FTSE 100 Housebuilder Persimmon Drops 3% As Revenues And Profits Rise

Core Viewpoint - Shares in FTSE 100-listed Persimmon fell 2.7% despite reporting an increase in sales and profits for the first half of the year [2] Financial Performance - Housing revenues increased by 12% to £1.31 billion in the first half of the year [2] - Total completions rose by 4% to 4,605 homes, with average selling prices up by 8% to £284,047 [2] - Underlying operating profit improved by 13% to £172 million, driven by increased volume and operational discipline [4] - Pre-tax profit remained flat year on year at £146.7 million [4] - Statutory revenues rose by 12% year on year to £1.5 billion [4] Market Conditions - The company noted improvements in buyer affordability due to interest rate cuts, looser lending rules, and real term pay rises [3] - However, these improvements were offset by increases in council tax, national insurance, stamp duty, and energy bills, along with macroeconomic uncertainty affecting consumer sentiment [4] Sales and Completions Outlook - The firm is on track to achieve total completions of 11,000-11,500 properties for the full year and 12,000 in 2026 [3] - The private sales rate (excluding bulk sales) increased to 0.62 from 0.59 in the first half of 2024 [4] - Net private sales in the five weeks since the end of June rose to 0.61, up from 0.55 in the same period of 2024 [7] Order Book and Future Positioning - The private forward order book increased by 11% year on year to £1.25 billion, with an average sales price of £292,800, up 1.3% year on year [8] - Including partnerships, the order book is 9% higher at £1.86 billion [8] - The company is approximately 80% secured on private completions and fully secured on partnerships completions for the full year [8] Analyst Commentary - Analysts noted that Persimmon is making steady progress despite affordability pressures and macroeconomic uncertainty [8] - Vertical integration, increased in-house production, and targeted incentives are helping to protect margins [8]