Persimmon H1 revenue up 12% to £1.6bn

York-based house builder Persimmon said its revenue grew 12% to £1.66 billion in the six months to June 30 and that “consumer confidence remains resilient and compelling mortgage rates continue to offer good support to new home buyers.”

Persimmon shares rose more than 2% to around 2,343p to give it a current stock market value of more than £7 billion.

In a trading update ahead of its half year results on August 22, Persimmon said its average selling price improved by 3.5% to £213,000.

“The group has strong momentum moving into the second half of the year, with total forward sales value at 30 June 2017 of £1.60 billion, 18% higher than last year …” said Persimmon.

“The group’s trading performance in the first half of the year has been excellent.

“We have increased legal completion volumes by 8% to 7,794 new homes …

“We have continued to experience good levels of customer demand since the group’s AGM trading update on 27 April 2017, with the market taking the snap UK General Election in its stride.

“Consumer confidence remains resilient and compelling mortgage rates continue to offer good support to new home buyers …

“We anticipate that the group’s operating margin in the first half of 2017 will comfortably exceed the 25.7% delivered in the second half of the prior year …

“The group has remained active in the land market with 47 new land deals for c. 9,300 new homes that will provide high quality returns in future periods.

“We have pulled through c. 3,000 plots from our strategic land portfolio within this total, representing 38% of our first half land consumption. Our land spend totalled c. £370 million (2016: £305 million) …

“A key feature of the group’s strategy is our commitment to return surplus capital to shareholders over the long term.

“On 27 February 2017 the board announced an additional payment under the group’s capital return plan of 25p per share (or £77 million) which was paid to shareholders on 31 March 2017.

“This raised the total value of the plan to c. £2.85 billion, or £9.25 per share, to be returned to shareholders by the end of 2021.

“This represents an increase of 49% over the original value of the plan at launch in 2012.  

“The scheduled instalment of 110p per share (or £339 million) under the plan was paid on 3 July 2017.

 “At 30 June the group held £1,120 million of cash (2016: £462 million) prior to payment of the scheduled capital return of £339 million on 3 July 2017.”