Shares of York-based house building giant Persimmon plc rose as much as 7% on Tuesday after the firm said it would reinstate a dividend after an “excellent start” to the second half of the year.
The good news for investors came despite Persimmon publishing results for the six months ended June 30, 2020 that showed profit before tax fell 43% to £292.4 million and revenue fell 32% to £1.19 billion amid the coronavirus pandemic.
Persimmon CEO Dave Jenkinson said the firm had made an “excellent start” to the second half with a 49% year on year increase in average weekly private sales rates per site since the start of July and a current forward order book of £2.5bn, a 21% increase on last year.
He said Persimmon is proposing a “modest” interim dividend of 40p per share and that further dividend payments this year “will remain under close review …”
Persimmon shares rose about 7% to around £27.90 on the stronger outlook to give the firm a current stock market value of almost £9 billion. The shares have risen 50% in the past 12 months.
Jenkinson said: “The group … reacted responsibly, swiftly and effectively to the challenges of the Covid-19 pandemic …
“Taking an early decision not to take advantage of the furlough scheme for any colleagues, we maintained good momentum in the business, continuing to serve our customers, making detailed preparations for a safe return to work and, when it was appropriate, restarting our build programmes efficiently.
“Build rates were back at pre-Covid levels by the end of the period.
“Despite the significant disruption, the group’s preparedness, agility and strength ensured a robust first half performance with 4,900 new home completions and further good progress made on our customer care improvement plan.
“The group has had an excellent start to the second half with a c. 49% year on year increase in average weekly private sales rates per site since the start of July and a current forward order book of c. £2.5bn, a 21% increase on last year.
“Our strong opening work in progress position and excellent build rate through the summer give us confidence in a positive second half outturn.
“We expect that by the end of September, we will have delivered c. 45% of our anticipated second half new home legal completions.
“As a result of the continuing strong performance of the business through this challenging period, together with our cautious optimism on the group’s prospects for the second half, we are pleased to announce that the board is proposing a modest interim dividend of 40p per share.
“Further dividend payments this year will remain under close review …”