Persimmon's profits halved in 2023 due to challenging housing market, but remains optimistic

From Morningstar:

UK housebuilder Persimmon warned shareholders of another subdued year after pretax profit in 2023 halved due to challenging markets. Share price fell 3.6% to £13.24, with Morningstar’s fair value estimate at £23. New home completions dropped to 9,922, earnings per share plunged, and total revenue decreased by 27%.

Despite facing challenges, Persimmon remains optimistic about the pent-up demand for homes. The company aims for sustainable shareholder returns by managing uncertainty effectively. The new financial year is in line with expectations, with improvements in mortgage market competition and wage growth impacting affordability. Regional differences in performance were noted, with a subdued housing market expected throughout 2024.

In 2024, Persimmon anticipates delivering between 10,000 and 10,500 completions, with a housing operating margin on par with 2023. Build cost inflation is estimated at 3-5%, with plans to utilize a credit facility for investment. The company predicts a shift from net cash to net debt position, with net finance charges expected between £15-20 million.



Read more at Morningstar: Persimmon Profits Slide Amid Housing Market Woes