PART OF THE WEEK: The housing market has a lot on its plate, so Persimmon hopes it can find some optimism in the latest City update
From rectifying the unjust cladding costs to rising interest rates and helping new home buyers get up the real estate ladder, the housing market has a lot on its plate.
But Persimmon hopes it can find solutions — and optimism — when it updates the city on its half-year results on Wednesday.
The blue-chip homebuilder reported a decline in completions and revenues in the first half of the year. Last month, it said the construction delay was due to schedule delays and shortages of personnel and materials.
Deliveries fell 10 percent year-on-year to 6,652 while revenues fell 8 percent to £1.7 billion, offset by average selling prices rising 4 percent to £245,600.
But shares have fallen more than 40 percent since early 2020.
Questions remain about how Persimmon has coped with rising construction costs, exacerbated by geopolitical and economic problems, in addition to declining consumer confidence, the end of the stamp duty tax and the phasing out of Help to Buy.
But analysts are forecasting a revenue increase of 11 percent to £3.8 billion for the year to the end of December. And profits are expected to rise 6 percent to above £1 billion.
Whether it will involve further cladding obligations remains to be seen.
In April, Persimmon signed the government developer’s commitment to pay for the remediation of cladding on buildings over 11 meters high.
It has set aside £75 million, but this was one of its lowest numbers, according to AJ Bell analyst Danni Hewson.