Persimmon beats profit forecasts in the first half

While a lot of Persimmon's first-half figures were already guided to in the pre-close trading update last month, the house-builder still surprised to the upside with its profits coming in ahead of expectations.

Underlying pre-tax profits (excluding exceptionals and goodwill impairments) jumped by 65% from £59.7m to £98.7m in the six months to June 30th. Reported pre-tax profit came in at £98.3m, well ahead of Peel Hunt's £90.3m forecast.

As already reported by Persimmon, the firm said that it had legally completed 4,712 new homes in the first six months, up 6% year-on-year, while the average selling price was up 7% at £171,400. Revenues increased by 13% from £712.8m to £806.7m. Net assets per share increased by 4% from 601.1p to 625.7p.

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"The Group's strong performance in the first half of 2012 represents an excellent start to the delivery of the new strategy announced at the start of the year. This strategy involves the return of £1.9bn of surplus capital to shareholders over the next nine years whilst investing further in the business to support Persimmon's growth into a stronger, larger business at the end of the capital return period, 2021," said Chairman Nicholas Wrigley.

Private sales weekly reservation rates in the first half increased by 17% but, in line with the normal quieter summer selling period, sales rates have slowed since the end of the period. Since the start of the third quarter, the rate had fallen to 5%.

"We expect conditions in the UK housing market to remain challenging reflecting the wider issues within the economy. However, we anticipate continued firm underlying demand for new homes but this will remain constrained by the low level of mortgage availability," Wrigley said.

"I am confident that the future growth of Persimmon will continue to be based upon the solid foundations which have delivered such a good result in the first half of 2012 in line with the long term strategic course we have set out," he said.