PERSIMMON (PSN) – Construction
| Price: £12.70 +3.1% | P/E: 16x |
| Market Cap: £4.1bn | Yield: 4.9% |
Persimmon has managed to do what few other housebuilders have done and buck the trend of doom and gloom which has pervaded the sector all year.
The firm’s third-quarter trading update, covering the period from 1 July to today, revealed a 15% increase in forward sales to £2.79 billion from £2.42 billion for the same period a year ago.
Private forward sales, which excludes ‘bulk sales’ to housing associations and buy-to-let groups, also rose 15% to £2.09 billion, with just a small increase in average selling prices, and over 80% of private sales have already exchanged or completed.
The firm said it was on track to hit around 11,300 completions this year and underlying pre-tax profit would be in line with consensus at around £430 million.
Our View
We aren’t generally fans of the housebuilders, but the mood music from Persimmon is a lot sweeter than that from its higher-volume rivals like BARRATT REDROW (BTRW) and TAYLOR WIMPEY (TW.).
Today’s bounce is a positive sign and reinforces the uptrend which has been in place since early September, but with the Budget still to come later this month we think it’s probably too early to take anything more than a short-term punt.
Read the press release here: https://www.persimmonhomes.com/corporate/investors/
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