UPDATE 1-Persimmon brings forward shareholder payout as profit jumps

Tue Feb 25, 2014 4:02am EST

Related Topics

LONDON Feb 25 (Reuters) - British housebuilder Persimmon said it would bring forward a 1.9 billion pound ($3.16 billion) planned payout to shareholders after a strong rebound in housing demand helped it achieve a 49 percent jump in full-year pretax profit.

The company, Britain's largest housebuilder by market value, has been one of the biggest beneficiaries of government schemes to free up the mortgage market, which have stoked buyer demand and consequently sales.

"The improvement in performance for 2013 has enabled us to generate more cash and that's led to us having options of buying more land and returning the cash more quickly through the dividend to shareholders," Chief Executive Jeff Fairburn told Reuters on Tuesday.

The initial scheme was for payouts every two years between 2013 and 2020, with a final payment of 115 pence in 2021.

Fairburn said the company would pay out 70 pence per share on July 4, bringing forward part of the 2021 payment to top up a previous planned dividend of 10 pence announced in April last year.

It will also pay 95 pence per share next year as planned and will pay shareholders at least 10 pence per share in 2016 and 2018, with these also coming from the final payment.

Accendo Markets senior trader Marc Kimsey said Persimmon's update was a sign the industry was thriving. "Until purchasing incentives are withdrawn or interest rates increase, there is little reason to avoid the house builder stocks," he said.

Persimmon said underlying profit before tax for the year to the end of December rose to 330 million pounds ($548.81 million) from 222 million pounds a year earlier.

Analysts had forecast pretax profit of 293-334 million pounds, a Thomson Reuters survey of 15 analysts showed. The company posted a 21 percent rise in 2013 revenue in January, at the top end of analyst forecasts.

Persimmon said it had sold - or legally completed on - 11,528 homes over the year, 16 percent more than last year, with its average selling price rising 4 percent to 181,861 pounds. Fairburn said he expected a similar increase in sales volume in 2014 and that, overall, the company had capacity to reach 14,000-15,000 new homes a year.

The company said the first eight weeks of the spring selling season was encouraging, with its weekly private sales rate per site 22 percent ahead of last year. Total forward sales are currently 1.42 billion pounds for 2014, up 41 percent on the previous year.

Shares in Persimmon were trading up 1.1 percent at 1487 pence at 0837 GMT, while the Thomson Reuters UK Homebuilding index was 0.3 percent stronger.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.