Housebuilder Persimmon PLC (LON:PSN) said the housing market remained resilient in the first half amid uncertainty surrounding the UK general election and Brexit as it reported an increase in profits.
In the six months ended 30 June, profit before tax rose 30% to £457.4mln compared to the same period a year earlier.
Revenue increased 12% to £1.66bn as legal completions climbed 8% to 7,794 and the average selling price edged up 4% to £213,262, it said in a statement.
READ: Persimmon lauds "excellent" first half trading, with housing market having taken snap UK election in its stride
The company secured 9,319 plots of land during the period, bringing its land bank to 98,712 plots.
Return on average capital employed increased by 33% to 47.3% and underlying earnings per share grew 30% to 121.2p.
Net free cash generation came to £284.5mln, compared to £229.9mln last year.
The group ended the period with net cash of £1.1bn, up from £452mln, before returning £339.5mln of capital surplus to shareholders in July.
Demand buoyed by low interest rates and supply shortage
READ: Persimmon says its "operational performance continues to be excellent” helped by a resilient UK economy
Low borrowing costs and government schemes, coupled with supply shortage of homes, has continued to support housing demand. However, house price growth has slowed since the UK voted to leave the European Union and the government hiked stamp duty on purchases of second homes and buy-to-let properties last year.
The snap general election in June added to the political uncertainty but Persimmon said customers were supported by healthy employment levels and a competitive mortgage market.
“Whilst we remain vigilant to changes in market conditions we also recognise we are in a strong position to take advantage of opportunities that arise,” said Persimmon’s chief executive, Jeff Fairburn.
“We are looking forward to a good autumn sales season."
Plans for second half
Turning to the second half, the group has so far opened 22 new outlets for sales while 42 existing outlets have been sold.
Persimmon plans to open a further 80 new outlets this year, including 25 outlets already moving forward to be ready for sales release in early September.
The company said it will be engaging with the government on its Housing White Paper consultation process over the coming months, particularly regarding planning improvements.