Persimmon Plc, Britain's biggest house-builder by market value, said it was on course to meet market expectations of record annual profits as its chief executive predicted new house prices would rise next year. The market had been looking to Persimmon for direction after retirement flats builder McCarthy & Stone and house-builder Wilson Bowden last week warned of challenging times ahead.
"We're expecting some house price growth next year, unlike some," Chief Executive John White told Reuters in an interview after the group issued a trading update ahead of its year-end on December 31. "We see an increase of between 2 percent and 4 percent in new house prices across the country," he added.
He said the group would meet consensus forecasts of pre-tax profits of 467 million pounds ($910 million), up 33 percent on last year's record figure. And he reiterated a pledge when he delivered the first half results in August that the full-year dividend would be at least 25 percent higher than last year's at 23p per share.
Shares in the group, which have outperformed the sector by 6 percent this year, were up 2.3 percent by 0900 GMT, valuing the company at just over 2 billion pounds. Shares in other building firms were broadly higher. Persimmon said it had increased volumes by 1.9 percent to 12,400 units at an average selling price of 172,000 pounds, up 11 percent on last year.
Analysts at Bridgewell Securities noted that completions were slightly below their expectations, but they maintained a neutral rating.
Shares in British house-builders have been under pressure in recent months, with second-hand house prices cooling after a series of interest rate rises.
But most are keen to stress that the fundamentals - chronic under-supply of housing, a robust economy, low interest rates and low unemployment - remain solid.
"Persimmon remains very well placed in this current trading environment, with our broad geographical spread enabling us to offer homes across a wide price-range, while having limited exposure to the buy-to-let and large inner city apartment markets," it said.
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