Persimmon reflects on 'strong performance' but warns of tougher outlook in 2023
Housebuilding giant Persimmon reported a strong full-year performance despite the 'headwinds' of the past year.
But Persimmon, whose West Midlands base is in Telford, warned in a trading update for the year ending December 31, of a challenging outlook for 2023.
The company completed the sale of 14,868 new homes, with the average selling price increasing by five per cent to around £248,600 from £237,078.
The company ended the year with a balance sheet of £860m cash and £475m of land creditors
But as a result of the lower sales rates and elevated cancellations in the second half, and against a strong comparative at the start of 2022, the company's forward sales position reduced year on year to £1.0bn from £1.6bn in 2021.
The company said 'higher mortgage rates, inflation, heightened market uncertainty and the end of reservations under Help to Buy in England, had a sharp impact on the Group's private sales rates in the fourth quarter and will have an adverse impact on the outlook for 2023'.
Dean Finch, Group Chief Executive, said: "Persimmon has delivered a strong performance for 2022 which has been achieved despite headwinds from supply constraints in the early part of the year and a more challenging sales environment in the second half.
"We delivered 14,868 new homes to customers in the year, towards the top end of our guidance, whilst maintaining five-star quality. Customers remain at the heart of our business with our continued focus on quality and affordability.
"In the second half of the year, rising interest and mortgage rates, inflation and weaker consumer confidence began to impact customer behaviour across the housing market.
"This change in market conditions gathered pace in the fourth quarter and is reflected in the reduction in our recent weekly sales rates and a lower forward sales position as we enter the new financial year.
"However, with high quality land holdings, a strong balance sheet and an experienced management team, Persimmon is well placed to navigate this challenging short-term backdrop, whilst continuing to take advantage of any opportunities that may arise."
