Persimmon plc (LON: PSN) have remained optimistic in their ability to deliver results, despite tough Brexit and market conditions.
Persimmon reported that Summer trading had met expectations, and this was down to robust trading and consumer resilience, following comments by many FTSE100 (INDEXFTSE: UKX) firms.
Competitors such as Taylor Wimpey (LON: TW) and Redrow plc (LON: RDW) also face similar challenges to Persimmon, commenting on Brexit challenges as an obstacle to trading.
The British Housebuilding firm reinstated their faith in consumers to stimulate business despite wider macroeconomic challenges.
The strong housing market, it said, reflects solid employment in the UK and “some” real wage growth, as well as low interest rates and a “competitive but disciplined” mortgage market.
In the second half of 2019, Persimmon commented on the ‘resilient’ trading patterns alluding to full sale allocations for the year.
Around £950 million of forward sales are secured beyond 2019, compared to £987 million this time a year ago.
Despite the fall in forward sales, the housing market has been slow amid falling house price growth.
Therefore, the fall cannot be attributed to poor business performance, but rather slow market conditions and a period of tough trading.
“I am confident the continued successful implementation of our detailed customer care improvement plans together with our strengthened forward build position, healthy forward sales, robust balance sheet and industry-leading land holdings provide a sound platform for the successful future development of the group,” said Chief Executive Dave Jenkinson.
Jenkinson added “”Persimmon’s top priority is the delivery of higher levels of quality and customer service through the implementation of its detailed customer care improvement plan. Central to this plan is putting customers before volume,”
Sales volumes for the first half of 2019 dipped 6% year-on-year to 7,584 homes, but this was due to an approach of selling homes only when they are at an advanced stage of construction. Persimmon expects second half sales to be above the first half.
“We are mindful of the uncertainties facing the UK economy but remain keen to bring new developments through the planning system as promptly as possible to enable construction activity to commence and new homes to be delivered to the communities we serve,” the company said in a statement to the markets.
Shares of Persimmon climbed 3.08% to 2,346p during Thursday trading. 6/11/19 11:39BST
