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Persimmon sales surpass pre-pandemic levels amid housing boom

Persimmon full-year dividend payment to come in at 235p

During the first half of the year Persimmon’s (LON:PSN) sales went above levels seen before the pandemic as the company reaped the benefits from a booming housing market.

The FTSE 100 company confirmed that its revenues came to £1.84bn during H1 of 2021, above the figure of £1.75bn seen over the same period of time in 2019.

The UK house builder’s sales were as low as £1.2bn during the first half of 2020.

Persimmon also bought 10,000 new plots of land at 48 sites, it reported, along with a forward order book amounting to £1.82bn. The group also holds £1.3bn in cash on its balance sheet.

The group also confirmed it is bringing forward its planned dividend payment of 110p to 13 August, while over the course of the entire year shareholders will receive a 235p payout.

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“Pre-Covid Persimmon had to adopt a ‘less is more policy’, a series of issues with build quality leading it to dial down temporarily on the number of homes built to ensure purchasers weren’t left unsatisfied,” says Russ Mould, investment director at AJ Bell.

“So, investors will be relieved the housebuilder has now been able to ramp up build volumes to pre-pandemic levels without apparently compromising on quality.”

“This follows up on the recent agreement with the competition authorities to support customers who have encountered issues with leasehold properties. After the scandals over wonky house builds and executive pay, Persimmon is making strides towards being a better corporate citizen.”

“It’s easy to be generous when your pockets are full so there should be little surprise that with more than £1 billion of cash Persimmon is accelerating capital returns to shareholders. However, Persimmon is also buying up land at attractive valuations, laying the foundations for future profitable growth.”

The Persimmon share price is down by 4.07% pre-lunchtime on Thursday to 2,945p.

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