Persimmon Plc

Persimmon reported housing revenue of nearly GBP 1.5 billion, gross profit of GBP 267 million, underlying operating profit of GBP 189 million (+10%), underlying PBT of GBP 170 million (+3%), and underlying EPS of 38p (+3%). Gross margin was 18%, down from 13.1% operating margin was 12.8%, and completions were 5,189 (+13%). Net private weekly sales were 205 (+7%), the private sales rate including bulk improved to 0.75, and the total forward order book was GBP 1.9 billion, with private forward orders up 5% to GBP 1.3 billion. For the full year, management expects around 12,500 homes, underlying PBT in line with current expectations, and year-end net cash in line with prior guidance, implying adjusted gearing could still be around 20%.

Dean Finch framed the quarter as proof that Persimmon is growing today while building a larger, stronger business for the future. He emphasized the company’s strategy: higher-quality land, more outlets, three brands, better planning conversion, stronger quality/service, and vertical integration, all aimed at a medium-term 20% operating margin and ROCE. His tone was confident but clear-eyed, repeatedly noting that the market remains challenging and that the company is responding through self-help rather than relying on demand-side policy support.

Andrew Duxbury focused on volume-led profit growth, saying higher completions, overhead discipline, and operating leverage offset mix and cost pressure. He pointed to housing revenue of nearly GBP 1.5 billion, gross profit of GBP 267 million, gross margin of 18%, operating margin of 12.8%, PBT of GBP 170 million, EPS of 38p, and ROCE of 11.3%; he also noted net debt of GBP 165 million and adjusted gearing of 18% including land creditors. On capital allocation, he reiterated the interim dividend of 20p, the minimum annual capital return of 60p, GBP 24 million spent on remediation in H1, expected remediation spend of close to GBP 100 million this year, and year-end net cash expected to be in line with prior guidance. He said cost inflation remains embedded in older sites, including an estimated GBP 40 million to GBP 50 million wind over the next 18 months, and that some restructuring cost could arise from the ongoing cost program.

Analysts pressed on the softer July sales rate, and management said the slowdown was modest and driven by a mix of seasonality, macro factors, outlet transitions, and some timing issues, while noting the forward book still increased. Questions also focused on build-cost inflation, where management said some pressure is already embedded in costs and that mitigation work is underway; they did not quantify the AI benefit yet. On land and planning, management said national policy has improved, but the system on the ground is still clogged, while on capital returns they reiterated flexibility, including potential buybacks if market conditions and the share price justify it. They also said 2027 volume guidance is too early to give and that the 20% margin target depends on volume growth, better land buying, mix, and operating leverage.