Hopes build at Persimmon after Covid-19 dive in activity

● First-half sees 35% fall in number of homes built ● But group points to strong rebound by the end of June

Housebuilder Persimmon yesterday revealed that the impact from the Covid-19 pandemic has seen the number of homes it built in the first half of the year fall 35 per cent to 4,900 compared with a year earlier.

With building sites shut and managers scrambling to implement physical distancing measures, homes could not be completed and pre-tax profits plunged 43 per cent.

But the company said the liftingofrestrictionsandresumption of construction means building levels returned to pre-covid levels by the end of June and its strong balance sheet meant staff were paid in full during lockdown.

Chief executive Dave Jenkinson said the performance was enough for the board to agree to a 40p-per-share dividend being paid out.

He added: “Taking an early decision not to take advantage of the furlough scheme for any colleagues, we maintained good momentum in the business, continuing to serve our customers, making detailed preparations for a safe return to work and, when it was appropriate, restarting our build programmes efficiently.”

Sales of private homes since the start of July have jumped 49 per cent year-on-year, with a current forward order book of £2.5 billion – up 21 per cent on last year. Jenkinson explained: “Our strong opening work in progress position and excellent build rate through the summer give us confidence in a positive second half out-turn.

“We expect that by the end of September, we will have delivered [circa] 45 per cent of our anticipated second half new home legal completions.”

Estate agents and lenders have reported a surge in interest in households looking to move – particularly with greater space as city dwellers in particular look at moves to greener spaces with offices mainly closed.

Revenues for the six months to the end of June totalled £1.19 billion, down from £1.76bn a year earlier.

Gross margins on new housing fell from 33.8 per cent to 31.3 per cent and pre-tax profits dived from £509.3 million to £292.4m.

Richard Hunter, head of markets at Interactive Investor, noted: “This year is increasingly looking to be a game of two halves for Persimmon, with the outlook rather brighter than the pandemichit first few months.

“Events outside of its control could yet derail Persimmon’s fledgling recovery. A second wave of Covid-19 could potentially provide an unwelcome echo of previous months, while the recessionary environment in the UK may deter house buyers from entering the market at the current time.

“Equally, the end of the furlough scheme could add to the consumer caution in spending generally.”