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Wednesday 08th of October 2008
February 26, 2007

Persimmon reports record profits


by Elaine Frei

Persimmon reports record profits

Homebuilder Persimmon (LSE: PSN), the UK’s largest, has said its profits were at a record £582.1 million in 2006, a gain of 17.5 percent. Revenues were 37 percent higher to £3.14 billion. Along with its full-year results, Persimmon said that it believes 2007 will also bring strong results, noting that buyers seem not to have been slowed down by the Bank of England’s surprise interest rate hike in January.

Persimmon’s chairman, John White, announced that the company will raise its full-year dividend by 50 percent. This was made possible by the fact that the number of homes built in 2006 by the company was at 16,701, a gain of 32 percent over the year before, and a selling price that averaged 4 percent higher at £188,129.

While analysts have said that they expect the housing market to slow later in the year due to recent interest rate hikes, but Mr. White cited continuing orders as evidence that those in the market for a new home have not lost confidence due to the increases in the interest rate. The news sent Persimmon shares 3.5 percent higher in morning trade.

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