Housebuilder Persimmon sees 13% rise in profits
PUBLISHED: 08:49 21 August 2018 | UPDATED: 08:49 21 August 2018
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Housebuilding giant Persimmon brushed aside concerns over the impact of the recent interest rate hike as it posted a 13% leap in profits and said customer demand remained resilient.
The Charles Church group said it had seen “encouraging” trading through the quieter summer months, with demand continuing to be supported by healthy employment trends and low interest rates.
This comes despite the Bank of England’s move to hike interest rates from 0.5% to 0.75% earlier this month – the highest level for nearly 10 years.
Persimmon reported pre-tax profits of £516.3m for the six months to June 30, up from £457.4m a year earlier.
Chief executive Jeff Fairburn – who has come under heavy fire over his pay package in recent months – said the group is also set to deliver further “high-quality, sustainable growth”.
He said: “We have continued to experience good levels of customer interest in our housing development sites as we trade through the quieter summer season.
“Customers are continuing to benefit from a competitive mortgage market and confidence remains resilient based on healthy employment trends and low interest rates.”
Persimmon also said it had taken advantage of the prolonged hot summer weather to push on with its build plans and make up for delays caused by the snow and freezing conditions earlier this year.
It said group revenues lifted 5% year on year to £1.84bn in the first half of the year, with house sales by volume up 3.6% to 8,072.
Its group-wide average sale price lifted 1.2% to £215,813 – which marked a slowdown on the 4% growth seen a year ago.
Its average private sale price for the Persimmon brand rose 4.4% to £223,308 and the sales price for Charles Church increased by 2.2% to £355,574.
Forward sales since July 1 are 6% higher at £2.12bn, with 6,528 new homes forward-sold in the private market at an average selling price of around £235,800, according to Persimmon.
But the firm continues to be dogged by controversy over excessive pay for top bosses.
Earlier this month, Mr Fairburn was named top of a High Pay Centre list of the 10 highest-paid bosses in 2017.
His £47m salary is around 3,000 times more than Persimmon’s lowest paid worker.
The company has also been criticised for agreeing pay deals for a string of top bosses worth more than £100m.
The group saw 48.5% of investors vote against the pay plans in April as they vented anger over a £75m payout for Mr Fairburn.