Persimmon Says First-Half Earnings Rise 40% on Wider Margins
Persimmon Plc (PSN), the U.K.’s largest homebuilder by market value, said first-half earnings increased 40 percent as the company sold more homes at wider profit margins.
Profit before tax climbed to 135 million pounds ($211 million), from 97 million pounds a year earlier, the York, England-based company said today in a statement. Analysts expected 132 million pounds, the average of three estimates in a Bloomberg survey. Persimmon’s operating margin widened to 15.1 percent from 12.1 percent.
“We’ve been working hard on our costs,” Chief Executive Officer Jeff Fairburn said in a telephone interview. “We hope to see some further improvement this year.”
U.K. homebuilders have surged in London trading this year as land bought cheaply after the financial crisis widened profit margins and the government stepped up efforts to help buyers finance home purchases. Persimmon said last month that the government’s Help-to-Buy program, introduced in March, helped the company achieve a 12 percent increase in first-half revenue.
“Every week we see strong demand on Help-to-Buy and it’s improving buyer sentiment and getting more people into the market,” Fairburn said.
Persimmon gained 0.5 percent to 1,173 pence in London trading as of 8:48 p.m. The shares have risen 57 percent this year.
Net income rose to 100.9 million pounds, or 33 pence a share, from 75.4 million pounds, or 24.8 pence, a year earlier. Underlying basic earnings per share advanced 35 percent to 34.1 pence.
The average selling price of a Persimmon home increased 5 percent to 179,199 pounds. Home completions climbed 7 percent to 5,022. Persimmon said it’s working to increase production, investing in land and in construction in response to demand in all of its regional markets
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