Persimmon building a brighter future despite sector woes

BRITAIN'S ailing housebuilding sector received a surprise boost yesterday when Persimmon revealed 2010 profits would be at the top end of City forecasts after a 10 per cent jump in turnover last year.

The UK's second-biggest housebuilder said turnover reached 1.57 billion despite the sluggish conditions in the home-buying market.

The firm, which has a raft of developments across the Central Belt and in the Scottish Borders, said it completed 9,384 sales in 2010 - a 4.5 per cent improvement on 2009's performance. The average selling price reached 167,000, up 6 per cent on the previous year.

Although most housebuilders suffered poor trading conditions in December, when the snow put a stop to many home viewings, Persimmon said annual profits were likely to be towards the upper limit of analysts' forecasts, which currently range from 75 million to 96m. It expects potential buyers who were put off by the adverse weather before Christmas to return to the market in coming weeks. The group also slashed borrowings by four-fifth over the past 12 months, from 267.5m to 51m.

Panmure Gordon analyst Rachael Waring increased her forecast for 2010 profits from 80.3m to 95m off the back of the update. "We believe Persimmon is a good quality company, well placed to cope in a housing market in which we do not forecast any improvement over the next 12 months," she said.

Persimmon also announced that its chairman John White would step down in April after 32 years with the company. White joined in 1979 when it was a privately-owned firm, rising to chief executive in 1993 before becoming chairman in 2006.