Persimmon targets near-18,000 home sales

Persimmon targets near-18,000 home sales
Britain's largest housebuilder is planning to increase the number of homes sold this year to more than 17,500James Rossiter
Persimmon, Britain's largest housebuilder, is expanding its sales outlets to take the number of homes sold this year past the 17,500 mark.

John White, Persimmon chairman, told investors at today's annual general meeting that sales revenue during the first quarter of this year had reached about £1.8 billion, "which is at a similar level to the record sales we had achieved at the same date in 2006".

Focus will now be on opening new developments "to ensure that sales volumes are maintained at suitable levels throughout the summer months".

Persimmon was operating from 465 sales outlets at the start of January and had aspirations, subject to planning, to be selling off 500 sites by June.

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Kate Moy, building analyst at Teather & Greenwood, is forecasting an 6 per cent rise in completions this year to 17,700 homes.

Mr White said average selling prices had only moved ahead "moderately" however, likely to be a result of more sales of the group's upmarket Charles Church homes.

Analysts at both Teather & Greenwood and Shore Capital maintain their buy rating on Persimmon stock, which fell 28p in early morning trading to 1402p.

Shares in housebuilders have come off sharply this week over fears that a half percentage rise in interest rates is on the cards, which could dampen demand for new homes.

Earlier this week Howard Dawe, chairman of Bellway, the housbuilder on course to build about 6,500 homes this year, told investors that "the market remains competitive and incentives are required to conclude most transactions”, outside booming Thames Gateway, North London, North East England and Scotland.

Alistair Leitch, finance director of Bellway, said that incentives had “risen last year from an average of £3,000 per completion to about £4,000 spent on carpets, stamp duty or legal fees."

But Mr Leitch played down fears about rising interest rates affecting the new homes market. “Not enough credit is given to how astute the British public is. If they are going to buy they will buy. The situation is people at the moment are buying out of need and necessity and that will continue.”