REG - Persimmon Plc - Q3 Trading Statement

PersimmonAnnouncement

06/11/2024 07:00

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RNS Number : 0639L  Persimmon PLC  06 November 2024

 

6 November 2024

 Trading Statement

 

Trading in-line with expectations, on track to grow completions to c.10,500

 

Persimmon Plc is today providing an update on trading for the period since 1
July 2024.

 

Dean Finch, Group Chief Executive, commented:

 

"Positive momentum in the business continued over the summer months and we
remain on track to deliver growth in completions to c.10,500 for the full
year. Visitor numbers and enquiries remain strong and sales rates continue to
be well ahead of the prior year. Our forward order book is up 17% on the prior
year with the private average selling price robust. We continue to position
the business for success, maintaining our focus on quality and customer
service, and converting our land holdings into active developments."

 

Highlights

                                        2024      2023

 Net private sales rate per outlet(1)  0.70      0.51
 Current forward sales position(2)     £2.02bn   £1.73bn
 Of which private forward sales(2)     £1.45bn   £1.04bn

 

(1) Net private sales rate per outlet per week for the period since 1 July to
3 November 2024 (5 November 2023). Excluding bulk sales 0.61 (2023: 0.47).

(2)As at 3 November 2024 (5 November 2023). Excludes completions in Q3.

 

Trading

The Group traded in-line with expectations during the period and we remain on
track to deliver completions of c.10,500 for the full year. During the third
quarter we delivered 1,416 homes (2023: 1,439) including a 3% increase in
private homes to 1,267 (2023: 1,234) and 149 Partnership homes (2023: 205).

 

The net private sales rate per outlet was up 37% in the period since 1 July at
0.70, or 0.61 excluding bulk sales, with net year to date private reservations
since 1 January up 24% on last year. Customer interest remains good across all
regions, and our marketing campaigns continue to generate healthy online
traffic and visitors to our sites. Affordability and value remain important to
our customers. Affordability constraints, particularly for first-time buyers,
have been helped by the initial reductions in interest rates and a greater
availability of over 90% loan-to-value mortgage products on the market than a
year ago.

 

Overall pricing held firm in the period, with incentives continuing to run
around 4-5% on average. Our private forward sales position has increased 40%
to £1.45bn, reflecting more stable market conditions in 2024 and supported by
our strategy of reserving multi-year sales to our relationship investors at an
early stage. The private average selling price in the forward order book has
remained robust at c.£291,400 (30 June 2024: c.£290,660), and is 10%
higher than in the forward order book at 31 December 2023 (c.£266,100) and 5%
higher than this time last year (2023: c.£278,500).

 

Land spend in the third quarter was £123m (2023: £78m) of which £47m
related to the settlement of land creditors. Our owned and under control land
holdings stood at c.81,500 plots at 30 September 2024 (31 December
2023: 82,235 plots). We are currently seeing a good number of opportunities
in the land market and the embedded margin of the land portfolio remains
excellent. We continue to anticipate a cash balance of £100m-£200m at the
end of the current financial year.

 

We are progressing with our fire safety remediation commitment, with works
underway or complete on 72% of known developments. We continue to expect that
the bulk of works will be completed over the course of the next two years.

 

Outlook

Demand for our homes has continued into the autumn selling season, helped by
improvements in customer sentiment as interest rates begin to reduce and
affordability improves. We are on track to grow to c.10,500 homes this year,
compared to 9,922 in 2023, of which 85% are already exchanged or completed
(2023: 84%), with further growth in outlets and volume expected in 2025.

 

As we move into 2025, we remain optimistic about our growth prospects although
the quantum and timing of future interest rate changes is uncertain and we
continue to assess the implications of the recent Budget. We are seeing some
signs of build cost inflation beginning to emerge in price negotiations for
2025 and are working closely with our supply chain to manage our costs, which
will also be impacted by new building regulations and the employer national
insurance increases announced in the recent Budget. We are seeking to mitigate
the impact of these cost increases through robust commercial controls and
other management actions.

 

Early announcements from the government around planning reforms have been
encouraging. We look forward to the outcome from the consultation on the
National Planning Policy Framework later this year.

 

We are well positioned for continuing market improvement with an excellent
pipeline of new sites aligned to our three strong brands, and with the core
Persimmon product offering quality at an affordable price point for our
customers.

 

Our next scheduled update will be our 2024 Trading Update on 14 January 2025.

 

Persimmon will host a conference call with analysts at 09.00am today.

 

All participants must pre-register to join this conference using the
Participant Registration link. Once registered, an email will be sent with
important details for this conference, as well as a unique Registrant ID.

 

Participant registration page:
https://register.vevent.com/register/BIc07454d397c64088b1317705b433e073
(https://register.vevent.com/register/BIc07454d397c64088b1317705b433e073) .
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBIc07454d397c64088b1317705b433e073&data=05%7C02%7Cvictoria.prior%40persimmonhomes.com%7C953b8ede7902491b60dc08dce84e82ae%7Ca7e38ec197c44170b474f371e5db4101%7C0%7C0%7C638640671174000020%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=QM1YrKIW8ANgoCfqjrKm6DDtxGskaHczVUca6Eby7Do%3D&reserved=0)

 

For further information please contact:

 Victoria Prior, Group IR Director                                              Olivia Peters

 Anthony Vigor, Group Director of Strategic Partnerships and External Affairs   Teneo
 Persimmon Plc                                                                  persimmon@teneo.com
 Tel: +44 (0) 1904 642199                                                       Tel: +44 (0) 7902 771 008

 

 

Appendices:

 1.  Quarterly performance    Q3 2024  Q3 2023  Variance

 Completions (homes)          1,416    1,439    -23
 Private (homes)              1,267    1,234    +33
 Partnership (homes)          149      205      -56
 FTB % (private completions)  32%      32%      -

 

 

 

 2.  Forward sales(1)
                        3 November 2024     5 November 2023     Variance
                        Value     Homes     Value     Homes     Value   Homes
 Private                £1.45bn   4,988     £1.04bn   3,733     +40%    +34%
 Partnership            £0.57bn   3,587     £0.69bn   4,449     -17%    -19%
 Total                  £2.02bn   8,575     £1.73bn   8,182     +17%    +5%

( )

(1) As at 3 November 2024 (5 November 2023). Excludes completions in Q3.

 

Cautionary statements

Some of the information in this document may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Persimmon Plc and its subsidiaries (the Group). You can
identify forward-looking statements by the terms such as "expect", "believe",
"anticipate", "estimate", "intend", "will", "could", "may" or "might", the
negative of such terms or similar expressions. Persimmon Plc (the Company)
wishes to caution you that these statements are only predictions and that
actual events or results may differ materially and as such undue reliance
should not be placed on these statements. The Company does not intend to
update these statements to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. Many
factors could cause the actual results to differ materially from those
contained in projections or forward-looking statements of the Group, including
among others, general economic conditions, the competitive environment as well
as many other risks specifically related to the Group and its operations. Past
performance of the Group cannot be relied on as a guide to future performance.

 

Please see the most recent Annual Report and Accounts of Persimmon plc and
other disclosures through the Regulatory News Service ("RNS") for further
details of risks, uncertainties and other factors relevant to the business and
its securities.

 

The information in this trading statement is unaudited.

 

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