REFILE-UPDATE 1-UK's Persimmon says 'help to buy' delivers boost
By Paul Sandle
LONDON Aug 20 (Reuters) - British housebuilder Persimmon said government measures to help first-time buyers boosted spring sales countrywide, with reservations since April 1 running 30 percent ahead of last year.
"The government's 'Help to Buy' equity loan offer has seen a strong take up in the market," chief executive Jeff Fairburn said on Tuesday. "We have now achieved over 1,700 reservations on this scheme."
The stronger market helped Persimmon increase underlying pretax profit by 40 percent to 135.3 million pounds ($212 million) in the six months to the end of June, beating market expectations. Revenue rose 12 percent to 899.9 million pounds.
Housebuilders are struggling to meet demand after an upturn in the market, in part driven by the British government offering loans of 20 percent of a property's value.
Fairburn said Persimmon was starting building on new sites as quickly as possible to meet pent-up demand for properties, and it expected to open a further 85 sites in the second half, on top of 90 in the first.
He was also buying up land, spending 236 million pounds in the first half, up from 142 million pounds a year ago, with a similar sum earmarked for the second half.
Fairburn said that as well as improving sentiment across the market, 'Help to Buy' meant Persimmon no longer had to fund equity loans, freeing up more capital to invest in land.
Government measures to ease planning controls had also helped the group develop sites, he said, but the company's construction operations were not yet fully up to speed. "Starting on site is still difficult," he said.
Persimmon added 7,538 new plots in the half to give it a total 70,716 owned and controlled plots.
Shares in the group, which have fallen 7 percent in the last four weeks, were 0.6 percent higher at 1,173 pence at 0807 GMT.
Analyst Anthony Codling at Jefferies said the company had delivered a solid performance. "We view Persimmon as a strong business, but on valuation grounds see better value elsewhere," he said, pointing to Bovis and Barratt.
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