SHARE OF THE WEEK: Housing market has much on its plate so Persimmon hopes it can find some optimism in latest City update
From righting the wrongs of cladding costs to rising interest rates and helping first-time home buyers get on to the property ladder, the housing market has much on its plate.
But Persimmon will hope it can find solutions – and optimism – when it updates the City on its half-year results on Wednesday.
The blue-chip housebuilder reported a fall in completions and revenues in the first half of the year. Last month it said that the slowdown in building was a result of planning delays and shortages among staff and materials.
Completions fell 10 per cent year-on-year to 6,652 while revenues sank 8 per cent to £1.7billion, offset by average selling prices rising 4 per cent to £245,600.
But the shares have fallen more than 40 per cent since early 2020.
Questions remain over how Persimmon has dealt with rising build costs, exacerbated by geopolitical and economic woes, alongside sagging consumer confidence, the stamp duty tax break ending and the winding down of Help to Buy.
But analysts have forecast sales to rise 11 per cent to £3.8billion for the year to the end of December. And profit is expected to climb 6 per cent to top £1billion.
Whether it makes further cladding commitments remains to be seen.
In April Persimmon signed up to the Government’s developer pledge to cover remediation for cladding in buildings over 11 metres tall.
It has set aside £75m but this was among one of the lowest figures, according to AJ Bell analyst Danni Hewson.