Persimmon: FTSE 100 builder reaps benefit of higher house prices
FTSE 100 housebuilder Persimmon told the market this morning that it expected profit for the year to the end of December to be ahead of market expectations thanks to a strong end to the year.
In a trading statement covering 2024, the firm said it delivered a total of 10,664 homes, up seven per cent on the previous year and slightly ahead of market expectations.
The average selling price was five per cent ahead of last year at around £268,500, which reflected “improving market conditions”.
Dean Finch, chief executive, said: “Customer enquiries and sales rates have been consistently ahead of the prior year since the spring selling season.”
The housing market posted a strong recovery during 2024, with house prices ending the year near record highs on the back of household income growth and the hope of further interest rate cuts.
Persimmon said it expects to deliver underlying pretax profit at the “upper end” of the £349m-£390m range pencilled in by analysts.
Results for the year will be published on 11 March.
Persimmon’s mixed outlook
However, looking into 2025, Persimmon said it was “mindful of evolving macroeconomic and geopolitical uncertainties”.
In particular, it warned that uncertainty about the timing of interest rate cuts could knock market and consumer confidence in the short-term.
Markets have dialled back bets on rate cuts over the past couple of weeks in response to changing bets in the US and fears about persistent inflation following the government’s Budget.
Investors think the Bank of England will only cut interest rates twice this year.
Persimmon also flagged the risks of “low single-digit” cost inflation as well as the impact of the national insurance hike but said it was well placed to deal with these pressures due to the strength of its land bank.
During the year, the firm achieved detailed or reserved matters planning on around 13,050 plots in 2024, up 21 per cent on the prior year, further strengthening Persimmon’s land bank.
Finch also said the government’s “ambitious planning reforms” will support Persimmon’s growth ambitions.