Join our community of smart investors

Encouraging start for Persimmon

Persimmon kicks off the new year in style, with sales and customer enquiries both up on last year.
April 20, 2015

Pre-election jitters might have taken the shine off shares in the major UK house builders, but Persimmon (PSN) revealed in a trading update that business so far this year shows little sign of slowing.

IC TIP: Buy at 1,745p

In the first 15 weeks of the new year, legal completions were up 7 per cent from a year earlier, while the weekly private sales rate per site rose 6 per cent. Encouragingly, average selling prices were higher, but at a more sustainable 4 per cent. This will be enough to cover any increased input costs as a result of labour shortages and higher raw materials costs.

Customers visiting sales sites remained much in line with the previous year, although on-line enquiries to the group's home-finder websites were up by 20 per cent. A total of 85 of the 120 new sites planned for the first half of this year are already open, and, looking further ahead, development continues on a further 385 sites. Land-price inflation remains benign, and the only blot on trading at the moment is the inevitable freeze in the planning process ahead of the general election; something that is expected to unwind after the election.