Persimmon announces record profits but cautious about prospects

Housebuilder, Persimmon posted record profits for last year. It reported pre-tax profits of £585.1 million, a slight increase from the £582.1 million in 2006.

The country’s biggest housebuilder by market value and No.3 by homes built, said visitor numbers to its sites were down 13%, compared with a 20% fall prior to the Christmas period, and its cancellation rate was 19%, down from 30%.

The company added it is seeing hope for the housing market but it is cautious about prospects for the housing market this year.

The number of new homes reserved had fallen in the early part of this year, according to the house builder. Buyers are taking time to commit to a purchase, with mortgage lending criteria becoming tighter and many experts predicting falls in property prices.

The numbers of visitors to its show homes this year is improving but converting those to sales ‘remained challenging’, the group added.

Jim White, the group’s chairman, said last year was ’challenging’. The credit squeeze has had an impact on the company resulting in customers cancelling house purchases.

However, the group said the number of cancellations had declined and customer confidence had returned slightly since the recent interest rate cuts.

Last year, Persimmon completed 15,905 homes, down 4.8%, while average selling prices increased 1% £189,558.

In January 2006, Persimmon acquired UK housebuilder Westbury plc for a consideration of £643 million.

Story link: Persimmon announces record profits but cautious about prospects