Persimmon Prepares For Seasonally Strong Autumn Season

6th Jul 2010 07:09

By Anita Likus Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Persimmon PLC (PSN.LN), the U.K.'s largest house builder by market capitalization, Tuesday said it will open up new sites to prepare for the normally stronger housing market in the autumn, despite remaining cautious. It added, however, that it remains cautious about its investment decisions until mortgage availability improves further. U.K. house builders have just been through one of the worst downturns in decades, with tight mortgage financing pushing sales lower and reducing house prices. Just as the market started recovering, house builders had to endure a period of uncertainty due to the general election, which drove sales lower. Persimmon said that, while sales prices and margins have increased since the start of the year, it has experienced a slowdown in sales reservations since early May. But since the U.K. government set out its budget proposals, sales have been in line with internal expectations and cancellations remain at about 16%. Completions for the six months to June 30 rose by over 16% to 4,657 homes while the average selling price rose 8% to GBP168,500 with underlying price growth of about 3% since Jan. 1. It reported turnover for the period up by some 26% at GBP785 million and expects first-half margins, before exceptional items, to have increased to 7.5% from 1.5% in the same period last year. Persimmon shares closed Monday at 348 pence giving the company a market capitalization of GBP1.05 billion. The company will announce its first-half results on Aug. 24. -By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; [email protected] (END) Dow Jones Newswires July 06, 2010 02:09 ET (06:09 GMT)