Persimmon set to shrug off Brexit blues

Persimmon, one of Britain's biggest housebuilders, will unveil a substantial jump in interim profits this week when it is also expected to play down the potential impact of post-Brexit economic uncertainty on the housing market.

Jeff Fairburn is expected to talk about interest rates. Picture: contributed
Jeff Fairburn is expected to talk about interest rates. Picture: contributed

The Charles Church brand owner revealed robust home sales in a first-half update last month when it said there would still be good opportunities in the property market following the UK’s European Union referendum last June.

Persimmon chief executive Jeff Fairburn is expected to say tomorrow that the housebuilding sector will benefit from “lower for longer” interest rates after the Bank of England’s recent quarter-point reduction to 0.25 per cent.

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Broker Whitman Howard forecasts a near-28 per cent leap in pre-tax profits at the company to £349 million. This comes after Persimmon said it sold 6 per cent more homes in the first six months of 2016, at 7,238, with the average price up 6 per cent at £205,500.

It added it took “good levels of sales” in May and June, with private sales around 1 per cent higher year‑on‑year despite uncertainty ahead of the EU referendum and tough comparatives from a year earlier.

Shares in Persimmon, which has about 40 current developments in Scotland, have rallied by 30 per cent since July, although they are still trading below pre-Brexit levels.

Scott Fulton at Whitman Howard said the bounce-back “reflects a growing awareness that predictions of a 2017 collapse are unfounded”. He expects only a modest drop in sales growth in 2017 as a result of the EU vote.