Persimmon Shares Edged Up 5% Despite Weak Q3 Completions Data

The Persimmon plc (LON: PSN) share price edged 5.01% higher after releasing its Q3 trading update, where its performance was aligned with its expectations of delivering 9,500 homes this year. During the third quarter, the Group delivered 1,439 homes, aligning with its expectations, but was 37% lower than the 2,270 homes delivered in the same period in 2022. 

The homes delivered included 1,234 private homes and 205 partnership homes for housing association partners, indicating the firm’s continued commitment to addressing various housing needs.

The company’s private selling prices on completions experienced a 2% increase in the quarter compared to the previous year, reaching an average of £296,822. In parallel, our partnership's average selling price saw a substantial 20% increase during the same period.

The average private sales per outlet per week during this period were 0.48, following the typical seasonal decline over the summer months but showing signs of improvement from September, coinciding with the launch of our latest marketing campaign.

Pricing remained relatively stable despite affordability challenges, particularly in the South of England, where we observed an increased use of incentives. During the third quarter, average incentives on private sales rose to approximately 3.6%.

Persimmon’s land spend for the third quarter was £78 million, with £34 million allocated to settling land creditors. The company achieved planning permissions for approximately 3,400 plots across 19 sites during the third quarter, which will support its outlet network.

The firm anticipates maintaining a cash balance ranging from £300 million to £500 million at the end of the current financial year. Looking ahead to 2023, we are on track to achieve approximately 9,500 completions with an operating profit in line with expectations. 

Dean Finch, Persimmon Group Chief Executive, commented: “Trading in the period was in line with expectations, and pricing was broadly stable. We are on track to deliver around 9,500 quality new homes in 2023 with operating profit in line with expectations and at an operating margin similar to the first half. While the near term is likely to remain challenging and we remain disciplined on costs, we continue to position the business for growth when the market recovers, as demonstrated by our further progress on planning in the period. The Group's national network of outlets providing a high-quality product at a range of attractive prices is a crucial strength in this market.”

Persimmon share price. 

The Persimmon share price edged 5.01% higher to trade at 1136.0p from Monday’s closing price of 1081.8p.