Persimmon encouraged by improvement

7th Jul 2009 07:18

Housebuilder Persimmon said it has seen both volume and revenues improve recently and expects that trend to continue against the weak conditions experienced throughout the second half of 2008. The group also said unless there is a substantial change in current market conditions, it does not expect to make any further land writedowns. Persimmon said although house price have reduced, prices are now stabilising in some locations. Further indications of an improved housing market are evidenced by the historically low level of cancellations of around 16%, it said."We are encouraged by the improvement in sales rates when compared to last year, but will remain cautious until mortgage availability improves further and employment prospects stabilise," said the group.During the six months ended 30 June 2009 it legally completed 4,006 homes with total sales revenue of £625m (June 2008: £998m). Forward sales revenue into the second half of 2009 is c. £700m, against forward sales revenue of c. £458m at January 2009 and £650m the same time last year.The group said it does not need to acquire more land to sustain its business, though it is identifying small number of opportunities where it will be able to agree terms to purchase new land on favourable terms. Borrowings at 30 June 2009 were lower than originally anticipated at around £495m (June 2008: £906m), representing a gearing level of around 32%.