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Highlights
- The UK’s housing market has been booming due to rising demand, favourable interest rates, mortgage flexibility.
- Persimmon Plc has reported a jump in pre-tax profits by 23% to £966.8 million for the FY2021, up from £783.8 million in FY2020, as the company racked in a £66,000 profit per house.
FTSE 100-listed UK’s leading housebuilding company Persimmon Plc (LON: PSN) has grabbed the attention of investors as the company has announced strong final result for the year ended 31 December 2021 as the company delivered more homes, built better complexes, and strengthened its platform for future growth.
2021 result
Britain’s leading housebuilder Persimmon Plc has reported a jump in pre-tax profits by 23% to £966.8 million for the FY2021, up from £783.8 million in FY2020, as the company earned £66,000 profit per house. However, the housebuilder has cautioned that the Russia-Ukraine crisis could disrupt the UK economy in the year ahead.
The company’s revenue for FY2021 stood at £3.61 billion, up from 3.33 billion in FY2020. It has built 14,551 new homes, up from 13,575 homes in 2020, with an average selling price of £237,078 in 2021, which was £230,534 in 2020. The company reported that its current position of forward sales, which is a contract between house purchaser and builder with future purchase date was slightly decreased to £2.21 billion from £2.27 billion a year earlier and its net cash generation stood at £1,209.8 million, from £1,066.8 million in 2020, before net land spend of £447.7 million and capital return of £749.6 million in 2021.
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The company has revealed that it would not claim the UK Government’s Building Safety Fund and has set £75 million aside to fund any rectification work. It has also announced dividends payout of 125p (£398.7 million) and 110p (£350.9 million) per share, that are due to be paid on 26 March 2021 and 13 August 2021 respectively.
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Outlook
The UK’s housing market has been booming due to rising demand, favourable interest rates, mortgage flexibility. Persimmon is one of the first developers to agree voluntary undertakings with the CMA on leaseholders purchasing their freeholds. The company’s 2022 trading started well, with private sales rates ahead by around 2% in the opening weeks and a forward sales position of £2.21 billion.
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The housebuilder is targeting 4-7% volume growth on 2021 levels and expects to grow its outlet position, while maintaining its industry-leading margin.
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© 2022 Kalkine Media®
Stock Performance
The York-based UK’s leading housebuilding company, Persimmon Plc (LON: PSN) is publicly traded on the London Stock Exchange and is a constituent of the FTSE 100 Index.
The market cap of the housebuilder stood at £7,565.60 million and the value of its shares has depreciated by -16.86% over the last one year, while its year-to-date returns stood at -15.72% as of 3 March 2022. Persimmon Plc’s shares were trading at GBX 2,377, up by 0.30%, at 8:10 AM (BST), on 3 March 2022.
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
