Persimmon earnings up 61% in first half

19th Aug 2014 08:00

- Revenue up 33%, underlying PBT up 57%- Homes sales up 28%, average prices up 4.3%- EPS up 61%Profits rose 57% in the first half of the year at housebuilder Persimmon, which said trading in the early weeks of the second half remained ahead of tough comparative numbers from the prior year.The FTSE 100 builder took advantage of the booming housing market and sold 28% more new homes at prices 4.3% higher than the same period last year, also strengthening its land bank by acquiring 10,549 new plots in the open market across 68 sites in the period. With market conditions supporting both improved prices and sales rates, and April's new government Help to Buy shared equity scheme lifting private sales rate 17%, total revenues increased 33% to £1.2bn.Management's focus on reducing build cost pressures and improving supply chain efficiencies led to expansion of underlying operating margin to 17.7%, from 15.1%, helping underlying profit before tax, exceptional items and goodwill impairments increase 57% to £212.9m and feeding through to a 61% increase in basic earnings per share of 54.8p.Chief executive Jeff Fairburn said he was encouraged by trading as the group entered the second half, with the traditionally slower summer trading weeks since 1 July seeing private sale reservations running 9% ahead of the same period last year. "These results demonstrate the ability of the group to successfully execute its operational objectives to deliver the ten year strategic plan launched in 2012," he said. "We remain confident of Persimmon's continued successful development."During the half, the open market for land offered "attractive investment opportunities that will produce excellent returns in the future" and by the period end the consented land bank had 82,250 plots of land owned and under control by the end of June, up 16% from the year before.Within this land bank, 43% of these plots were previously held as strategic land, which will support future margins.Forward sales of £1.53bn is 22% ahead of the same point last year, with over 5,500 new homes sold forward into the private sale market at an average selling price of £206,700, a 3.2% increase.OH