Persimmon profit up 23% to £775m; revenue £3.14bn

York-based housebuilder Persimmon said its 2016 revenue increased 8% to £3.14 billion and profit before tax rose 23% to £774.8 million as it delivered 15,171 homes across the UK, an increase of 599 on last year.

Persimmon said its average selling price of £206,765 was up 3.8% on 2015. 

Persimmon shares rose 10p to about 2,035p, giving it a current stock market value of about £6.2 billion.

Nicholas Wrigley, Persimmon chairman, said: “The strength of the group’s operating model is demonstrated by our ability to grow completion volumes by more than 60% and investing £2.6 billion of cash in land through this period while simultaneously returning over £1 billion of excess capital to shareholders.   

“Customer activity in the early weeks of the 2017 spring season has been encouraging.

“The further increase in the capital return plan demonstrates the board’s confidence in the group’s prospects.”

In his outlook, Wrigley said the UK new build housing market remained confident with customer demand for new homes supported by compelling mortgage products.

“We are pleased with customer activity in the first eight weeks of the 2017 spring season … ” said Wrigley.

“Current total forward sales, including legal completions taken so far in 2017, are £1.89 billion, 9% ahead of the previous year.

“The group’s overall private reservation volumes in the forward order book are 6% ahead of last year allowing for the first eight weeks private sales rate per site being 4% lower at this point.

“Cancellations remain low. Over the first few weeks of the year we have achieved some modest selling price improvement.”

But he added: “However, to increase new home supply the planning system will need to allow the release of more land for development by the industry.

“We are encouraged by the government’s action in continuing to seek improvements in the planning system with the consultation measures included in the recent Housing White Paper.

“By opening new sales outlets in increasing numbers, together with investing in training skilled trades people, the industry will be able to expand output and fulfil the housing needs of local communities across the UK.”