Persimmon lifts building target as order book rises
By Frank Prenesti
Date: Tuesday 11 Mar 2025
(Sharecast News) - Persimmon has lifted its annual house building target in line with a large jump in its forward order book as changes to planning regulations provide "positive tailwinds".
The company on Tuesday said its net private sales rate per outlet per week was up 14% in the first nine weeks of 2025 with a current private forward order book of £1.15bn, 27% higher year on year.
Underlying pre-tax profit for 2024 was up 10% to £395.1m as completions rose 7% to 10,664. Persimmon, which owns brock, timber frame and tile factories, is now targeting 11,000-11,500 completions in 2025.
Last year, it delivered 1,589 new homes to housing associations, down from 2,241 the year before, at an average selling price of £161,916, up 6% year-on-year. The sector was hammered as interest rates rose to curb spiralling inflation after the Covid-19 pandemic,
Rates started to fall last summer from a peak of 5.25%, and are now at 4.5%, with further cuts expected from the Bank of England this year.
"The underlying market fundamentals remain strong and we are encouraged by the further improvement in our sales rates in the early weeks of this year," chief executive Dean Finch said on Tuesday.
"The government's welcome planning reforms and pro-housebuilding agenda demands more of the high-quality, affordable homes which are Persimmon's core strength, providing a positive tailwind." Prime Minister Keir Starmer has said he wants 1.5 million new homes built across Britain by the next election.
Average selling prices rose by 5% to £268,499. The company also took a one-off charge of £34.4m to pay for removing combustible cladding and other fire-related remediation work.
Richard Hunter, head of markets at interactive investor, said: "It is perhaps a little early to be calling a full recovery, but it is also fair to say that some of the previous headwinds are showing signs of turning into tailwinds.
"While affordability has been and could yet continue to be an issue, the recent interest rate cut clearly sparked the mortgage market into life, especially for first-time buyers where Persimmon has had a traditionally higher exposure."
"One area where there is certainly scope for improvement is a share price which has declined by 14% over the last year as compared to a gain of 12% for the wider FTSE100, and by 45% over the last three years."
"This has led to a lowly valuation by historical standards and there are signs that the sector could be due a rerating, which would be of particular benefit to the group and where the warm initial reaction to these numbers could be a precursor of things to come."
Reporting by Frank Prenesti for Sharecast.com
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