Persimmon sees tough markets as profits slump

(Sharecast News) - UK housebuilder Persimmon warned of continuing tough markets as it reported a worse-than-expected 52% slump in full year profits. The company said pre-tax profit for the year to December plunged to £351.8m, missing estimates of £359.5m.

"Enhanced competition in the mortgage market and wage growth have contributed to improved affordability albeit it continues to be constrained, particularly for first time buyers, and demand for homes remains varied across the country," the company said on Tuesday.

Weekly net private sales rate per outlet stood at 0.59 units in the first 10 weeks of 2024, compared with 0.54 homes a year ago. It expected to build 10,000 - 10,500 units this year, up from 9,922 a year ago.

"Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged. Customers want quality homes in the places where they want to live and work, and affordability is crucial," Persimmon chief executive Dean Finch said.

"Trading in the southern and eastern counties remains more challenging with weaker pricing, offset by a more robust trading performance in the northern regions."

Reporting by Frank Prenesti for Sharecast.com