Persimmon expects profits for 2010 to reach the top end of market expectations, after posting a solid performance in tough trading conditions that saw the UK's largest housebuilder by market capitalisation build 9,384 homes, up nearly 5 per cent from 2009. What's more, average selling prices rose by 6 per cent to £167,000, due in part to a change in the product mix away from apartments and towards family homes, and net margins have improved strongly to 8 per cent.
Persimmon has used the improved cash flow to pay down debt, which has now fallen from a peak of £1.1bn in April 2008 to just £51m. The group also added more than 5,000 plots to its land bank, which now stands at 59,000 or 6.3 years of output.
Sales towards the end of the year were hit by the bad weather, and while chief executive Mike Farley warned against getting carried away, like-for-like sales in the first week of the new year were up 10 per cent on the previous year.
When: 01/10/10
Price: 398p
Tip performance to date: +11%
