Profits soar at Persimmon as Brexit fears brushed off

Persimmon saw its profits jump 23% last year. Picture: Kimberley Powell
Persimmon saw its profits jump 23% last year. Picture: Kimberley Powell
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Housebuilder Persimmon said customer confidence in the first weeks of 2017 had been “encouraging” as it reported a robust performance last year.

The company, which has more than 40 developments in Scotland, pointed to a “confident” housing market despite concerns over Brexit.

The owner of brands including Charles Church saw pre-tax profits rise 23 per cent to £774.8 million in the year to 31 December, while revenue rose 8 per cent to £3.1 billion.

READ MORE: Persimmon buoyed by ‘very healthy demand’ for new homes

Commenting on the immediate impact of the Brexit referendum outcome, the firm said: “Despite some understandable caution being exercised by consumers and corporates alike during the period ahead of the EU referendum, the result created an immediate and significant uncertainty in the markets.

“However, the vast majority of the group’s customers remained focused on exchanging contracts and completing their new home purchases.”

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Chairman Nicholas Wrigley added that customer activity in the early weeks of the 2017 spring season has been “encouraging”.

The company said of current trading: “The UK new build housing market remains confident with customer demand for new homes supported by compelling mortgage products. We are pleased with customer activity in the first eight weeks of the 2017 spring season. Visitors to our sites are circa 7 per cent ahead year on year.

“We have experienced a normal week-on-week strengthening of the market on entering the 2017 spring selling season.”

Buyer demand and house prices have been surprisingly resilient since the referendum, thanks largely to rock-bottom borrowing costs after interest rates were cut to 0.25 per cent in August.

Persimmon also flagged the “overall shortage of supply of housing in the UK” as a factor providing support to the market.

However, the builder added: “We remain wary of the risks and increased uncertainties associated with the EU referendum result.

“The group is in a strong position to remain selective in its land replacement activities given the strength of its existing asset platform.” New home completions increased by 599 to 15,171 in 2016 with average selling prices up 3.8 per cent to £206,765.

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