York-based housebuilder Persimmon — still under shareholder fire for excessive executive compensation — said on Thursday its revenues for the first six months of 2018 were £1.84 billion, 5% higher than last year.
Persimmon stressed that under its capital return plan, about £4.07 billion, or £13 per share, will be returned to shareholders by the end of 2021.
In a trading update, Persimmon said new housing legal completion volumes increasied by 278 homes or 3.6% to 8,072 homes and average selling price rose 1.2% to about £215,800.
“Consumer confidence remains resilient in our markets and attractive mortgage products provide compelling support to purchasers of new homes,” said Persimmon.
“The value of the group’s total forward sales of new housing at 30 June 2018 of £1.68bn was 5% higher than last year (2017: £1.60bn) in addition to the increase of 5% in housing revenues legally completed in the first half.
“The group has a strong platform to achieve further growth in the second half.
“The average selling price of the c.4,900 new homes sold forward into the private sales market was c. £236,700, c. 2% ahead of the prior year.
“The group’s new homes sold forward to its housing association partners at 30 June had an average selling price of c. £117,600 …
“We expect continued improvement in the group’s underlying housing operating margin in the first half of 2018 building on the performance of the group in the second half of last year (2017 H2: 28.8%).
“Despite inflationary cost pressures, disciplined cost control and continued efficiency savings have supported this margin progression.
“During the first half of the year, the group has brought 45 new land parcels for the delivery of c. 11,000 new homes into the business in a land market that has continued to provide good quality opportunities.
“Our total land spend in the period was c. £343m (2017: £369m).
“We have successfully converted c. 3,000 plots from the group’s strategic land portfolio, which represents c. 37% of the group’s first half land consumption.
“Our long-term commitment to return surplus capital to shareholders is central to the group’s strategy.
“On 27 February 2018 the board announced enhanced payments under the group’s capital return plan of 235p per share over the next three years.
“For 2018 an additional payment of 125p per share or £389m was paid to shareholders on 29 March with a further 110p per share or £344m paid on 2 July.
“This increased commitment raised the total value of the plan to c. £4.07bn, or £13.00 per share, to be returned to shareholders by the end of 2021.
“This represents an increase of c. 110% over the original value of the plan at launch in 2012.
“At 30 June the Group held £1,154m of cash (2017: £1,120m) prior to payment of the scheduled Capital Return of £344m on 2 July 2018.”