MARKET REPORT: Green shoots of recovery boost Persimmon shares

Shares in Persimmon rose after it pointed towards green shoots of recovery in the housing market following a sharp slowdown.

The FTSE 100 firm, which is one of the country’s largest builders, said the rate at which it was selling homes improved during the first three months of the year.

If this continues, it will build nearly 9,000 homes in 2023 – towards the higher end of the 8,000 to 9,000 range it forecast last month.

However, it would be a far cry from the 14,868 built in 2022 with sales rates well below the levels of a year ago and cancellations up.

Over the first quarter, sales of new homes were down 42 per cent on a year earlier, at 1,136, as rising interest rates and concerns about the economy hit demand.

Persimmon, which is one of the country’s largest builders, said the rate at it which it was selling homes improved during the first three months of the year

The shares rose 4.9 per cent, or 60.5p, to 1296.5p even though it said sales to first-time buyers remained ‘challenging’ due to stretched affordability and reduced mortgage availability. 

Boss Dean Finch said: ‘Trading over recent weeks has offered some signs of encouragement with visitor numbers up, cancellation levels normalising and sales rates continuing the steady improvement evident since the start of the year.’

The update lifted the sector, which took a hit from the turmoil caused by the mini-Budget in September last year.

Taylor Wimpey rose 3.7 per cent, or 4.5p, to 125.6p while Barratt Developments added 3 per cent, or 14.3p, to 495p and Berkeley Group increased 1 per cent, or 44p, to 4396p.

Among the mid-caps, Crest Nicholson gained 7 per cent, or 17.6p, to 270p, Redrow rose 4.2 per cent, or 20.7p, to 512.5p, Bellway was up 3.8 per cent, or 88p, to 2400p and Vistry added 3.3 per cent, or 25p, to 778p.

The FTSE 100 was down 0.49 per cent, or 38.49 points, to 7852.64 and the FTSE 250 was 0.04 per cent, or 7.42 points lower, at 19,207.97. 

Carnival sank 3.3 per cent, or 22p, to 636.4p after Morgan Stanley cut the cruise firm’s target price to 570p from 600p.

Stock Watch – Trifast

Trifast said profits have come in higher than expected – but still lower than previously hoped.

The company, which makes screws, nuts and bolts, said in February that its profits for the year to the end of March would be around £9million – far below the £14.3million expected by analysts.

But it now expects profit to be ‘marginally ahead’ of £9million and will also propose an increased final dividend of 1.5p. 

Shares rose 12.5 per cent, or 7.8p, to 70.4p.

Man Group made gains after clients poured £880million of funds into the investment manager in the first quarter of 2023. 

Its assets under management rose 1 per cent to £115.7billion. The stock climbed 3.2 per cent, or 7p, to 224p. Smith & Nephew, the global medical tech firm, cashed in on demand for hip and knee implants.

Its orthopaedics arm, which had lagged behind the other divisions, reported a 3.9 per cent rise in revenue to £438million for three months to April 1. Group sales rose 6.9 per cent to £1.11billion. Shares climbed by 1.6 per cent, or 20.5p, to 1294.5p.

It was a good day for Standard Chartered after the London-listed bank delivered its biggest quarterly profit since 2014 – £1.44billion, beating market expectations of £1.12billion. Shares rose 2.2 per cent, or 13.4p, to 634p.

CRH, which makes around three-quarters of its profit in North America, will press on with moving its listing from London to New York by seeking shareholder approval in a meeting on June 8.

The building materials giant said its first-half sales and profit should be ahead of the same period in 2022. Shares sank 3.3 per cent, or 132p, to 3890p.

Bunzl, which supplies products such as paper napkins and latex gloves, said that acquisitions should help it deliver slightly higher revenues this year.

Sales rose 1.2 per cent in the first quarter and has agreed to buy Dimasa, which distributes cleaning and hygiene products in Spain. It fell 1.6 per cent, or 51p, to 3151p.

At Fresnillo – up 0.2 per cent, or 1.6p, to 734.6p – the Mexican miner reported higher silver and gold production during the first three months of the year following increased output.