Persimmon PLC Trading Statement (8289V)
November 08 2017 - 1:00AM
UK Regulatory
TIDMPSN
RNS Number : 8289V
Persimmon PLC
08 November 2017
THIRD QUARTER TRADING STATEMENT
WEDNESDAY 8 NOVEMBER 2017
Persimmon plc today releases its third quarter Trading Statement
which covers the period from 1 July 2017 to 7 November 2017.
Customer activity has strengthened in line with traditional
seasonality as we have moved from the quieter summer weeks into the
autumn period. Consumer confidence is resilient and mortgage
lenders remain keen to compete for new business, with mortgage
approvals for the third quarter being c. 8% ahead of last year.
Mortgage interest rates remain very attractive, particularly for
first time buyers taking advantage of the Government's Help to Buy
scheme.
Enquiries received from customers, including website traffic,
have been running in line with the elevated levels of last year
despite the Group's total sales outlet numbers being c.10% lower
over the autumn period to date. The level of visitor traffic to our
sites has remained healthy. The Group's total sales rate per site
in the period since we reported our half year results has been in
line with the prior year, which was 14% ahead of 2015 due to
particularly strong sales post the 2016 EU Referendum. We are now
fully sold up for the current year and have c.GBP909 million of
forward sales reserved beyond 2017, an increase of 10% on the same
point last year (2016: GBP829 million). Pricing remains firm across
our regional markets.
We have continued to drive site construction activities forward
during the third quarter to ensure customers are able to move into
their new homes in line with their expectations. We are focused on
opening new sales outlets at the earliest opportunity to meet
market demand. The Group continues to encounter a tight market for
both key house building trade skills and some materials. The Group
is actively developing all sites where an implementable detailed
planning consent has been secured.
At this point in the cycle we remain focused on disciplined
investment in high quality new land to support the delivery of
superior returns and cash generation over the longer term. The
National Planning Policy Framework continues to task local
authorities with identifying more land to be released for
development. However, achieving detailed planning consent for the
land identified is proving as challenging as ever. We are keen to
work with all stakeholders taking part in the Government's Housing
White Paper consultations to establish more effective planning
processes which will allow the industry to increase the number of
active outlets and overall output of new homes built. The Group
opened 95 new sales outlets in the first half of the year and has
launched a further 61 through the second half to date. Management
has made good progress with construction on new sites and we
anticipate opening c. 45 additional sales outlets during the
remainder of the year. To support the Group's future growth we plan
to open a new regional operating business near Ipswich in Suffolk
on 2 January 2018, bringing the number of house building businesses
in the Group to thirty.
Management has continued to pursue new land opportunities on a
selective basis. The Group acquired a total of 5,526 new plots and
spent GBP147 million, including payment of deferred land creditors,
during the period. Of the new plots acquired, 48% have been
converted from our strategic land portfolio. We anticipate that the
Group will achieve strong strategic land conversion over the next
couple of years as local authorities complete their plans to
identify sufficient land to meet the assessed housing need in their
local communities. Management will marshal the Group's cash
resources to ensure these reinvestment requirements are adequately
supported.
Management remain focused on the cash efficiency of Group
operations with strong cash generation being central to the
execution of our long-term strategy. The Group is likely to hold
increased cash balances at 31 December 2017 subject to the timing
of further land investment (30 June 2017: GBP1,120.4 million).
We will give a further update on progress and trading following
the year end on Tuesday 9 January 2018.
Jeff Fairburn and Mike Killoran will host a conference call with
analysts at 9.00 a.m. today. To participate please dial +44 (0)33
3300 0804. The access pin is 72233806# and password is
"Persimmon".
Further information, please contact:
Persimmon plc Citigate Dewe Rogerson
Jeff Fairburn, Group Simon Rigby
Chief Executive
Mike Killoran, Group Kevin Smith
Finance Director
Tel: +44 (0)1904 642199 Tel: +44 (0)20 7638 9571
This information is provided by RNS
The company news service from the London Stock Exchange
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