Housebuilder points to signs of stabilisation as it writes back 拢27.9m on the value of its landbank
Pre-tax profit at Persimmon has fallen 74% from 拢36.9m to 拢9.8m, despite a write back of 拢27.9m on the value of its assets.
The write back indicates the company was too conservative with land writedowns earlier this year.
Reporting its results for the six months to 30 June, the housebuilder said turnover had fallen 39% from 拢998.4m to 拢611.8m, although it pointed to signs of stabilisation in the market.
Chairman John White said: 鈥淲e expect sales rates to remain resilient due to the successful destocking that has occurred in the industry combined with the continuing good levels of underlying demand for new homes in the UK.
鈥淩ecently, selling prices have stabilised in most parts of mainland UK. Future volume increases and price movements will be dependent upon mortgage availability, job prospects and the health of the general economy.鈥�
The company has reduced debt from 拢906m a year ago to 拢484.2m, and chief executive Mike Farley said it would fall to below 拢400m by the end of the year.
He said it made the prospect of a rights issue at the company less likely. 鈥淲ith debt of 拢400m on a 拢1bn facility, we have the headroom to be able to go into the market.鈥�
Asked whether there were many opportunities to buy land at the moment, Farley said: 鈥淭here is not a huge amount out there, no.鈥�
Legal completions were 4,006, compared with 5,501 last year, while the average selling price fell 14% from 拢181,485 to 拢155,524.
Some analysts said the 拢9.8m reported profit was small but Farley said cash generation was the key. He said: 鈥淩e-growing profitability is something we'll do in the longer term.鈥�
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