Persimmon retains annual build target on improved Q1 sales rate

LONDON (Reuters): British housebuilder Persimmon Plc said on Wednesday it expects to build homes at the top end of its annual guidance range, as an improved quarterly sales rate partly allayed concerns that a sector slowdown could slip into the next year.

After a marked slowdown in the final quarter of last year, the British housing market has shown signs of recovery in 2023, buoyed partly by an improvement in fixed mortgage rates into the traditionally strong spring selling season.

“Trading over recent weeks has offered some signs of encouragement, with visitor numbers up, cancellation levels normalising, and sales rates continuing the steady improvement evident since the start of the year,” CEO Dean Finch said.

Persimmon said its year-to-date forward sales — a key measure which gauges near-term demand — stood 30% below year-on-year at 1.7 billion pounds ($2.11 billion).

The housebuilder added that build cost inflation continued to track at around 8%-9%, with limited signs of easing in the short-term.

The FTSE 100 company’s net private sales per outlet improved to 0.62 units in the first quarter, compared with 0.30 in fourth quarter of 2022 and 0.98 in the year-ago period.

Persimmon had last month flagged that Britain’s slowing housing market would hit annual profits and slashed dividend by 75% as it forecast annual home completions in the range of 8,000-9,000 units.