Persimmon in strong position for 2010

2nd Mar 2010 07:03

Persimmon completed 8,976 house sales last year and the housebuilder has seen a 7% increase in sales and steady prices since the start of this year.The number of legal completions was down 12% on the 10,202 achieved in 2008, but in line with the figure flagged in an update in January. The average selling price dropped to £160,513 from £172,994.There was a pre-tax profit of £7m before exceptional items and goodwill charges, reflecting a stronger second half when profits jumped to £23.7m from a £16.7m loss the year before.Including a £74.8m one-off credit due to a review of the net realisable value of the firm's assets, profit before tax came in at £77.8m versus a £780m loss in 2008. Sales for the year fell to £1.42bn from £1.76bn.Net assets per share increased to 540.2p, slightly better than the 535p predicted by analysts at Panmure Gordon.The company reports strong forward sales of £897.9m from 5,873 units, of which 51% of sales are contracted, and plans to begin work on 90 new sites in the first half of 2010. It's currently operating from 370 developments compared to 420 last year.Cancellation rates appear to have stabilised at about 16%, below the long term average of 20%, indicating stronger consumer confidence, said Persimmon, while the number of visitors to sites has risen and web site traffic is on the up following recent marketing campaigns."Our cash generation and cost control have placed the business in a strong position both operationally and financially for a recovering market," said chairman John White. "Prices have held firm since the beginning of the year and we remain focused on improving our operating margins and to profitably grow the business."