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Persimmon upbeat as profit soars

House builder Persimmon said it was encouraged by stronger trading and initial signs of an improving mortgage market as it posted a better than expected fifty two per cent jump in full year profit.

House builder Persimmon said it was encouraged by stronger trading and initial signs of an improving mortgage market as it posted a better than expected fifty two per cent jump in full year profit.

The group said underlying pre-tax profit rose to £225.1m for the year ended December 31st 2012 from £148.1m a year earlier. Revenue was up 12% to £1.72bn.

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Legal completions increased by 6% to 9,903 while the average selling price increased 6% to £175,640. The group, which opened 125 new sites in 2012, said forward sales rose to 9% to £1bn.

Underlying basic earnings per share increased by 57% to 57.6p. Persimmon said it aims to open 90 new sites in the first half of the year and hopes to boost building sites by 5% in 2013.

Chairman Nicholas Wrigley commented: "We have made a strong start to the new year, with forward sales reaching the £1bn milestone, an increase of 9% on last year. Mortgage availability remains the key constraint to the housing market."

"However, there are some signs that lenders are embracing the Government's Funding for Lending scheme and we have seen some recent reductions in mortgage rates. We anticipate increasing our active outlet number to around 390 sites by the end of June, helping to increase the volume of new homes that the country needs."

Persimmon said it was on track to make its first dividend payment of 75p per share in June 2013, subject to shareholder approval.

Net cash stood at £201m at December 31st 2012 compared to £41m cash in 2011.

Chief executive Mark Farley retires in April and will be replaced by Jeff Fairburn, the group's Managing Director and Chief Executive of its northern division.

CJ

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