The number of homes Persimmon completed in the first half of 2022 fell to 6,652 from 7,406 in the same period a year ago and revenue fell to £1.69bn from £1.84bn.
Despite completions falling, Persimmon were able to achieve a higher new home average selling price of £245,597 and remained positive on the rest of 2022.
“We continue to expect our volume delivery to be significantly higher in the second half of the year,” said Dean Finch, Persimmon Chief Executive.
As highlighted by the higher average selling prices, Persimmon’s fall in revenue was capped by a strong housing market that maintained prices, even as volumes fell. Indeed, Persimmon managed to increased New housing gross margins to 31%, up from 30.9%, in the face of rising prices and labour costs in the UK economy.
“House prices have proved remarkably robust since the pandemic began, buoyed by pent-up savings and cheap mortgages. Persimmon has gushed cash in this environment and is returning record amounts of it to shareholders,” said Charlie Huggins, Head of Equities at Wealth Club.
However, Huggins suggested that the favourable conditions may be coming to an end as economic conditions begin to soften and house prices dip.
“Persimmon is performing strongly in areas it directly controls. It has one of the best land banks in the industry and has taken steps to improve the quality of its homes and customer service. But, make no mistake – the biggest reason for Persimmon’s success is high house prices, and the general strength of the housing market.”
“That is something over which it has no control, and it could be about to change.”
Persimmon shares were broadly flat, down 0.2% at 1,845p at the time of writing.