Shares in Persimmon PLC (LSE:PSN) dropped over 5% after the housebuilder announced a fall in completions in the first half, as planning delays and supply chain problems took their toll.
Despite the challenging conditions, it forecast half-year profits slightly ahead of expectations.
The group delivered 6,652 new homes in the first six months to 30 June 2022, down from 7,406 completions in the same period last year, due to “further delays in the planning system and material and labour shortages”.
Total revenues fell to £1.69bn from £1.84bn, with housing revenues down to £1.63bn from £1.75bn, Persimmon said in a trading update.
The average selling price increased by 4% year-on-year to £245,600, reflecting strong demand and a reduction in the proportion of homes sold to housing association partners.
Looking ahead, the housebuilder said rising energy prices, materials shortages and increased labour costs are driving build costs higher, although house price inflation is offsetting these rises at the moment.
“As a result, we expect to deliver a housing gross margin that is slightly ahead year on year, although, the lower number of completions will result in a slight fall in operating margin reflecting the reduced efficiency of the group's overhead recovery rates,” it said.
“Despite this, we anticipate the group's profit at the half year to be modestly above our expectations.”
Shares were down 5.47% at 1,763.05p in midmorning trade.