions.

HOUSEBUILDER Persimmon, parent company of Suffolk-based Persimmon Homes Anglia, said yesterday it planned to start work at 90 new sites after further signs of improvement in trading conditions.

The announcement came as the group reported pre-tax profits of �77.8million for last year, compared with a �780m loss in 2008 when results were hit by write-downs due to lower property valuations.

The company wrote back �74.8m into yesterday's figures, meaning that profits without exceptional items were �3m.

Persimmon also reported a 7% rise in sales since the beginning of the year and said the sales rate per site was up by a fifth, with the company currently operating from 370 locations, 12% fewer than a year ago.


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Persimmon said visitor numbers had been “steadily increasing” while cancellation rates looked to have stabilised at around 16%, below the long-term average of 20%. The work on the 90 additional sites would commence in the first half of this year, subject to the continuation in market conditions, it added.

Persimmon halted work in April 2008 before opening 40 new sites in the first half of last year and a further 50 in the second half. Some of the sites were assisted by Government grant funding for affordable homes.

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With prices remaining firm since the beginning of the year, Persimmon said it would look for an improvement in operating margin from its current level of 6%.

However, the company added: “It is too early to make a precise forecast about the housing market, particularly in an election year, and we will remain cautious in our investment decisions.

“We will continue to look to reduce debt levels again this year, although we remain ready to take advantage of any suitable opportunities as they arise.”

Net borrowings reduced to �267.5m at the end of the year, down from �600.7m in 2008 and well within its facilities of �1bn.

Andrew Fuller, managing director for Persimmon Homes Anglia, said: “We are delighted to see an ever increasing demand in our new homes, a clear sign that we are now heading out of the recession. Reservation rates are two to three times more than they were 12 months ago, with cancellation rates at an historic low.

“Prices have stabilised and in some areas we have seen significant price growth during the last six months, with demand on certain developments well ahead of supply.

“Business has increased to the extent that we recruited new staff during the second half of 2009 and we shall be launching several new developments across Norfolk and Suffolk during 2010.

“In addition we have an extensive land bank and we are looking at further opportunities to purchase land in the right locations, demonstrating our confidence in the future economy.”

Panmure Gordon stockbrokers said yesterday's results suggested its pre-tax profits forecast for this year could rise to �75m from �13m.

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