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Persimmon shares are dragging their housebuilding brethren higher this morning (up 2-3%) after reporting a strong set of H1 results; revenues up 12% year-on-year, but pre-tax profits up more than twice as fast (+29%). Whilst in the fortuitous position of being able to announce healthy margin expansion management is making sure the Brexit doom-mongers are well aware of visitor numbers since the start of July being +20%, helping reservation rates climb an equally impressive 17%.
Less London exposure than peers looks to be paying off while current trends and outlook appear in-line with recent property data. Like the rest of the UK Index , the company acknowledges “increased economic uncertainty” in light of the referendum but investors appear more focused on increased customer interest in PSN properties amid the traditionally slower summer months and management’s confidence in a solid autumn season.
The future for the UK’s beloved housing market thus still appears bright. Phew! Today’s results accelerate an already solid recovery from depressed Brexit lows, pretty much closing the gap-down registered on Jun 24. The next hurdle is likely to be the 200-day moving average at 1900p.
Mike van Dulken, Head of Research, 23 Aug
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