Persimmon (LSE: PSN) released a positive trading update this morning ahead of its half-time results, as the housebuilding sector continues to pick up pace in 2013.
Today’s update brought us news that total revenues increased 12% year on year, to around £900m, while the average selling price grew about 5% on last year, to around £179,200.
Management’s strategy of improving margins between 15-17% by the end of 2014 is currently ahead of its target, with the underlying operating margin for the first half expected to hit around 15% already. It’s also on track with its plans for new sites, with 90 opened in the last six months, and another 85 expected for the second half.
5,022 new homes were built in the period, a 7% increase on H1 2012, with site visitors up 13% and cancellations remaining “at historically low levels of 16% (2012: 18%)”.
The last 18 months have seen the share price recover in line with homeowners and first-time buyers benefiting from the government’s Help To Buy scheme; with Persimmon ending 2012 on a five-year high of 820p, the shares reached a peak of 1,280p this year, only falling back in recent weeks as the whole FTSE wobbled during its ‘rerating’. They’ve since corrected themselves and currently sit around a healthy 1,240p.
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> Sam does not own shares in Persimmon.
