Source: Sharecast
In the six months to 30 June, underlying pre-tax profit edged up 3% from the same period a year earlier to £170.1m, new home completions rose 13% to 5,189 and the average sales price of a new home was 1% higher at £285,752.
Underlying operating profit was up 10% at £189.1m. Persimmon said this was driven by increased volume and ongoing operational discipline. The interim dividend was kept at 20p per share.
The housebuilder said it was on track for around 12,500 in the full year, at the upper end of guidance, while underlying pre-tax profit was set to be in line with market expectations of £454m.
Persimmon cautioned that external build cost inflation is expected to create margin pressure into 2027. "We are taking management action through procurement savings, specification optimisation, house-type design, overhead savings and operational efficiencies to enhance them further," it said.
"While these actions may not fully offset cost pressures in 2027, they support margin resilience and preserve our medium-term opportunity to grow volumes, improve returns and generate stronger cash flows."
Chief executive Dean Finch hailed a "strong" first-half performance. "In a challenging market, this performance demonstrates the strength of our established strategy, product mix and geographic footprint, alongside the benefits of our lower cost operating model, sustained investment in the business and ongoing commitment to self-help," he said.
"Market conditions remain challenging, with affordability constraints and build cost pressures affecting the sector. We have responded quickly, taking clear management action focusing on driving operational efficiencies throughout the business. Our disciplined land buying, industry-leading cost efficiency and vertically integrated operating platform give us important structural advantages as we seek to mitigate cost pressures and support growth."
At 1017 BST, the shares were up 3.9% at 1,166.50p.
Russ Mould, investment director at AJ Bell, said: "Given the backdrop, Persimmon guiding for home completions at the top end of the expected range for 2026 is no mean feat.
"This is underpinned by strong volume growth in the first half of the year. Persimmon also reported resilient margins which only edged slightly lower year-on-year. The company’s vertically integrated model, with materials and components manufactured in-house, helps provide a measure of protection against rising costs.
"It does not however render Persimmon immune from the inflationary pressures facing the industry and this was reflected in the company quantifying a substantial headwind on this front in the coming 18 months.
"The need to have a cash buffer to withstand these pressures explains the decision to keep the dividend on hold. It is striking that Persimmon hasn’t yet pivoted towards buybacks like several of its peer group."
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