Persimmon (PSN) has come in for some criticism recently over its involvement in the government's 'Help to Buy' scheme and its executive share awards. However, the housebuilder put in another robust performance during 2018. The return on average capital employed in the year to December 2018 rose to 52.8 per cent, while average selling prices and completions were ahead slightly.
Annual operating margins grew from 28.2 per cent to 30.8 per cent, hitting 31.8 per cent in the second half of the year. Persimmon’s average selling price remains at the lower end of the housing ladder at £215,563. This is especially relevant because more than half of its customers are first-time buyers, of which nearly half use the 'Help to Buy' scheme. And despite all the uncertainties thrown up by Brexit, the forward sales position was little changed from a year earlier at £2.02bn.
Against completions of 16,449, a total of 17,092 plots of land were added to the land bank, with a further 3,772 plots converted from the strategic land bank. Average selling price inflation on private houses of 2 per cent was enough to cover the rise in input cost inflation.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to December 2019 of £1.08bn and EPS of 274.4p, from £1.09bn and 283p in 2018.
PERSIMMON (PSN) | ||||
ORD PRICE: | 2,451p | MARKET VALUE: | £7.36bn | |
TOUCH: | 2,449-2,452p | 12-MONTH HIGH: | 2,913p | LOW: 1,826p |
DIVIDEND YIELD: | 9.6% | PE RATIO: | 9 | |
NET ASSET VALUE: | 1,006p | NET CASH | £1.05bn |
Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
2014 | 2.60 | 0.47 | 122 | 95 |
2015 | 2.90 | 0.63 | 170 | 110 |
2016 | 3.14 | 0.78 | 203 | 110* |
2017 | 3.60 | 0.97 | 255 | 235 |
2018 | 3.74 | 1.09 | 283 | 235 |
% change | +4 | +13 | +11 | - |
Ex-div: | 13 Jun | |||
Payment: | 02 Jul | |||
*Not including additional dividend of 25p a share |