Persimmon has announced a very positive set of half-year results for 2024, which may prove to be a major turning point for the housebuilder in the face of challenging market conditions.
Investors will be delighted to learn that the housebuilder is set to deliver completions at the top end of its guidance for the year as the backdrop shows early signs of improvement.
However, the strength of today’s results can not be attributed solely to the macro environment. Persimmon’s numbers have a distinct tone of positivity to them that makes the builder stand out from its peers, who are still reporting falling completions in the same market.
The company reported a significant 5% increase in new home completions, reaching 4,445 in the first half of 2024. This uptick was primarily driven by an impressive 14% surge in private completions, totalling 3,742 homes. Persimmon now confidently projects full-year completions to hit approximately 10,500 units, placing them at the upper limit of their previous guidance.
Total Group revenue climbed to £1.32 billion, marking a substantial improvement from the £1.19 billion recorded in the same period last year. This growth can be attributed to both increased completions and a rise in the average selling price, which now stands at £263,288.
Since 1 July, the company’s net private sales rate has soared by 68% compared to last year, reaching 0.69 per outlet per week.
“These are solid first half results from Persimmon with improved sales and robust average sales rates. As a result, the group now expects 10,500 home completions for the year, at the top end of its previous guidance range,” said Wealth Club’s Charlie Huggins.
“There are signs that confidence is returning to the housing market.
“Interest rates have finally started to be cut, mortgage rates are coming down and a landslide labour victory provides further fuel for optimism, particularly given their pro-housing agenda.”
The recent changes in the UK government and Labour’s new homebuilding agenda promisse to provide support for Persimmon when it truly kicks in.
The company has invested £195 million in land during the first half of 2024 and has secured detailed planning on approximately 6,000 plots year-to-date. This strategic move has strengthened their land bank, which now stands a 81,545 plots owned and under control.