Persimmon, one of the UK's largest homebuilders, has reported a 57% increase in pre-tax profits to £213 million for the first half of 2014, driven by a recovering housing market and improved economic conditions. The company sold 6,408 completed homes, a 28% rise on the same period last year, with average selling prices up 4.3% to £186,970.
The strong performance comes despite warnings from estate agents that the market may be cooling after Bank of England governor Mark Carney hinted at possible interest rate rises. However, Persimmon, which builds outside London, has not seen demand slacken, with reservations up 9% since July and forward sales 22% higher than last year.
Chief executive Jeff Fairburn said the company was encouraged by private sale reservation rates entering the summer months. Persimmon plans to step up building work and develop 100 new sites in the second half of the year, alongside hiring additional staff.
Shareholders benefited from a 61% increase in earnings per share to 54.8p, while the share price rose 1.1% in early trading. Richard Hunter of Hargreaves Lansdown noted that Persimmon is capitalising on strong demand exceeding supply, though concerns about sustainability of price rises and share valuation remain.
