logo-loader

Persimmon sells more homes at a higher average selling price in 2016 as Brexit worries brushed away

Last updated: 08:31 05 Jan 2017 GMT, First published: 07:31 05 Jan 2017 GMT

Persimmon home
The group opened 255 new development sites across the UK during the year

In spite of Brexit vote concerns, housebuilder Persimmon PLC (LON:PSN) sold more homes at higher prices in 2016, with the second half seeing strong customer demand continuing.

The FTSE 100-listed firm said it sold 15,171 homes during the year at an average selling price (ASP) of around £206,700, up 4% on the average selling price of £199,127 in 2015.

Persimmon, which is focused on regional building rather than the London property market, said its 2016 revenues rose 8% to £3.14bn, up from £2.90bn in the year earlier.

The builder said sales reservations through the autumn selling season were strong, noting support from competitive mortgage offers, and said its private sales rate in the second half was 15% ahead of the prior year.

In early trading, Persimmon shares were up over 4%, or 76p at 1,889p.

Analysts at Liberum reiterated a 'buy' rating on Persimmon with a price target of 1,900p.

They said: "We continue to like Persimmon for its high dividend at low risk, as its low ASP makes its product affordable and because we see relatively good margin momentum."

Persimmon said the value of its forward sales at December 31 was £1.23bn, up 12% on the previous year. The group opened 255 new development sites across the UK during the year.

It also said it expects its gross margin in the second half to have improved further, citing a continued reduction in its land cost recoveries and strong control over development costs.

Persimmon concluded: “We continue to see good opportunities to acquire additional land whilst remaining mindful of the risks associated with the uncertainty arising from the UK's decision to leave the EU.”

The builder will report its full-year results on February 27.

 -- Updates with broker comment, share price --

Caledonia Mining tackles 2023 challenges with optimism for 2024 as it...

Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL) chief executive Mark Learmonth tells Proactive's Stephen Gunnion the company faced a challenging 2023, primarily due to poor production in the first half of the year at its core asset, the Blanket Mine in Zimbabwe, and an underperformance...

1 hour, 48 minutes ago