Persimmon has enjoyed a 27% increase in revenue for the six month period to 30 June 2010, boosted by an increase in average selling price of 8.6%.
Turnover was £776.6m (H1 2009: £611.8m), while pre-tax profit for the period increased tenfold to £101.4m (H1 2009: £9.8m).
New home legal completions increased by 16% to 4,657 homes (H1 2009: 4,006 homes) at an average selling price of £168,936 (H1 2009: £155,524).
Underlying operating margin increased to 8% (H1 2009: 1.6%).
The strong perforrmance during the first half of the year generated £185.6m of cash and reduced Persimmon's total net borrowings at 30 June 2010 to £122.1m (2009: £494.2m).
The house builder's current order book, including legal completions since 1 July 2010, is £912m (31 December 2009: £638m). The firm said it is 95% “sold up” for 2010 with a further 1,700 homes already reserved to carry forward into 2011.
Persimmon has successfully reduced its build costs over the past two years, which are now 14% less than their peak.
Its landbank, at 30 June 2010, consisted of a total of 58,957 plots. It added 4,263 plots during the period for mainly traditional housing, with over 50% in southern markets. The house builder also has a further 3,663 plots on which it has agreed terms.
In addition, Persimmon has recently entered into a joint venture with St Modwen to develop 2,000 plots over the next few years.
To support its growth, the firm plans to open 75 new sites over the next few months to “maintain the strength of our outlet network”, of which over 50% will be in the south of England.
Chairman John White summarised the outlook: “We expect annual volume growth of new home sales to continue to be steady in line with any general improvement in the economy.
“The availability of mortgage credit continues to be constrained. Mortgage lenders remain cautious in their risk appetite but are increasingly supportive of new home purchasers.
“The clarification of the details of the Coalition Government's spending plans to be announced in October will create greater certainty which may help to improve sentiment further within the UK housing market.
“Overall, whilst we currently remain cautious, we are optimistic about the future of our business. We have a strong balance sheet, excellent cash generation, national coverage and an experienced management team.
“Our long landbank has excellent planning consents and we continue to secure a high quality supply of new development opportunities, which will underpin growth in profitability in the future.”
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