Persimmon weekly private sales up sharply in first quarter

Housebuilder Persimmon experienced a strong start to 2012 with the spring selling season continuing to outperform the previous year as weekly private sales rise around 20%.

The York-based company, which has seen visitor levels to its sites rise 10% over the first fifteen weeks, said it is confident it can operate successfully in current market conditions. Cancellation rates are running at historically low levels of 17%.

"We continue to be encouraged by the level of customer enquiries registered on both our Persimmon Homes and Charles Church websites and we have seen a further increase in interest following the Government's launch of the NewBuy 95% loan-to-value mortgage guarantee product in March," it said.

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Persimmon believes the scheme will support increased sales activity for the UK housebuilding industry once all the major mortgage lenders have entered the market.

Its order book, including legal completions already achieved for the current year, rose 9% from last year to £1.24bn.

The FTSE 250 firm, which recently announced a new long-term strategy to develop into a larger business over the next decade, said as part of this strategy its plans to return £1.9bn (£6.20 per share) of capital to its shareholders over the next nine and a half years.

It added that further progress has been made on margins and cash generation and recent weeks' sales confirm that the trend of increasing profitability is continuing.

Persimmon's cash position end of March was £12m compared to borrowings of £113m in 2011.

"Whilst the availability of mortgage credit remains the key constraint on the UK housing market, we remain confident that Persimmon can operate successfully within existing market conditions as we execute our new strategy and build a larger, stronger Persimmon over the next decade," the group said.

CJ