Friday 20 July 2018

Persimmon and Bovis spread housebuilding cheer

Persimmon praised ‘resilient’ consumer confidence, while Bovis said it was on course for a ‘significant step up’ in interim profits.

Housebuilding giants Persimmon and Bovis Homes signalled robust conditions in the new build market as they reported higher first half sales and prices (Chris Radburn/PA)
Housebuilding giants Persimmon and Bovis Homes signalled robust conditions in the new build market as they reported higher first half sales and prices (Chris Radburn/PA)

By Holly Williams, Press Association Deputy City Editor

Housebuilding giants Persimmon and Bovis Homes have signalled robust conditions in the new-build market as they reported higher first-half sales and prices.

Charles Church owner Persimmon praised “resilient” consumer confidence, while Bovis said better-than-expected sales would see a “significant step up” in first-half profits.

In its half-year trading update, Persimmon posted a 5% rise in revenues to £1.84 billion in the six months to June 30.

Consumer confidence remains resilient in our markets and attractive mortgage products provide compelling support to purchasers of new homes Persimmon

It completed 8,072 house sales – up 3.6% on a year earlier – of which around 4,900 were private sales.

Persimmon said the average selling price of private homes lifted 2% to around £236,700.

“Consumer confidence remains resilient in our markets and attractive mortgage products provide compelling support to purchasers of new homes,” the group said.

It also said it had a “strong platform to achieve further growth in the second half”, with forward sales 5% higher at £1.68 billion.

Bovis Homes added to the cheer as it said in a trading update posted separately that it is set for a “significant step up” in first-half profits after seeing a better-than-expected 4% rise in legal completions to 1,580.

Bovis said its average selling price in the private sales market was around £335,000 in the first half of 2018, up from £334,700 a year earlier, with overall pricing remaining “firm”.

It said: “The housing market fundamentals remain robust, with good demand for new homes across all our regions and underlying pricing remaining firm.

“We are very pleased with the group’s first-half performance and are in a strong position to deliver upon our expectations for the full year.”

FTSE 100-listed Persimmon saw shares rise 1%, with Bovis edging higher in the FTSE 250, while rival Barratt Developments also received a boost, up more than 1%.

The half-year updates come after industry survey figures on Tuesday showed that a buoyant house-building market helped growth in the construction sector rebound to a seven-month high in June.

The latest Markit/CIPS UK construction purchasing managers’ index (PMI) showed a reading of 53.1 in June, up from 52.5 in May and the highest since November.

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Persimmon chief executive Jeff Fairburn is paid 3,000 times more than the company’s lowest paid worker (Persimmon/PA)

But Persimmon has continued to be dogged by controversy over pay for top bosses after its latest disclosure that chief executive Jeff Fairburn is paid 3,000 times more than its lowest paid worker.

The revelation came in response to a request for information in a recent Business Select Committee hearing with Marion Sears, chairwoman of Persimmon’s remuneration committee.

Persimmon has been at the centre of a row over pay since it agreed pay deals for top bosses worth more than £100 million.

The group saw 48.5% of investors vote against the pay plans in April as they vented anger over a £75 million payout for Mr Fairburn.

Press Association

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