Source: Sharecast
The company said pre-tax profit for the year to December plunged to £351.8m, missing estimates of £359.5m.
"Enhanced competition in the mortgage market and wage growth have contributed to improved affordability albeit it continues to be constrained, particularly for first time buyers, and demand for homes remains varied across the country," the company said on Tuesday.
Weekly net private sales rate per outlet stood at 0.59 units in the first 10 weeks of 2024, compared with 0.54 homes a year ago. It expected to build 10,000 - 10,500 units this year, up from 9,922 a year ago.
“Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged. Customers want quality homes in the places where they want to live and work, and affordability is crucial,” Persimmon chief executive Dean Finch said.
“Trading in the southern and eastern counties remains more challenging with weaker pricing, offset by a more robust trading performance in the northern regions.”
Despite a 3% rise in average prices to £255,752, a lower forward order book and fall in home completions saw total turnover plunge 27% to £2.77bn. Build cost inflation came in at around 8 - 9%.
“Persimmon’s full-year results for 2023 offer no additional bad news and the guidance for 2024 even offers a glimmer of hope, as chief executive Dean Finch points toward a modest increase in completions, but the share price is not taking much notice,” said AJ Bell investment director Russ Mould.
“This may be due to uncertainty over when the Bank of England will get around to cutting interest rates in 2024 and the weak trajectory of the UK economy, but another reason may be valuation, as the shares do not look particularly cheap when set against the benchmark provided by Barratt’s all-stock offer for Redrow.
Reporting by Frank Prenesti for Sharecast.com
