10 January 2024
If you are covering Persimmon’s latest results, please see the following comment from Oli Creasey, property research analyst at Quilter Cheviot:
"Persimmon saw strong recovery in its sales rate in the final quarter of 2023, traditionally a slower period. A sales rate of 0.69x (compared to 0.59x in H1 and 0.48x in Q3) helped the company beat consensus on the number of homes sold, completing just under 10,000 homes in the year. Along with an average sale price that was up +3% year-on-year, revenue figures are likely to be incrementally better (although still below the pre-rate rise period).
"Slightly frustrating then to see management guide to a full year operating margin the same as in H1 (14%), with a number of one off charges and cost inflation depressing the recovery in revenues.
"The outlook for 2024 is similarly mixed. While a pickup in interest from buyers late in 2023 is likely to continue, Persimmon's forward order book is largely unchanged vs 2022. Market conditions are expected to remain "highly uncertain" with an election looming, although easing mortgage rates and moderating build costs should prove beneficial.
"Persimmon has maintained its 5* builder rating from the HBF, an important indicator of build quality."
