Persimmon Shares Rise: Exceeds Expectations with 12% Completion Growth Amid Market Challenges

Persimmon (LON: PSN) shares gained around 2.4% in early Tuesday trading after the company announced a robust trading statement for the year ended December 31, 2025, showcasing a 12% increase in new home completions despite a challenging market environment.

The company anticipates reporting underlying profit before tax at the upper end of market expectations. This performance underscores the effectiveness of Persimmon's strategic investments and self-help initiatives.

New home completions reached 11,905, up from 10,664 in 2024. The average selling price increased by 4% to approximately £278,000, compared to £268,499 in the previous year. Net private sales per outlet per week remained consistent at 0.70. Forward sales saw a modest rise of 2%, reaching £1.172 billion.

The company's focus on quality standards is reflected in retaining its HBF five-star rating for the fourth consecutive year. Private home completions rose by 8% to 9,830, with partnership homes contributing 2,075 completions. The private average selling price increased by 5% to approximately £301,000.

Net sales rate per outlet per week, excluding bulk sales, increased by 4% to 0.59. Strategic investments in land and planning enabled the opening of approximately 100 new outlets, bringing the total to 277. The underlying housing operating margin is expected to be towards the lower end of the guided range of 14.2% to 14.5%.

The value of forward sales increased to £1.17 billion, with private forward sales up 4% to £680 million. This growth in private sales to owner-occupiers was partially offset by a reduction in bulk sales due to softened demand in the Build to Rent market during Q4. The private average selling price in the order book stood at approximately £293,400, a 6% increase year-over-year.

Gross land spend amounted to approximately £560 million, with owned and under-control land holdings at approximately 84,750 plots. Planning approvals were secured for approximately 12,800 plots, equivalent to 108% of 2025 completions. The company ended the year with net cash of approximately £116 million, after returning £192 million to shareholders.

Persimmon spent approximately £60 million on building safety remediation and anticipates recognizing additional costs, net of recoveries, which are expected to be lower than the 2025 expenditure. Consequently, the net balance sheet provision at December 31, 2025, is expected to decrease compared to the previous year's £235 million.

Looking ahead to 2026, Persimmon anticipates stable trading conditions and is on track to meet current market expectations. While not expecting significant market improvements, early indications from the Boxing Day marketing campaign are encouraging. Recent mortgage rate reductions are seen as beneficial for private customers, although affordability constraints remain a consideration.

Dean Finch, Group Chief Executive, commented: “Persimmon performed well during 2025, in a challenging market. We have delivered a 12% growth in completions, ahead of market expectations, and we expect to report underlying profit before tax at the upper end of market expectations.

“This performance demonstrates the benefit of our sustained investment in recent years, alongside our self-help strategy, broad geographic coverage and increased outlets, to create a differentiated growth platform.”