14 January 2025
If you are covering Persimmon's latest trading update, please see the following comment from Oli Creasey, property analyst at Quilter Cheviot:
"Persimmon’s trading update this morning was largely positive, and notable for recovery in sales volume and profit before tax in 2024, both of which are likely to be ahead of market expectations. Volumes grew 7% year-on-year, while the average sales price also improved 5%, although this was largely down to a change in the types of houses being sold rather than a market revival. The company has guided towards the top end of its profit expectations and has also beaten expectations in terms of net cash on balance sheet.
"Persimmon noted that there are already strong levels of enquiries in 2025, and the forward order book is larger than this time last year. However, management has acknowledged the uncertainty caused by geopolitical and macroeconomic factors, which may dampen customers’ interest in the short-term.
"The update is a reassuring one for investors, who will be pleased to see that the recovery is well underway. However, it ought to be seen in the wider context; while volumes are improving, the 2024 figure is still approximately 25% below the typical volumes achieved in the years prior to 2023. Likewise, while profit has increased, Persimmon’s management has guided to an unchanged profit margin. Margins in the mid-teens are expected, which are approximately half of what they were just a few short years ago. The recovery continues, but still has a long way to go."
