Persimmon shares up after strong 2018 results

Shares in housebuilder Persimmon (LON:PSN) rose by 4.13% to 2,449.16p (as of 12:00 GMT) after its revenues for the year ended 31st December grew by 4% due to both volumes and average selling prices being higher than in the previous year. Operating margins also improved by 260 basis points, which contributed to profits before tax climbing by 13% to £1.09 billion.

Chief executive David Jenkinson commented: “Our results for 2018 reflect our successful focus on offering attractively priced new homes primarily to the first time buyer and first time mover markets, where housing need is greatest. This strategy has enabled Persimmon to grow its construction volumes by more than 75% since 2012, making a significant contribution to UK housing supply. My focus is to build on this strong platform, maintaining our operational momentum, but also implementing a number of necessary new initiatives in customer care. A wide range of projects to improve customer satisfaction commenced in late 2018 and the initial results have been encouraging, giving us confidence in our ability to make progress in this important area. We continue to invest in our teams, systems, and our off-site manufacturing capabilities to support the Group’s further growth.”

“We are also taking action to address the shortage of skills in the industry, with almost 15% of our workforce in structured training programmes across the business. We continue to nurture and develop our best talent and I am delighted that over 570 colleagues were promoted during the last two years recognising their success in developing their careers with Persimmon. The Group is proud to support over 20,000 construction jobs and over 30,000 jobs in our supply chain.”

“Whilst the sales outlook remains subject to a degree of uncertainty at the start of any financial year, at this point the Group’s sales are in line with management’s expectations. Given our strong prior year comparatives, the current increased uncertainties with respect to the future performance of the UK economy and the planned later sales releases in the early part of the year, we are encouraged by the levels of customer interest across the UK. Including legal completions taken so far in 2019, the Group has a strong forward sales position at £2.02bn and we currently anticipate delivering a similar level of legal completions during 2019 as in the prior year“.