Persimmon: Builder ups guidance amid ‘positive momentum’ on planning reform
Housebuilder Persimmon has said it would build 10,500 homes this year—at the top end of its guidance— and has outlined plans to boost construction next year as Labour’s planning reforms start to take shape.
In its half year results for the six months ended 30 June 2024, Persimmon said it completed 4,445 new, up by 196 homes compared to the same period last year.
The FTSE 250 firm said it had completed planning on a further 6,000 plots in the year to date, with—encouragingly—1,000 of those completed in July following Labour’s election win.
The company said this was equivalent to 135 per cent of planning approvals achieved in the first half of last year.
In a thumbs up to Rachel Reeves’ planning reforms, Persimmon said that it had “already started to see some positive momentum” from the policy.
“Achieving implementable planning permissions has been a challenge across the industry in recent years. We welcome the new government’s proposals to address this,” it said.
Total revenue in the half-year rose to £1.32bn from £1.19bn in 2023, up by 10 per cent, while underlying operating profit rose marginally to £152.3m from £152.2m last year.
The company said its private forward order book was up 28 per cent compared to the same period last year at £1.12bn.
Earnings per share rose to 34.7p from 34.4p.
“Strengthening consumer sentiment, improving macro-economic conditions and the government’s welcome and ambitious planning reforms that demand more of the high quality, affordable homes that are Persimmon’s core strength, are all supportive of our ambition to grow this year and in the future,” chief executive Dean Finch said.
“We are opening more sites this year and will do the same next year, demonstrating the benefit of our continued land investment in recent years. This growing and strong platform means we are ready to deliver more of the homes our country requires while securing industry-leading returns over the medium-term,” Finch added.
The positive set of results for the housebuilder was in line with market expectations.
“We’re encouraged by signs that homebuyer confidence is returning, with house prices growing again in 2024 more and mortgage approvals rebounding… the UK’s housing cycle is entering a recovery phase,” Grant Slade, senior equity analyst at Morningstar, said ahead of the results.