Persimmon shares rose on Tuesday after the housebuilder released a positive assessment of full-year trading, with the number of completions and average house sales prices rising as the group made investments for the future.
Persimmon has gone a long way in distancing itself from the pessimistic narrative surrounding the UK residential property market by posting a 7% increase in completions and profit before tax that is set to be towards the upper end of expectations.
Persimmon shares were 4% higher at the time of writing.
Persimmon has delivered 10,664 homes, a 7% increase from the previous year, and a 18% rise in private home completions to 9,075, with a slight increase in private average selling price to £287,150. The blended average selling price across all properties rose 5% to £268,500, reflecting improved market conditions and favorable sales mix.
Net private sales per outlet per week increased 21% to 0.70, supported by a network of 270 active outlets. Forward sales reached £1.15bn, up 8% from the previous year, with private forward sales increasing 31% to £653m.
The company expects full-year underlying profit before tax for 2024 to be around the upper end of market expectations, ranging from £349m to £390m.
The upbeat sales number may just be enough to help Persimmon shares rebound from around the 1,000p mark, where it found strong support in late 2023.
“Persimmon’s 2024 trading round-up showed it’s sitting on solid ground, despite the group having faced its fair share of struggles in recent years. From their peak, both volumes and operating margins have fallen much harder than the broader sector,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“But Persimmon looks to have turned a corner. New home completions and average selling prices both exceeded market expectations, up around 7% and 5% respectively last year, as buyer demand was consistently higher throughout 2024. That’s given the group a solid platform to build on over the rest of 2025.
“Looking ahead, the order book is in a healthy position at an impressive £1.1bn, giving decent near-term revenue visibility. The potential of rising build cost inflation had been an area of concern heading into these results, but the low single-digit outlook for 2025 is a challenge that Persimmon should be able to navigate with ease. Its in-house materials business is a key differentiator from peers and should offer the necessary protection from this.”