Persimmon reports strong performance
Persimmon Homes, the UK's largest house builder by market capitalisation, has reported strong performance and is optimistic about future growth.The company stated that it is now fully sold up for 2014, with customer interest picking up at the start of autumn following a slowdown during the summer weeks.Levels of forward reservation interest are high and the company has £696 million of forward sales reserved beyond 2014 - a 12 per cent rise on the previous year's figure.Selling prices remain robust and there has been modest growth in areas of higher demand, particularly when new sites were successfully launched.This is despite the fact that private sale reservation rates were two per cent lower than last year, when Help to Buy was at its peak and significantly improved market conditions.The strong performance suggests the firm is not feeling the effects of a cooling housing market, after recent data showed a slowdown in the rate of price increases. However, Persimmon did express concerns about the planning system."Despite the ongoing improvements to the planning system, opening new development sites without undue delay continues to be one of the industry's main constraints," the company stated."Whilst we have successfully opened 80 of the 100 new sites planned for the second half of the year, our desire to modestly increase our overall outlet numbers remains a challenge."The firm added that the UK mortgage market is maturing and this could lead to a more stable and sustainable future for the sector.Since July 1st, Persimmon has secured 7,500 plots of land, with over 4,000 plots being converted from the group's strategic land portfolio.Further growth in the group's operating profits is expected in the second half of the year, as a result of both improved gross margins and tightly controlled overheads.Persimmon has increased its production volumes and supply has been boosted by the firm's new home timber frame factory, which has enabled a swifter response to market demand.
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