By Max Clarke
The UK’s biggest housebuilder, Persimmon (LSE: PSN), has weathered the turbulent housing market to deliver strong performance, posting a profit of £60m- up 52% in a year.
The surge comes despite completing fewer houses- 4,400 compared to 4,600, for a lower price- £162,000 compared to £168,000, than H1 2010. The Group were able to do this by making improvements in their profit margins, helping to deliver the record profits.
“The significant improvement in underlying profitability of the business has resulted from the combination of gross margin gains and a more efficient capital structure,” Nicholas Wrigley, Persimmon Group Chairman, outlined in the company’s half year statement.
Share dividends jumped by a third on the news, to 40p a share and the company added to their land assets with a further 8%- equal to some 7,500 new plots.
“Whilst the UK housing market remains stable we expect that it will continue to be challenging due to the overall economic situation,” continued Wrigley.
“We expect the overall growth in new home sales volumes to reflect the developments in the wider economy. We anticipate legally completing a similar number of new homes during 2011 as we did in 2010. Our new site opening programme will continue to support sales and our consented landbank will assist in the delivery of new outlets over the long term. This high quality asset base provides an excellent platform for the future profitable growth of the Group.”