Persimmon build rates fall amid material and labour shortages

A trading update today showed Persimmon delivered 6,652 new homes in the first half of this year compared to 7,406 last time.

The firm said build rates were lower than expected “due to further delays in the planning system and material and labour shortages.”

Persimmon said it held currently held around 89,000 plots in its owned and under control land holdings and around 100,000 plots in its strategic land portfolio.

It also has £780m of cash in the bank and returned £399m to shareholders in April with another payout due this month.

Persimmon added: “Rising energy prices, supply constraints on certain materials and increased labour costs are driving upward pressure on total build costs.

“Currently, house price inflation is continuing to offset these increases. As a result, we expect  to deliver a housing gross margin that is slightly ahead year on year, although, the lower number of completions will result in a slight fall in operating margin reflecting the reduced efficiency of the Group’s overhead recovery rates.

“Despite this, we anticipate the Group’s profit at the half year to be modestly above our expectations.”

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