Shares in Persimmon rose 40.5p, or 5%, to 840p on Monday as the UK’s biggest housebuilder defied the housing downturn and reported a strong set of half-year results.
Pre-tax profit in the six months to 30 June increased 7% to £235m, a company record for the first six-month period of a financial year. Turnover rose 10% from £1bn to £1.1bn.
The company said it had been able to offset the effect of introducing incentives for customers and other costs caused by the slowdown in the market by reducing expenses elsewhere.
It said it did not expect any “significant reduction” in margins in the second half of the year.
Persimmon chairman Duncan Davidson was upbeat about prospects. He said: “Although the current market requires us to be flexible in our approach to both sales and marketing, it is nevertheless one in which we can continue to operate successfully. We remain optimistic for the business in 2005 and are well placed for 2006 and beyond.”
Analysts at Dresdner Kleinwort Wasserstein said: “We reiterate our view that Persimmon’s performance would beat most peers and that the sector may gain some strength in the short term, until rivals start reporting early next month.”
Persimmon said it was confident it would meet expectations for the full year, with £980m of sales already booked in the second half.
The company’s northern division was the worst performer in the first half, with a 12% reduction in legal completions to 2259.
Analysts at Teather & Greenwood said Persimmon had the financial firepower to make a major acquisition should the right opportunity arise, which would push it into the FTSE-100.