Persimmon (LSE: PSN) — the housebuilding group behind Persimmon Homes, Charles Church and Westbury Partnerships — released a trading update this morning, ahead of its final results for the year to 31 December 2013, which are due to be published on 25 February 2014. Persimmon’s share price was up over 3% in early trading, but has since fallen back, and is currently up 1.3%.
The company reports that it had a strong finish to 2013, substantially increasing its construction activity across the country in response to a “significant increase” in weekly sales rates. The volume of new house sales delivered during 2013 was 11,528, which is 16% ahead of the previous year. The company also says that it legally completed 6,506 new homes in the second half of 2013, an increase of 30% over the first half of the year, and that second-half sales volumes were 25% ahead of the prior year.
Full-year revenues rose 21% over the prior year, to £2.1bn. Average selling price put on 4% over 2012, rising to around £181,000. The increase is attributed to a change in the sales mix of “traditional family housing” across the UK, year on year.
Persimmon says that the growth in revenues, together with an anticipated further improvement in operating margins, will allow it to deliver strong underlying pre-tax profit growth when it publishes its final results next month.
The company said that, in line with previous expectations, it had opened the 85 sites that had been identified for the second six months of 2013. As a result, Persimmon starts the new year with 390 active sites across the UK, and it anticipates opening a further 90 new sites in the first half of 2014.
Despite what it describes as “strong investment in land and work in progress through the second half”, the company says that its cash holdings have continued to strengthen, with cash balances of just over £200m held at the end of 2013.
At 1,311p Persimmon’s share price is up 55% on this time last year, trouncing the FTSE 100’s 11.3% gain since then. The picture over five years is even more impressive, with Persimmon’s share price soaring by 416%, compared to just 48% for the FTSE 100.
