UK's Persimmon advances dividend payout on robust market outlook

3 minute read

Persimmon signage is seen at a building site in Durham, as the spread of coronavirus disease (COVID-19) continues. Durham, Britain, March 25, 2020. REUTERS/Lee Smith/File Photo

Register now for FREE unlimited access to
  • HY revenue jumps 53% to 1.84 bln pounds
  • Forward order book at 1.82 bln stg at June-end
  • 'Persimmon fully back on track' - analyst

July 8 (Reuters) - British homebuilder Persimmon (PSN.L) on Thursday brought forward its dividend payment to next month, joining smaller rivals in forecasting strong demand even after a tax holiday on property purchases ends in September.

An extended stamp duty break, cheap loans and increased preference for larger homes from buyers who saved up during lockdowns have helped homebuilders forecast higher returns for the medium term.

Persimmon, the country's second-largest homebuilder that offers a range of homes from studio apartments to five-bedroom houses, said revenue for the six months to June 30 surged 53% to 1.84 billion pounds.

Register now for FREE unlimited access to

"Customer demand for our new homes has been strong right across the UK with healthy sales reservation rates through the period," Chief Executive Officer Dean Finch said.

In recent weeks, mid-sized players Redrow (RDW.L), Vistry (VTYV.L) and Crest Nicholson have also expressed confidence about robust demand going forward.

House prices have risen in recent months as buyers rushed to get deals done by the end of June when the tax break began to taper off. But data from RICS published on Thursday showed fewer homes were put up for sale and buyer demand grew less fast ahead of the end of a tax break in September. read more

Persimmon's forward sales stood at 1.82 billion pounds ($2.5 billion), slightly lower than 1.86 billion pounds a year earlier.

With 1.32 billion pounds in net cash, Persimmon expects to return 110 pence per share of surplus capital to shareholders as an additional interim dividend next month, as opposed to two payments in August and December.

"Persimmon is fully back on track, with most metrics improving to above pre-pandemic levels," said Richard Hunter, head of markets at interactive investor.

Shares of the FTSE-100 company were 1.7% lower at 0722 GMT, in line with broader weakness on the London stock market (.FTSE).

($1 = 0.7264 pounds)

Register now for FREE unlimited access to
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu

Our Standards: The Thomson Reuters Trust Principles.

More from Reuters