Persimmon profits jump on strong housing demand
Housebuilder's pre-tax profit rose to £330m from £222m in 2012
Tuesday 25 February 2014
Shareholders in Persimmon will get an early payday as a booming market prompted the housebuilder to speed up its plans to return £1.9 billion to investors today.
A 49 per cent rise in pre-tax profit last year to £330 million — at the top end of City hopes — and more than £200 million in cash sitting on the balance sheet will trigger faster payouts under the cash return scheme first unveiled two years ago.
The initial scheme was for payouts every two years between 2013 and 2020, with a final payment of 115p in 2021. But the company now plans to pay out 70p in July — bringing forward part of the 2021 payment — as well as increasing payments in 2016 and 2018.
Britain’s largest housebuilder by market value has been one of the biggest beneficiaries of government schemes to free up the mortgage market, which have stoked buyer demand and sales.
Persimmon expects to receive a further boost this year when the Help to Buy scheme launches in Scotland and Wales.
Persimmon sold 11,528 homes over the year — 16 per cent more than it sold last year — while chief executive Jeff Fairburn is aiming for similar growth this year. The first eight weeks of the year have been “encouraging” with forward sales of £1.42 billion up 41 per cent on a year ago.
Bank of America Merrill Lynch analyst Andy Murphy said: “The current trading environment and outlook are considerably better than they were when Persimmon put its capital return plans and we remain bullish.”
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