Persimmon reaffirms outlook after strong start to the year

(Sharecast News) - Shares in Persimmon sparked on Thursday, after the housebuilder reaffirmed its full-year outlook despite early signs of inflation in its supply chain. Updating on trading at its annual general meeting, the blue chip said it had started the year on the front foot. Private forward sales were up 7% year-on-year in the four months to 26 April, while net private sales per outlet per week (excluding bulk sales) were 3% stronger at 0.67.

The order book now stands at £2.46bn, up 5% year-on-year.

Persimmon also reaffirmed guidance for annual pre-tax profits in line with consensus of around £462m, and home completions of between 12,000 and 12,500.

The outbreak of war in the Middle East at the end of February has sent global energy prices soaring, reigniting inflation fears and weighing on consumer confidence. Persimmon said that the conflict had not had any material impact on trading to date.

However, it acknowledged that mortgage rates had now started to rise, with enquiries softening slightly in recent weeks as a result. It also acknowledged early signs of inflation in its supply chain, driven by higher energy costs, which were likely to impact the second half and into 2027.

Persimmon said it would review costs in response, although noted that it continued to benefit from its low-cost vertically integrated model.

Dean Finch, chief executive, said: "We are mindful of [the war's] potential impact, including on consumer confidence, and there are early signs of increased inflationary pressure. We are carefully monitoring the situation, driving sales across all brands and tenures, maintaining flexibility and a rigorous focus on cost control and cash generation, while being supported by a robust balance sheet."

As at 0845 BST, the stock was up 3% at 1,053.51p.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "Persimmon's momentum continues to build, with a strong, all-round sales performance despite current market challenges.

"While the conflict in the Middle East hasn't had a material impact on Persimmon so far, there's the potential for that to change in the future."

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