Persimmon Reports Sales Decline in Second Half of the Year

Overview

Home builder Persimmon has announced a decrease in sales for the first four months of the second half of the year. While the company expects to meet its 2023 targets, it anticipates uncertain market conditions in 2024.

Sales Performance

Persimmon reported that legal completions between July 1 and November 6 dropped to 1,439 from 2,270 compared to the previous year, which was in line with its expected performance. Average private sales per outlet decreased from 0.63 to 0.48 during this period. However, there has been a positive trend in the past five weeks, with this figure improving to 0.59 since the beginning of October. Current forward sales are valued at approximately £1.62 billion, compared to £2.09 billion in the previous year.

Full-Year Guidance

The company maintains its full-year guidance and aims to deliver around 9,500 homes, exceeding the previous target of at least 9,000 new-home legal completions in 2023. This is lower than the 14,868 completions achieved in 2022. The operating profit is expected to meet expectations and maintain a similar margin to the first half, although specific figures were not provided. In 2022, operating profit reached £724.9 million.

Future Outlook

While Persimmon anticipates highly uncertain market conditions in 2024, it remains confident in its positioning and believes that long-term market fundamentals remain positive.