Persimmon plc (LON:PSN) today released its third quarter Trading Statement which covers the period from 1 July 2018 to 6 November 2018.
With the start of the autumn season customer activity has strengthened in line with the traditional seasonality of the market. Our private sales in the period since we reported our half year results on 21 August 2018 have been 3% ahead of last year’s strong comparatives. The Group’s outlet network has been c. 5% stronger through this period and will continue to support sales through into 2019. Persimmon is currently delivering new homes in c.370 communities nationwide. We are now fully sold up for the current year and have c. £987 million of forward sales reserved beyond 2018, an increase of 9% on the same point last year (2017: £909 million). Sales prices remain firm across our regional markets.
Resilient consumer confidence and continued mortgage lender support have provided positive market conditions, with mortgage approvals for the third quarter ticking up from levels seen in the first two quarters of the year. Mortgage interest rates remain attractive and Persimmon continues to focus on providing new homes at affordable price points across the UK. Indeed, provision of housing to lower income families remains an important component of the Group’s sales mix, with over 2,000 new homes being delivered to our housing association partners in the financial year to date.
The Group is committed to growing output where markets allow, building new houses on all sites which have an implementable planning consent. Having opened six new house building businesses over the last three-and-a-half years we continue to invest in both our infrastructure and people to support the further sustainable growth of the Group. To continue this disciplined growth we plan to open a new regional operating business in South Yorkshire in January 2019, located at our off-site manufacturing hub at Harworth, bringing the number of house building businesses in the Group to 31. Persimmon’s home building activities support over 20,000 construction jobs on the Group’s sites* and over a further 29,000 jobs in its supply chain*.
Persimmon’s successful track record in significantly growing output over recent years is in part due to the adoption of our Group house types across the UK together with the drive and enthusiasm of our motivated management teams across the business. In addition, to further support the Group’s ability to sustain and increase output, Persimmon has made significant investments in our new brick manufacturing plant which is now operating successfully at capacity and in our new roof tile manufacturing facility which is now under construction. We continue to attract and invest in large numbers of trainees across the business to build the required platform of skills and expertise to support the further growth in the number of new homes built.
In a further new initiative, in response to customer feedback, Persimmon is investing in the development of its own ultrafast, full fibre to the home, broadband service for our new home customers which aims to be available on moving day. The new business, called Fibrenest, is already providing fast and reliable broadband service to new customers on 15 sites with plans in place for further rollout.
Persimmon is in a very strong position for the future and whilst we are mindful that there is uncertainty associated with the UK’s withdrawal from the EU, the Company’s investment over recent years in a high quality landbank provides a sustainable long-term platform for each of our 31 regional businesses and enables the Group to be very selective with future investments. By adopting this position the Group has acquired over 4,750 new plots of land, and spent over £180 million, including payment of deferred land creditors, during the period. Of the replacement land acquired so far this year 23% has been converted from the Group’s strategic land holdings.
We will give a further update on progress and trading, following the year end, on Tuesday 15 January 2019.
Persimmon will host a conference call with analysts at 9.00 a.m. today. To participate please dial +44 (0) 33 3300 0804. The access pin is 70734633# and the password is “Persimmon”.
In addition, senior management are hosting a Capital Markets Day briefing for analysts and portfolio managers on 8 November 2018, based at the Group’s off-site manufacturing hub at Harworth. No material new information will be shared at the briefing and materials will be available on Persimmon’s website following the briefing.