Politics

Persimmon to re-evaluate final dividend as forward sales rise ahead of last year

Persimmon PLC (LON:PSN) has said it will re-evaluate the payment of a final dividend for the year to December 31 2020, during the second half.

The housebuilder said in an update that it is “encouraged” by the level of customer reservations in the period since sales offices reopened in mid-May, with website enquiries and sales office appointments continuing at “healthy levels”.

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As of June 30, 2020, the group noted that forward sales of new homes were 15% ahead of last year at £1.86bn, with 5,150 new homes placed privately at an average price of £242,400 and another 4,950 sold to the groups housing association partners at an average price of £123,280.

In the first half, total revenues tumbled 32% to £1.1bn due to the impact of the coronavirus pandemic.

At period-end, the FTSE 100-listed group had £830mln of cash plus deferred land commitments of £120mln to be paid by end-December. It also had an undrawn revolving credit facility of £300mln.

Persimmon said it did not make use of the governments furlough scheme and has no plans to access state funding.

“Our build programmes had returned to normal levels by period end, and we have seen encouraging sales levels throughout the period, in particular, over the last six weeks when net reservations have been c. 30% ahead year on year,” the housebuilder's chief executive Dave Jenkinson said in the trading statement.

A strong 'buy'

Richard Hunter, head of markets at interactive investor, noted more challenges lie ahead as the coronavirus crisis alongside Brexit could dampen the propensity of consumers to move or buy a new house, while the potential withdrawal of the Help to Buy scheme also threatens future revenues.

However, the stamp duty holiday on properties up to £500,000 announced on Tuesday could brighten prospects as the maRead More – Source