Persimmon H1 Profit Down, Forward Sales Up; Declares Dividend; Sees Strong Start To H2

British house building company Persimmon plc. (PSN.L) reported Tuesday that its first-half profit before tax fell to 292.4 million pounds from last year’s 509.3 million pounds.

Underlying operating profit was 293.2 million pounds, compared to 510.1 million pounds a year ago. Underlying new housing operating margin was 26.6 percent, below last year’s 31 percent.

Total revenues for the first half of the year were 1.19 billion pounds, down from 1.75 billion pounds last year.

New housing revenues fell 33 percent from last year to 1.10 billion pounds. The company completed 4,900 new homes in the first half, lower than last year’s 7,584 homes.

Average selling price grew to 225,066 pounds from 216,942 pounds a year ago.

Total forward sales, including legal completions in the second half so far, grew 21 percent to 2.5 billion pounds.

Dave Jenkinson, Group Chief Executive, said, “Our strong opening work in progress position and excellent build rate through the summer give us confidence in a positive second half outturn. We expect that by the end of September, we will have delivered c. 45 percent of our anticipated second half new home legal completions.”

The company further announced that the Board is proposing a modest interim dividend of 40 pence per share. Further dividend payments this year will remain under close review.

Looking ahead, the company said short term outlook remains robust with strong start to the second half and healthy level of forward orders.

The company sees potential medium term risks to demand associated with Covid-19, rising unemployment and Brexit remain but long-term housing market fundamentals continue to be strong.

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